ABSTRACT
This paper presents an analysis of conducting business on the Internet. Global competition and the increasing pace of change are causing substantial pressure on major organisations. If they are to establish long-term competitive advantage they will need critical support in designing and implementing operational strategies that will transform their culture and performance and release the fall potential of the organisation at all level. Changes in technological, environmental and economic forces have revolutionised the way corporations are managed. These forces are continuing to establish a global market, which requires the standardisation of products and services in order to compete in a global economy.
Because the most efficient businesses have an advantage over their competitors, companies have an incentive to embrace technologies that make them more productive. Electronic documents and networks offer businesses opportunities to improve their information management, service, and internal and external collaboration. The personal computer has already had a huge effect on business. But its greatest impact will not be felt until the PCs inside and outside a company are intimately interconnected. This study shows that the Internet offers many opportunities to improve business productivity and perhaps it will be the business tool of the twenty-first century. Companies that do not access this tool very quickly will be out of business of the Information Age.
INTRODUCTION
The Internet will be the most important business tool as well as information of any kind for the 21st century. May be the greatest change on the Internet will be the move from a subsidised academic and government communications systems to a commercial system. So far, no one really knows how this will affect the future of the Internet. Since its raw beginning in 1969, the Net has evolved into a community of virtual community. Many Internet users are afraid that business will sabotage the net community. Tens of thousands of virtual communities populate the Internet-some small, some large-stretching from Australia to Zimbabwe.
The Internet has been growing from the start of its 27-year history, but the last two years have seen an astonishing expansion-with the net more than tripling in size. The Internet is at the forefront of three to five years of tremendous growth and change as a new generation of key enablers unleashes mainstream uptake of the Internet. It is predicted that 97 percent of the future installed base has not come online yet. These vast numbers of people will make the Internet user demographics more closely resemble those of general population than do current user demographics.
The actual number of people using the Internet can only be estimated, but most analysts' estimates range from 40 million to 50 million people. International Data Corporation (IDC) estimates the number to be 56 million at the end of 1996 and expects another 200 million users will join the Internet by 1999. Expect to see that number grow to over 130 million by 1998.
In addition, Asian countries and companies are quickly wiring themselves for access to the Internet. If anything, Internet mania is taking hold in Asia at a rate that outpaces most other parts of the world. Global Internet growth continues to double each year, but Asian use of the Internet has been more rapid.
On the other hand, the power shift from the living room to the den or home office is already happening. According to Broadcasting & Cable, the Internet's biggest subset World Wide Web (WWW) is challenging the tower of power in media: television. A Yahoo/Jupiter Web User Survey reported that 61 percent of the respondents said they are watching less television and spending more time online (net.Genesis, 1996).
According to the most recent survey, the total number of hosts (or computers) connected to the Internet rose 301 per cent from 3.2 million in July 1994 to 12.9 million in July 1996. However Australian, Japanese and Asian use collectively increased by some 349 per cent over the same period.
Table 1 below shows a comparison of Asian countries' Internet growth, 1994-96, Internet Hosts July 94 - July 1996.
Table 1: Asian Internet Growth, 1994-1996
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According to Mark Lottor's Domain Survey (http://www.nw.com/zone/host-count-history/), from July 1994 to July 1995, the number of hosts rose from 3.2 million to 6.6 million. North America has the largest number of host computers on the Internet, with more than 4.5 millions as of July 1995, up from 2.1 million in July of 1994. Western Europe showed the second largest amount of Internet growth, with 1.4 million hosts in July 1995. The growth rate for the Internet is greater outside the United States, which means the Net offers ever-expanding global marketing opportunities. The number of Web servers grew from 130 in June 1993 to 11,576 in December 1994, according to a net.Genesis survey. A more recent survey of all domain Web servers showed the number of Web servers rose from 18,957 on August 1, 1995, to 60,374 on December 1, 1995 (net.Genesis, 1996).
CONDUCTING BUSINESS ON THE INTERNET
For millions of PC owners, there is only one network that really matters, and that's the INTERNET. This vast collection of interconnected computers is the fastest-growing network around. More than 35 million people have access to the Internet, a more than tenfold increase from the 1990 (Business Week, February 1996). Today, the Internet is being overrun by the business world. More than 21,000 business - up from just over 1,000 in 1990 - are connected to the Internet. Today, more than 75% of all new users are logging on via corporate connections (Business Week, June, 1995).
An interesting Internet user profile was done by O'Reilly & Associates (citation: net.Genesis Corp. 1996). This survey looked at the use of the Internet by commercial users based on the number of employees in their companies (Table 2). The two largest groups of commercial users are those working in companies with fewer than 50 employees and those working in companies with over 10,000 employees.
Table 2: Internet Use by Commercial Users Based on Number of Employees (Source: net.Genesis Corporation, 1996)
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According to Granger and Schroeder (1996) the Internet revolutionising the workplace. Today businesses use the Internet to design new products, order equipment and conduct daily transactions. It is a means of almost instantaneous, low-cost global communications and nearly every companies can be connected to it. For many managers it has become indispensable; they cannot imagine being without its communications facilities.
On the other hand, there are proposals that people pay not by the time they spend online but by the byte. This could decrease the traffic (including congestion) on the Internet and the spontaneity that makes it so attractive to people. A similar proposal is usage-based pricing, where low priority ASCII traffic (most e-mail) would cost less than higher priority business traffic sending binary files over the Internet.
Two of the Internet business tools Gopher and the World Wide Web (WWW) are both relatively young. Timothy Berners-Lee conceived the Web during the 1980s, began developing it in 1989 and put in a formal proposal for funding in October, 1990. The Web first installed at CERN, the European Laboratory for Particle Physics in 1991. Two years later, in 1993, the first graphical Web browser was developed at the US National Centre for Supercomputing Applications. Netscape first became available in the fall of 1994; its first full release came in the spring of 1995. Netscape made exploring the World Wide Web easy. With easier access, more Web pages were obtained, which drew more new users of Netscape, more Web pages, and so on.
