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ELECTRONIC COMMERCE MANAGEMENT ITECH7606 Case Study Report Student Name Kuruppu Dilshan Rodrigo Student ID 30094858 1 ELECTRONIC COMMERCE MANAGEMENT 30094858 Executive Summery In this case study i am critically evaluates all aspects of an Coles Pvt Ltd that engages i electronic commerce or electronic business and communicate these key issues though this report base on under mention topics.Brief introduction about Coles and infrastructure, current implementation of the internet in Coles group, description about an impact has made internet on this organization and also different business models which they use to improve their turn over and customer relationship. Identification of value chains and i am going to discuss some of the problems that specifically might encounter electronic supply chain management , identify suppliers, make payments, check availability of supplies, automatic reordering of supplies through shared systems, track order progress, collaborative demand planning and forecasting.I have mention about few implementations which regards to e procurement and activities. Different types of e-marketing method which coles use to compete with other retain giants such as Woolie , different techniques have been used in my selected organization and how electronic communication to differentiate products and services. Finally some of the change management issues that they have faced during past years. 2 ELECTRONIC COMMERCE MANAGEMENT 30094858 Index Page No Introduction 03 Body 04 Conclusion 15 Reference 16 3 ELECTRONIC COMMERCE MANAGEMENT Introduction 30094858 In 1985 G.J Coles, primarily a Melbourne-based supermarket chain, merged with Myer Ltd, an upmarket Melbourne department store, becoming Coles Myer Ltd. The merger was brought on by an expectation of significant cost savings from sharing services and overheads such as purchasing, warehousing, information technology and property. However these benefits never occurred. Coles Myer was burdened with poor ma nagement, bad strategic decisions, and internal conflict. Their share price was faltering, and lagging behind their biggest competitor Woolworths, and profit had been stagnant for three years.In September 2001 the board appointed John Fletcher as chief executive, well known for his part in turning Brambles into a successful international company. Fletcher’s first priority was to do something about Coles Myer’s share price, however he recognised that to be able to change it he must first deal with the company’s strategic and structural problems. This analysis of organisational design and effectiveness will discuss the issues experienced by Coles discussion of theories related to the these problems and possible solutions, an examination of what is being done, and what else could be done to improve the situation.The implementation of common ,centralised IT and processes throughout the Coles Group would play a significant role in their future success. Using common s oftware and procedures will increase communication and coordination, and reduce organisational complexity. A centralised system is well suited to the Coles Group, and it will enhance control and monitoring; important processes in a machine bureaucracy. Leifer (1988) asserts that effective performance of centralised computer business information systems requires rules and policies that match the tasks of the machine bureaucracy organisation, supporting this statement.Moving to a centralised system would appear to be a significant change, however Rockart and Scott Morton (1984, cited in Leifer 1986 p 66. ) believe implementing a centralised system in a machine bureaucracy requires few changes on part of the organisation†. 4 ELECTRONIC COMMERCE MANAGEMENT 30094858 While online shopping in the grocery and liquor market represents only a small proportion of total food and drink sales in Australia it is growing significantly. Coles Online saw a doubling of sales in 2010. Coles sells liquor online through our Liquorland Direct and Vintage Cellars Wine Club.We have experienced growth in sales in the online liquor market as we have seen in groceries. In the more mature online grocery shopping markets, such as in the UK, online shopping represents about 4 per cent of the food and drink market, and it is expected to grow to 12 per cent by 2014. 2 Coles does not anticipate material employment impacts in its business from the growth in online retail. The growth in online retail has lead to an increase in employment to service the online market. Online purchases are picked from the existing supermarket shelves and require drivers to delivery groceries.When Coles first started online sales, distribution centres were used to pick and deliver groceries. Now, Coles online operates out of selected supermarkets Presently every organization has great impact on internet; quite a lot of businesses merge into online business. coles group introduce their first web page long time ago, due to rapidly changing technology and challenges they move out and implement according to overcome and withstand modern word technical challenges too at the moment coles web page run by aspx which is provide dynamic web rather than static web pages which is display only information