THE INTERNET TOOLS
The Internet is an information system. That means we need tools to find and retrieve that information. The most common Internet tools are explained in brief as followed:
E-mail is an electronic mailing system. It is by far the most common service available on the Internet. Mailing lists automatically distribute e-mail to all members of the list, and ensure that they get all messages sent by other members to the list. One type of mailing list resides in computers known as Listservers, which are responsible for sending out e-mail to all subscribers to specific mailing lists. A disproportionate number of sites deal directly with marketing, financial and economic information, making the mailing list environment one of the most active commercial areas of the Internet.
Usenet Newsgroups: At present there are more than 15,000 newsgroups, in many languages, on the Internet. These forums range from groups for researcher, and writers through scientific and technical discussions of various aspects of the computer world to discussions of employee rights. Commercial newsgroups that allow marketing, product news and services have developed in recent years.
Telnet is a system for signing into remote Internet computers.
FTP is a File Transfer Protocol system for downloading files from a remote site to our own computer or uploading from our computer to a remote site.
Gopher is a menu-based system for finding information on the Internet. Once a person finds a document's title, it can be retrieved by using arrow keys on a command line Gopher menu or by clicking the mouse using Gopher software on a PC. Gopher site is a collection of documents.
Archive is a key word and name search system for finding files at FTP sites.
Veronica is a indexing and keyword retrieval system for finding titles or file references of documents at many Gopher sites.
Jughead is an information retrieval system for Gopher using a search defined by the user.
Internet Relay Chat (IRC) is a system for live conversations on the Internet with talk among people from all over the world connected by the Internet to discuss a topic of interest.
Wide Area Information System (WAIS) is another search system, which finds information by searching for keywords across databases, file directories and lists, documents, newsgroups, and other Internet resources.
World Wide Web (WWW) is an Internet browsing and information retrieval system. WWW is the fastest growing Internet tool due to its ability to handle hypertext links, graphics fonts, sound and video. It allows an Internet user to view graphic files and video clips or listen to an audio track, as well as retrieve information (Seng, 1996). Based on the Hypertext Transport Protocol (HTTP), it uses hypertext markup language (HTML) to obtain Web pages, which can be easily navigated through the numerous hypertext links they contain. A hypertext link allows us to click on a reference and jump to another document. For example, if we are reading a Web page of business news, and we want to find the original article from a business journal, a hypertext link could lead either to a reference to that journal or to the text of the journal itself, in another computer a thousand miles from the first.
The launch of the World Wide Web coincided with increased business and personal interest in the information Superhighway. The addition of easy, graphical Web browsers, such as Netscape, Mosaic or Microsoft's Internet Explorer, made it easy for more people to surf the Internet and bought us today's explosion of interest in exploring the Internet. Web search engines are automatic programs that usually operate on the basis of compiling databases ferreted out on the Web. Almost every search engine (for example: Lycos, Yahoo, WebCrawler, Infoseek, Alta Vista, Magellan, Galaxy, Open Text, New Readers' Official WWW Pages, All-In -One, etc.) allows for a search to be refined.
Because the most efficient businesses have an advantage over their competitors, companies have an incentive to embrace technologies that make them more productive. Electronic documents and networks offer businesses opportunities to improve their information management, service, and internal and external collaboration. The personal computer has already had a huge effect on business. But its greatest impact will not be felt until the PCs inside and outside a company are intimately interconnected.
Moreover, running a Web server is like having a giant digital canvas on which we can paint our business presence in just about any way we want. It is not a static entity but a dynamic medium that represents a constant work in progress. A web site offers a powerful outlet to conduct the full range of business activities on the Internet. Some of the key uses of Web sites on the Web include:
Information and Publications: The Web promises to make information and publications from virtually all resources tremendously more useful and available. Information and publications filtered and packaged to match personal preferences and to offer convenience will motivate users to use and pay for Web-based content rather than traditional physical media. Similarly, the multimedia, real-time, and hyperlinked capabilities of the Web will materially distinguish Web-based content from traditional media.
Entertainment: The Internet has already become rich entertainment activities, including sports, movies, games, and more.
Shopping: The interactivity and convenient browsing capabilities of the Web empower the buyer. The Web is increasingly being adopted as the first stop in evaluating, selecting, and buying goods and services.
In addition, beyond the opportunities to engage in all types of business activities on the Web, a variety of benefits result from the efficiencies of operating online. Some of the key benefits of using a Web site for conducting business are:
Communications: Communications are being revolutionised by electronic capabilities, and new technologies riding on the back of the Web will continue this trend. New protocols continue to add new communication functionality.
Cost Efficiencies: Business users are already finding significant advantages in improved communications and lowering the cost of many corporate activities by operating a Web site.
Publishing on Demand: The traditional or conventional barriers to entry into publishing (size and scale) are no longer as important as engaging, compelling content. The Web offers exciting ways to deliver information on demand.
Electronic Information Distribution: A Web site offers clear cost and time efficiencies to both businesses and customers for delivery of information, files, and software. Many companies are already using the Web as their main delivery option for software.
Online Commerce: The ability to handle transactions over the Web is now a reality, with a number of options available for conducting commerce ranging from encryption to support for Visa or MasterCard transactions.
BENEFITS OF USING THE INTERNET IN BUSINESS
The Internet is a global network of computer networks, linking together millions of machines from the mainframes to the home computer. Any to computers connected to this network can exchange information as easily as if they were linked together directly. For the user, this means that we can send messages, retrieve files, visit Internet sites and inspect the information they hold anywhere in the World. Moreover, because of the way in the which the Internet works, the cost of doing so is likely to be that of a local telephone call whether we are talking to a computer locally, in Sydney or in New York.
Since there are no long-distance charges for using the Internet, and generally no volume charges either(for example, we can download as many files as we like and of whatever size) people sometimes get the impression that the Internet is free. It is certainly remarkably cheap for what it offers, and there are also many services provided for which there is no charge. But the Internet is not free: ultimately everything has to be paid for.
Businesses of all types and sizes will find that the Internet can serve a large variety of their needs including marketing, customer and vendor support, the exchange of information, and joint ventures for research and development. With the aid of the Internet, companies also can develop new products, take orders, receive electronic publications and documents, and retrieve data from specialty databases. Businesses can find technical advice, establish and maintain business relationships, obtain market intelligence, ferret out good deals, locate people with needed skills, and even provide products directly.
The important thing to using the Internet is ease-of-use. This has been the driving force behind any selection of client software and the selection of the Firewall software/hardware combination. If it is difficult to use, your staff will avoid using it in droves. All cases state that the most important thing of access to the Internet is the timely access of data that would otherwise have taken many hours, or even months to procure, if at all.
It is easy to save both time and money using the Internet. Its unique pricing structure means that it is now as cost-effective to send an electronic message ten thousand kilometres away as to phone somebody down the street. -with the big difference that there is no engaged dialtone for electronic mail on the Internet: whether or not the recipient is around when we send it, the post will be waiting for them when they connect. This means that as well as saving us money, the Internet saves time by sparing us the game of the telephone tag.
The Internet can make money for us too. One of the exciting recent developments has been the appearance of commercial sites and services directly over the Internet. We can now buy thousands of goods and services directly over the Internet-flowers, books, CDs, software-and pay using a credit card. Again, because of the Internet's global nature, there is often no reason why we cannot order and play for things are on sale halfway round the world.
For businesses, there is the possibility of reaching not just a local or national market, but a global one. By setting up a virtual stall on the Internet it is theoretically possible to reach tens of millions of people- and again for practically no cost. it is true that commerce on the Internet is still in its early stages, and many of the technical details-to say nothing of the cultural ones- have yet to be finalised. But the Internet will undoubtedly soon be one of the most important ways of buying and selling goods and services.
Moreover, for the Internet to grow into a truly global system, potentially reaching not million but billions of people, a huge investment will be needed. If this money is to come principally from private companies (as it almost certainly must) the only way to encourage investment on this scale is to integrate them into the fabric of the Internet.
The cost-benefit justification of Internet access and Information Systems in general is, and always be, a difficult one to prove but due to access of real time data, this would provide long term benefit of immeasurable value. For example, e-mail will increase its users to have a timely, easy-to-use method for communicating with many outside sources resulting in higher productivity, an increased knowledge base and better all-round communication.
On the Internet, companies expect straightforward, content-rich exchanges. Conversations on the network clearly imply that companies should and do give back to the Internet or offer value-added services. Taking advantage of the speed and size of the Internet, commercial ventures are finding a place in cyberspace- a place where they can reach customers, promote their products, and provide information to others. Businesses use the Internet for almost as many reasons as there are businesses. The followings briefly explains some of the benefits of the Internet for business:
BUSINESS COMMUNICATIONS
The Internet offers a business the opportunity for rapid communications with people and organisations across the globe, enlarging the visibility of a business a thousandfold. Being on the Internet allows a company to truly have a world market. Because of inexpensive access, the Internet is connecting even small, rural industries. Although the corporate giants certainly produce a great deal of traffic, the global network keeps small, out-of-the-way businesses in touch as well.
In addition, good communications enable more global corporate management control, aiding in consistency of results. Companies can be in touch with suppliers, branches, and subsidiaries in an effort to exert more control over variables. Companies can establish, negotiate, and maintain standards online. Moreover, businesses can improve employee morale by involving them in discussions about the business even outside their own unit, division, or regional office.
As an Internet tool, E-mail is a low cost method for maintaining local, regional, national and international communication. Messages can be exchanged in minutes as opposed to days or even months using regular mail. E-mail is a shared information utility and said to be one of the most important productivity going. Often, the first and most frequent business use of Internet connectivity involves internal and external communications. In addition, E-mail can be used to allow customers to submit specific product questions and to request specific sales quotes. Real - time feedback can be obtained as site visitors complete request forms. This allows for instant up-to-date statistical reporting which can help shape marketing strategy.
Granger and Schroeder (1996) expressed that networks and e-mail as some of the key communication technologies playing important roles in the way international enterprises conduct business and engage in the everyday transfer of information. Seng (1996) noted that e-mail helps to improve communication and productivity by breaking down distance and time barriers and speeding up the decision-making process through the provision of a forum for replies and -or clarifications.
In addition, mailing lists are unique extensions of e-mail on the Internet. Such lists allow employees, suppliers, customers, and potential customers to find answers to questions and keep up to date on topics of interest. An Internet mailing list is a mechanism for automatically forwarding all e-mail messages sent to the list to those people who subscribe to that particular list. By subscribing to relevant mailing lists, employees can obtain answers to questions and participate in discussions with tens of thousands of people around the world. This capacity of knowledge networking offers enormous potential for productivity/service improvement not available through traditional ways.
Use of the Internet lets a business in touch with branches and work teams at many locations, and permits high-speed access to vendors and customers. This can even establish a virtual community in which people who might normally never meet or even communicate, find themselves in conversation about substantive matters. Corporate culture is being affected by e-mail - some people become more communicative because they prefer sending e-mail to talking on the phone. In addition, companies can also make use of newsgroups to participate in areas of shared interest or to communicate with potential consumers.
Fojt (1996) indicated that improvements in communication will have an impact on both demand (the customer) and supply (the industry) through changed communication patterns. On the demand side, better communication technology will alter the dynamics of purchase decisions. On the supply side, better communications will alter the supply chain, streamline production economics and change relationships between players. As a result, the Internet promotes rapid and productive communication that can shorten the sales cycle significantly. It allows 24 hours a day and 365 days a year business communications which few businesses can currently offer customers.
On the other hand, businesses use the Internet to keep departments, work groups, and individuals in close contact. Listservs software allows work groups to communicate in an open manner similar to virtual meetings, and can serve as an ad hoc tool for Total Quality management (TQM) or process reengineering projects. This can help team members keep in touch and involved even while they are travelling. It is not unusual today for telephone conferences to occur, but not without considerable investment of time and effort in scheduling, planning, and discussion about who should and should not be included. Use of e-mailing lists can greatly facilitate such groups conferencing, since the members can participate at various times and from various locations. Electronic mail messages can be read and posted at convenient times and places.
Furthermore, improving communication with colleagues, government agencies, the academic community, researchers, and even competitors, can help improve the industry in general. The culture of the Internet is such that genuine exchanges on industry-wide questions and improvement are increasingly common.
CORPORATE LOGISTICS
Logistical concerns can dominate production planning and customer service issues for corporates. Since the Internet is the anywhere-anytime-network, employees, suppliers, customers, and others can keep in touch more efficiently. The use of e-mail and teleconferencing facilitates communication between markets, even in Sahara and Siberia. Because, when communicating via e-mail. listservs, and electronic conferences, not all participants have to be in the same place at the same time to conduct business.
In another words, businesses can maintain communications by way of 'asynchronous method,' meaning that both parties do not need to be online or in the same place at one time; rather, parties can exchange mail and information across time and distance freely. This method reduces the need to be so aware of time zone differences and variations in the phone and mail systems of various countries. Using the Internet lessens logistical concerns because employees do not need to be in the same room or city for meetings. Companies can establish and edit documents collaboratively in this asynchronous environment.
In addition, actual "real - time" communication is also possible, however, through the use of Talk, MOOs (Multiuser Object-Oriented environments), and Internet Relay Chat (IRC). Distance/time barriers are lessened by using the Internet for communication. The Internet is the "any-where/anytime" network, so exchanges with markets in Europe and Asia (across time zones) can be facilitated by the use of e-mail and conferencing. Listserver or group computer-conferencing software is another tool that can improve internal and external communications by helping to overcome logistical concerns. These services can help keep members of a work unit up to date and involved no matter where or when they log in.
Further, although we can link telephone conversations in a conference call, this procedure is rare because it requires a great deal of preplanning, scheduling, and dealing with the politics of deciding who to include. With discussions on the Internet, we can read or post messages any time, and new people can coin in, depending on their knowledge and interest.
Moreover, it is increasingly common for companies to support telecommuting employees and some corporations have employees in such far-flung places that they never come in to work. Work teams can be formed online, allowing these telecommuters to become part of the team. This can also be accomplished when employees are out of town or temporarily off-site.
GLOBALISATION AND ACCESS TO FOREIGN MARKETS
The phenomenon of globalisation has not been a sudden , nor will it be a discontinuous, development. Globalisation has been a product of change caused by economic, technological, and competitive factors. A hundred years ago, these same factors transformed companies from a regional to a national scope.
Three principal economic forces have driven companies and industries toward globalisation: economies of scale, economies of scope, and national differences in the availability and cost of resources. These forces have caused companies to specialise and standardise their products. This competitive strategy has became known as global chess and can only be played by companies that message their worldwide operations as interdependent units implementing a coordinated global strategy (Alkhafaji, 1995).
Corporations are able to bring a global edge to a provincial business by using Internet. With the Internet, we are much aware of national boundaries and distance. The opportunity for rapid communications can increase a business's visibility from local to global overnight. With its worldwide scope and volume, the Internet is probably the single most valuable tool available to an enterprise for gaining timely and significant insights into overall market trends and competitive pressures (Seng, 1996). Due to access to the Internet has gotten cheaper, even tiny 'cottage industries" can compete in the larger marketplace. Isolated businesses can compete at a much higher level.
On the other hand, for many companies, the use of the Internet makes a level playing field. A site on the World Wide Web, geared either to selling or marketing, could be accessed by anyone with direct Internet access from anywhere in the world. Very small businesses can establish an image on the network to compete with large businesses. It makes the pursuit of customers, vendors, and resources possible worldwide -allowing competition in a world market.
COMPETITIVE ADVANTAGE
In this rapidly changing environment, businesses are taking a look at their own organisations, structures, and processes in an effort to become more competitive. The Internet is a wonderful tool for engaging in these activities. Many companies are using e-mail and group conferencing to engage in business process reengineeering projects. Maintaining good communication and the exchange of data and documents is critical in undertaking the reengineering of business processes.
In addition, the ability to have the latest information about our marketplace and an awareness of the state-of-the-art in our industry allows us to keep our competitive edge. Learning what other companies are doing, knowing the kinds of information available, and discovering new markets can assist a company in maintaining a competitive advantage. Businesses enhance these efforts by being connected to and active on the Internet. As a competitive intelligence resource, the Internet is both an additional resource of information and a cost-effective means of sharing and disseminating information to decision makers. The Internet has a significant impact on the business environment, provides a variety of new revenue opportunities, making incentives for collaboration with existing competitors and providing niches for new kinds of competitors. Company home pages often yield information about product lines, substitute products, complementary products and innovation.
On the other hand , more companies use the Internet in the search for "best practices." As businesses try to become more competitive, many want to find existing practices that can help them improve their activities. As the Internet is a two-way knowledge bridge, the exchange of public information is crucial for meeting the needs of customers, business partners, and collaborators, as well as the general public. We can join existing conversations in the form of discussion lists -experts estimate that more than 9,000 of these lists exist (1996). Some lists focus on marketing, accounting, public relations, the use of high-technology processes and materials.
In some cases, businesses are using the communications abilities of the Internet to engage in a Total Quality Management (TQM) plan. Some companies use the Internet to maintain corporate process control across all company locations including even continents. Many companies use the Internet to search for successful practices of corporate and product improvement. In some cases, this search is overtly part of a TQM plan, or it may simply be a way of finding new solutions to problems. An awareness of the current state of affairs in any industry can give a company a competitive advantage; access to information about products, new ideas, and the current status quo is invaluable.
Furthermore, competitive advantage can be increased due to access to state-of-the art information on products, materials, new ideas and even the status quo in a given industry. What are other businesses doing? What kinds of information are available? Who are the main competitors in a specific business? The Internet mailing lists are terrific sources for keeping track of industry and government standards; in addition, various government databases also maintain regulatory and standards information. Many corporations use the Internet to engage in what some call "techno watch"- keeping a finger on the pulse of emerging and new technologies, and the market response to those technologies, both anecdotal and in terms of financial performance and the stock market.
In addition to that, the public information and discussion groups available on the Internet provide insight and feedback that is hard to get in any other manner. Here, workers at all levels of industry, researchers, and the public exchange information on marketing, research, technological developments, internal processes such as accounting and personnel, and external activities such as purchasing and public relations. These discussion groups are useful both for the information presented in them and for the pointers they provide to important sites, contacts, and databases.
Having the most up-to-date information about our markets and the state-of-the-art in our industry allows us to keep or increase our competitive edge. In some cases, the Internet is a tool for solving problems by accessing information, documents, and experts. Many companies cannot afford in-house experts on every process or activity, and use the Internet to locate and network with experts, through the mailing lists or through e-mail.
TIME AND COST CONTAINMENT
Many business are using the Internet to contain long-distance telephone and mailing costs. Recent studies have shown that businesses can save thousands of dollars using e-mail, in lieu of some long distance phone calls and postal deliveries. Substantial minimisation of an enterprise's printing and postage costs is possible because by paying a flat monthly fee an enterprise can send as much e-mail as it wants and whenever it wants (Seng, 1996).
For example, with first-class letters costing 45 cents each, a mailing of 1,000 pieces to customers would cost $450 for postage alone, whereas the same information sent by e-mail would cost 2 to 3 cents each - and the messages would arrive in seconds as opposed to days or weeks. Overnight mail (which typically costs at least $4-$6 for each delivery) can not compete with e-mail for speed or cost. In addition, long distance telephone charges, particularly international long distance charges, are reduced by use of e-mail. In addition, FAX gateways allow further savings on those long distance charges.
COLLABORATION AND DEVELOPMENT
The development team and project participants often use the Internet to keep in touch, and to exchange data, programs, and working papers from far-flung locations. The Internet also allows several small businesses to band together much more easily for product development. In another words, formation of partnerships among companies is increasingly common, and the Internet facilitates this collaboration for product design, vendor channels, research, and development.
In addition, many companies are in the position of having to comply with government rules, regulations, executive orders, or laws, which can be confusing. The Internet facilitates compliance with government guidelines and policies; many companies participate in Gophers, Web sites, and FTP sites in an effort to maintain their compliance levels. These services may be maintained by companies, organisations, government units, educational institutions, or more likely, collaborative arrangements. Businesses using the Internet can built internal and external links to built a virtual community. Using e-mail and distribution lists, individuals engage in wide-ranging discourses on business and industry as a whole are becoming more common.
On the other hand, formerly, companies tended to maintain separate corporate projects, or would establish a new vision or production unit to handle a specific problem. Now, many companies are temporarily pooling resources to put out a new product or service, and are using the Internet to do this through e-mail, group conferencing, and exchange of spreadsheets, documents, drawings, pictures, and sound files. Such groups allow those in marketing, research, engineering, and accounting to keep track of and provide input on a project through every step of its development. This ongoing discussions helps to keep projects on track by insuring that the needs of sales, marketing, accounting, and so on, are included as integral parts of a plan.
Furthermore, with the advent of new managerial styles, bottom-up product development, and the establishing of lateral work teams, the Internet facilitates new ways of doing business and maintaining communication. Collaborative approaches have been greatly enhanced by the Internet with its wealth of information, its capacity of supporting telecommuting and time-shifted communication, and its success in linking far-flung enterprises rather seemlessly. Such collaboration adds to the positive atmosphere needed to compete in the marketplace.
INFORMATION RESOURCES
The name of the Internet is information. Rich in resources, the Internet provides software, communications connections worldwide, and files of text, data, graphs, and images (from this world, and from out of this world via the orbiting Hubble telescope). The Internet provides access to databases, books, manuals, training information, experts in various fields, even sound and video clips and much of that information is free.
Today, the secret of success for a business is "information," and the Internet is the largest storehouse of up-to-date information in the world. Much of that information is free or available at very little cost. Corporations need up-to-date information of all kinds, and many businesses rely on state-of-the-art scientific and government information for their operations. This information abounds on the Internet in sites all over the world.
With more than 7 million (1996) machines connected to the Internet, the system has a multitude of databases, Web sites, Usenet, Gopher sites, FTP (File Transfer Protocol) sites, Listserver discussion lists, and conferences, the amount information available is staggering. Scientific and research data is available in large quantities. There are electronic newsletters, searcable databases, online experts -in some cases causing information overload and some have compared using the Internet to drinking from a fire hose.
Furthermore, some businesses find that the Internet is useful in helping employees learn new tasks and processes. There are many simulations, manuals, training aids, and tools available for software running on a variety of platforms, from UNIX tutorials to Windows tips and hints. There are also large quantities of instructional materials available online regarding the use of the Internet.
MARKETING, PROMOTION AND SALES
Internet marketing is becoming much more popular as businesses use the Internet more, and Internet users become more accustomed to marketing activities. By establishing a corporate presence on the Internet or the Web, businesses can participate in online marketing. The interactive nature of the Internet makes it excellent tool for gathering information and feedback about product market opportunities and potential new product ideas. Monitoring the various discussion groups can provide significant sales leads. Continuous current electronic publications on any type of marketing material, sales literature, manuals, technical documents or time-sensitive information can all be made available easily via the Internet (Seng, 1996).
On the other hand, in some sense, in terms of commercial activity, everything on the Internet comes down to promotion, of telling Internet users about a company and its products. This assumes a fundamental importance for a number of reasons. First, because the Internet is so large and growing by the day: getting noticed in cyberspace is no mean feat when the competition is so great and constantly increasing. Secondly, and perhaps crucially, there is a need to promote and to attract because the Internet audience is active, not passive. This is perhaps the pivotal difference from current media and the audience they bring with them.
Rowley (1996) expressed that at present, one can buy almost anything over the Internet. However, the focus is on computer hardware and software, and other information products, including books and databases access. Payment for goods is typically made in cash or by credit card. Until recently, such transactions were difficult over the Internet. An increasing number of enterprises are introducing systems to enable secure credit card transactions on the Internet.
Moreover, whereas conventional (traditional) advertising and marketing, be it in newspapers, on television, using hoardings or via direct mail, assumes a passive public which can effectively be bought a particular medium, and for a particular cost (expressed as so much per thousand, according to the demographics or particular characteristics required), the Internet user base cannot and will never be reached in this way (Moody, 1995).
Advertising and marketing materials on the Internet must have some attraction for the target audience. For example, they might offer information on a subject area, which includes details about a company's products. By providing a point reference a site can develop a reputation as worth visiting, and hence attract new visitors. It is important to emphasise that this kind of attraction does not preclude putting across a promotional message or even out and out advertising, but it does define a context and manner in which it can happen.
In addition, every company that wishes to promote itself on the Internet in this way must become a publisher, where the product is the site, which contains both editorial and advertising. That's why many of the most advanced commercial sites have been put together by professional publishers already expert in these areas. If a company just wishes to provide an Internet sales site where goods can be purchased then the incentive to visit has already been obtained through the products themselves, in which case it is enough to make the site easy to use. But again, sites with value-added -for example those that sell products but also offer useful information for potential purchasers-are likely to thrive more than those with basic sales pages, simply because the competitive attractions on the Internet are so strong. Through the use of Web sites, an enterprise can most effectively promote its products to existing and prospective customers by timely dissemination of corporate happenings, product announcements and recent strategic alliances (Seng, 1996).
Companies can establish this presence on the Internet by way of such tools as Usenet, Gopher, FTP, Telnet, and e-mail. The single most popular tool is a Web site, which lets users reach out and touch the company. Marketing on the Internet involves both research and active outflow of information. Marketing research is common on the Internet, where attitudes are tested, conversations actively pursued, and opinions solicited from many groups.
In addition, as a very important Internet subset, World Wide Web's one of the most exciting benefits is that it levels the playing field for businesses. Although large companies were the early leaders in establishing Web sites, the Web's power as a sales vehicle is inversely proportional to the size of the seller; the small companies can do better than big ones because the Web's worldwide reach can instantly transform a small outfit into a global distributor. By contrast, large corporations that already have their distribution networks in place often find the Web to be a niche channel, with direct Web sales registering only a fraction of their total revenue.
The Internet can provide a highly effective sales support mechanism not previously available to small and medium -sized enterprises. Through e-mail, salespeople can obtain current information quickly by contacting the appropriate people in their enterprises to customers' queries or alternatively, a technical person can use the Internet to contact a customer (Rowley, 1996). A small company can run a Web for direct sales and see an exponential growth in revenue. Setting up a site on the World Wide Web, thus gaining instant access to millions of people all over the globe, can be reached at a fraction of the cost than when using more conventional methods. This means that small enterprises can now compete equitable with larger ones (Cockburn and Wilson, 1996). Additionally, smaller businesses can be more nimble and more focused on the Web, which means they almost always can outmanoeuvre larger concerns, which typically take a much longer time to reach a conclusion and to act decisively.
At the same time, the economics of running a Web site make it extremely attractive compared with the cost of traditional advertising and marketing costs. Any business can establish a full-blown Web site and operate it for the first year for the cost of a single-page advertisement in a PC magazine with a readership say 100,000. For the same money invested in a Web site, one gets an entire business platform that can provide a lot of content to a potential audience of over 40 million people worldwide.
CUSTOMER SUPPORT
One of the prime business use of the Internet is in the area of customer support. Customers can reach a company on their own schedules-day or night- and obtain information from conferences, FTP, WWW, e-mail, and Gopher. The customer support information only has to be transferred to an archive once, and yet it may be accessed by thousands of customers and potential customers- a very labour-efficient and cost- effective way of distributing information.
Furthermore, a business with a presence on the Internet is perceived as modern, advanced, and sophisticated. Many companies maintain World Wide Web sites, Gophers, and FTP sites for customers use during working and nonworking hours. These services enable customers to receive assistance, get product information, and leave questions for replies during working hours. Some companies offer information files on Frequently Asked Questions (FAQs) for customers and potential customers. Customers of some companies find that they can place orders online and even receive products online (when the product is software or information), particularly through interactive Web sites. The Internet also reduce the labour costs of customer support service operations and eliminate the tedium of providing repetitive verbal answers (Rowley, 1996)
On the other hand, the value of genuine customer and public feedback cannot be overstated. In these days of a highly competitive and dynamic global marketplace, the company that can reach and satisfy customers will have an advantage- and the Internet can help in maintaining relationships with customers. The Internet is also a fast and efficient way of networking with vendors and suppliers. With its global reach, the Internet can assist business in locating new suppliers and keeping in better touch with them to aid, for example, in zero inventory planning. many companies, especially in the computer industry, maintain help forums on commercial services. Some companies also provide technical support online, as well as opportunities for customer surveys and feedback through Web sites and e-mail.
In addition, maintaining up-to-date postings of our company's product information and prices also allow our vendors to have continuous access to the information that is needed in order to promote and sell our products. Small suppliers find that they can compete with larger industries by being easily available via the Internet. In a business atmosphere promoting the concept of "getting closer to the customer," the Internet is becoming increasingly important.
Internet-assisted sales, where customers are sought and served online through Gophers and a variety of virtual storefronts, are also becoming more popular. Customers are thus sought before the sale and supported after the sale. Customers and product support and technical assistance by way of the Internet is time-efficient. Many companies provide e-mail assistance, including both individual and automated replies to e-mail questions and requests for information. technical sheets, specifications, and support are offered through Gophers and FTP.
Relationships with vendors and outlets are maintained via the Internet. In some cases, companies are doing actual sales transactions on the Internet. In addition, if the product is amendable to Internet delivery, as with software and information, the actual product is delivered via the Internet. Some companies are arranging product delivery through the Internet, where companies can establish and support actual distribution channels.
VENDOR SUPPORT AND NETWORKING
The Internet provides a fast method for networking with vendors and suppliers, increasing speed and variety in our procurement process. With its global tentacles, the Internet can help businesses locate new suppliers and keeping better touch with them. if we are using a software company in New York, milling machines from China, and suppliers from Australia, the Internet can help us in touch and maintain supply schedules. In addition, small suppliers can network with and compete with larger, more well known suppliers.
Further, the Internet assists companies in maintaining zero inventory systems because of speed of communications. Telephone systems worldwide vary in quality and availability but Internet connections tend to be reliable.
TRANSMISSION OF DATA
Many companies have been using the Internet for the transmission of data. The major financial and medical institutions in the world use the Internet extensively for exchanging information and files. Publishers are using the Internet to receive manuscripts, and transmit files for printing over the Internet. Books are written and edited collaboratively using the Internet.
In addition, the Internet protocols allow for the exchange of both ASCII and binary information. We can quickly send and receive binary information includes executable programs (software), program data files (word processing files, spreadsheets, databases, etc.), graphics (pictures, maps, digitised images, CAD/CAM files, etc.), even sound files and animated pictures. The network can send the equivalent of a 20-volume set of encyclopedias literally in seconds. This rapid exchange benefits corporate communication and correspondence with customers and vendors alike.
Furthermore, research and scientific organisations and educational institutions, the original inhabitants of the Internet, are using the Internet to transmit large quantities of data as well, but corporate users now transfer the largest portion of data.
CORPORATE PRESENCE ON THE INTERNET
There are numerous ways to establish a business presence on the Internet, and choice among them depends upon our business goals, our marketing plan for the Internet, and the level of market penetration we wish to achieve. Taking advantage of the size and speed of the network, commercial ventures are finding a place for themselves where they can reach customers, promote their products, and provide information to others.
At present, there are four common models for establishing a business presence on the Internet: Billboard, Yellow Pages, Brochure and Virtual Storefront. We may want to start with one of these approaches, and then expand to another as you become accustomed to working on the Internet and have resources to do so.
Briefly, by establishing a corporate presence on the Internet, businesses can participate in all the benefits of online marketing, publicity, and sales. They can use such tools as Gopher, FTP, Telnet, e-mail, and Usenet to build a virtual Storefront, make catalogues that can be browsed online, announce products, take orders, and get customer feedback.
ELECTRONIC COMMERCE AND DIGITAL CASH
There is no doubt that payment systems will be commonly used on the Internet very soon and that commerce on the Internet will subsequently grow rapidly. The Internet has undergone a vast change during the past few years, the number of users has risen dramatically, and it is still continuing to do so. Extensive commercial use could therefore be expected to be only a question of time, with just the lack of effective billing mechanism slowing this development.
Digital cash - a system
in which online shoppers swap real dollars for Internet script to pay for
goods and services - is on the way. At present, unlike commercial online
services such as CompuServe and Prodigy, the Internet is not a secure network-thieves
and vandals who hang out on the network routinely hack their way into Internet-connected
computers and filch passwords and other confidential data. Currently, there
are four main ways that business is transacted on the Internet:
Toll-free (800) numbers
Shopping clubs
Online credit card entry
Offline ordering
Many Internet merchants
display their goods and services in cybermalls on the World Wide Web but
post their toll-free numbers online so that Internet shoppers can order
by phone. Although not as convenient as allowing shoppers to type their
credit card information online, phone ordering is more secure and more
comfortable for the customer. Another option is shopping clubs, which skirt
the credit card security issue in a different way. For instance, Internet
Shopping Network, a Web-based catalogue retailer of computer hardware and
software, requires new customers to join the club by submitting their credit
card information by fax; any purchases are charged to that card.
Furthermore, many Internet merchants offer online order blanks so that shoppers can type credit card numbers directly onto their Web sites-despite the risks involved. In the mean time, some merchants are using on-the-fly security techniques or simply crossing their fingers and taking their chances. Another problem with credit cards is that they are not well suited to small transactions or micro-purchases. On a 10- cent item, a bank or credit card company spends more money processing the transaction than the item costs. On the other hand, some Internet merchants transact their sales offline by asking customers to send them checks.
Briefly, all four of these systems-phone ordering, shopping clubs, credit card billing, checks- have serious drawbacks when it comes to doing business on the Internet. Clearly, a better solution is electronic cash.
ELECTRONIC COMMERCE
With the end of restrictions on commercial activities on the Net that were imposed by the federal government of US, the business of the Internet is business. The Internet's commercial domain (.com) was the fastest growing segment over the last two years and is now the largest domain. Almost 80,000 commercial addresses were registered with the Internet as of July 1995. Every day approximately 150 new businesses connect to the Net.
On the other hand, Active Media (http://www.activemedia.com), a research firm in New Hampshire, conducted a survey to determine the number of commercial Web sites from September 1994 to August 1995. The study cited the Open Market Commercial Sites Index (http://www.directory.net) as the source of its data showing the number of commercial Web servers growing from 588 in September 1994 to more than 6,000 in May 1995. As of December 1995 the number was over 18,000.
In addition the current state of commercial activities on the Web is a mixed bag, with some wild successes but also dismal failures. The key point to kept in mind is that Web commerce is in its infancy. The Web exploded on the scene so rapidly that the institutional activities associated with any new technology have yet to catch up. Any new technology always moves ahead of the way people have been doing things. For example automatic telemachines where around for a number of years before they became accepted as a way to conduct banking. In the case of the Web, which is an entire medium for delivering a wide range of commerce functions, the same phenomenon is in place.
Further, the real opportunity of the Web for our business is recognising the gap between current and future environments. As people's attitudes and habits catch up with the technology, our business must be ready for action. In other words, commerce will come, but we need to prepare for it now by establishing our Web site, then add commerce functionality to be ready to grow with the trends.
Moreover, current sales and profit research supports the fact that electronic commerce has not yet caught on. Active Media estimated total sales on the Web at US$118 million between September 1994 and August 1995. Of the companies surveyed, 21 percent had sales greater than $10,000 during the prior month. Of these, 2 percent grossed more than $100,000 and 1 percent more than $1 million from selling on the Web. Of the 195 active Internet marketers surveyed, 22 percent reported profits from online activities. An additional 40 percent said they expected to be profitable within 12 to 24 months. 15 percent said they never expect their Internet activities to be profitable, but they find them useful for public relations. 14 percent were totally disappointed or did not expect a financial return for three to five years.
On the other hand, The Bureau of Business at American International College located in Massachusetts, surveyed executives at 48 Forbes 500 firms to gauge their plans for marketing and selling online. The companies surveyed had combined sales of more than US$188 billion and more than 765,000 employees. The executives predicted, on average, that about 67 percent of the firms in their particular industry would enable customers to access marketing data and transact business online and that 39 percent of a firm's annual sales would come from the Internet and online services.
In addition, The Rochester Institute of Technology conducted a survey of Internet shoppers, questioning 378 users who had bought products over the Net between February and May 1995. The study found Net users to be young, predominantly male, and well educated. Their average age was 32, 79 percent were male, and 67 percent had college degrees. The majority of purchases (64 percent) were software, books, music, magazines, and hardware. Most of the respondents (88 percent) were very satisfied or somewhat satisfied with their purchases, and only 4 percent indicated any dissatisfaction.
E-MONEY ON THE INTERNET
With e-cash, or digital cash, as it's known, we simply transfer money from our checking account to our digital cash account, converting real-world dollars or other currency into digital coins stored on our hard drive. When we spend those coins Internet goods and services, the transaction is credited to the merchant's account by the clearing bank and the proceeds are deposited into the merchant's bank account. Digital coins can not easily be stolen or faked, reducing the risk for both the buyer and seller.
In addition, digital coins are perfect for handling micro-payments, making it possible for all kinds of booklets, pamphlets, and other low-cost bits of information to be marketed worldwide. Currently there are four leading electronic cash systems vying to be top dollar: DigiCash, First Virtual Holdings, NetCash, and CyberCash.
SOME DRAWBACKS OF INTERNET USAGE
Privacy and security:
At present, probably the main drawback of the Internet usage for business
purpose is the lack of privacy and security on the Internet. Then, the
possibility of information overload and the need for acceptable electronic
payment schemes (Cocburn and Wilson, 1996). The most serious concern is
the security problem, which is exploited by hackers. Enterprises are understandably
wary about sending purchase orders over unsecured computer networks and
consumers hesitate to send their credit-card numbers.
Several software companies are working on secure World Wide Web software and some solutions are expecting in a couple of years (Seng, 1996). At the mean time, several very secure systems are available for use on the World wide Web and digital cash are in testing phase.
On the other hand, according to Rowley (1996) it may be difficult for consumers to locate shops on the Internet. Because the Internet is cooperative, no one takes responsibility for coordinating all the shops so that they are grouped into a single online marketplace. Most consumers expect to be able to compare the available products and their prices from a variety of outlets but, performing the price comparison for a certain product on the Internet is difficult.
CONCLUSIONS
The Internet will
provide unexpected new opportunities for businesses to change directions
and excel. At this stage, the value of the Internet is only beginning to
recognised and explored. It can be said that this is the network that is
changing the way of doing business in the world.
At present although there are some security problems, the Internet offers vast opportunities of improving business productivity and service quality and it will be the most effective business tool in the twenty-first century. Integrating the Internet into the business environment offers management better preparation for the ever-changing demands of the work environment. The Internet can be a powerful marketing tool, allowing companies to get their messages to a worldwide audience. By using Internet tools, a company can show potential customers much more about itself and its products/service than in a newspaper advertisement or television spot.
On the other hand, today the management of information technology becomes one of the most important strategic function towards reaching a competitive advantage. Accessing information as a strategic business tool is one of the challenges business managers have to respond to.
As a conclusion, it can be said that the Internet offers many opportunities to improve business productivity and service quality and perhaps it will the business tool of the twenty-first century. Companies that do not access this tool very quickly will be out of business of the Information Age (gates, 1995).
REFERENCES