to customers.Fig 01 5 ELECTRONIC COMMERCE MANAGEMENT 30094858 Above fig 01 show how dynamic web page work technically. Even though it seems to be quite easy but there are number of information technology master minds work at back stage 24Ãâ€"7 to provide secure and reliable service to customers. Coles implemented rich interface page using latest web development technology to provide wide range of facilities to their customer. Online shopping through the Coles Online brand began in 1999 with delivery across the Sydney and Melbourne metropolitan areas.The service was initially restricted to the Sydney and Melbournemetropolitan areas as the service was run out of a distribution centre in each capital city. The online service moved out of distribution centres into six stores across Sydney and Melbourne in 2008. In 2010, our online service expanded to all States and Territories in order to respond to customer demand. Now Coles Online services over 85 per cent of Australia’s population with delivery in all capital cities and major towns. Coles online businesses offer four types of services †¢ Home delivery: Delivery to your doorstep or kitchen bench via refrigerated van Business delivery: Delivery to offices and a wide variety of other organisations requiring groceries †¢ Remote delivery: Delivery to remote areas of the NT, WA and far north Queensland. Remote customers of Coles historically ordered via telephone or fax with their own courier arrangements in place (road, rail, barge or air). This has been transitioned to full visibility of a virtual supermarket on the internet with significant benefits all round †¢ Collection: Customer collection of groceries ordered online – either at a designated Coles Supermarket or another location with chilled storage facilities . ELECTRONIC COMMERCE MANAGEMENT 30094858 Coles Online features †¢ A huge range of all popular supermarket items (covering 22,000 SKUs) †¢ Online exclusive specials †¢ Weekly catalogue specials †¢ Unique product offers such as ‘Fruit & Vegetable Boxes' and ‘Create Your Own Hampers' †¢ Personal account areas to manage your orders and create custom lists †¢ Express Shop search functionality †¢ Fresh and easy recipe ideas †¢ Seasonal product range †¢ Detailed product information and nutritional information †¢ A convenient range of delivery time slots †¢ FlyBuys points.You can continue to collect 2 standard FlyBuys points for every $5 you spend with Coles when you register your FlyBuys number in ‘My Account’. 7 ELECTRONIC COMMERCE MANAGEMENT 30094858 The Internet can help companies create and capture profit in new ways by adding extra value to existing products and services or by providing the foundation for new products and services. The Internet Business models are abstraction of what and how the enterprise delivers product or service, showing how the enterprise creates wealth by taking advantages of the Internet's rich communication capabilities.They provide the customer with a new product or service; They provide additional information or service along with a traditional product or service, or they provide a product or service at a much lower cost than traditional means. How do these organizations' business models affect the way they market themselves? How does the target market learn more about this site? Coles online have business models that rely entirely on internet transactions. They need to create volume sales as efficiently as possible. Therefore, they have done everything they can to direct consumer traffic to their sites regardless of their product.Through r eferral sites, online advertising and most importantly web services, they have been very effective at this goal. They have expanded via third parties to increase their web presence. Consumers learn more about both of these sites almost automatically if they search for a product on the web.. AZ is not a revenue targeted site, but they probably prefer more AZ consumers using their online services. I have seen links to their site on other web sites, primarily AZ newspapers online. Identify benefits of this site to the organization and to the site's visitors.The benefits of Amazon's and EBay's sites to their respective organizations should be obvious from the other answers. These businesses are entirely web-based, so they would be non-existent without the site and its visitors. All of their revenue, brand recognition and global presence comes from their sites. Unlike hybrid retailers like Walmart or Target, you will likely never see an Amazon physical bricks and mortar store. The benefi ts to the consumers of Amazon and EBay are the wide array of products that can be 8 ELECTRONIC COMMERCE MANAGEMENT 30094858 purchased and shipped directly to their home.Used products, unusual products, competitive pricing, the power of database searching and one stop shopping are also benefits of both sites. With AZ, the benefits to the organization are mostly in servicing costs. It is much cheaper for Arizona government if everyone in Arizona renews their driver's licenses online. Also, Arizona wants to grow, both in number of residents and number of businesses. By providing a central site for prospective residents and business owners, the AZ site might attract some more residents and businesses. The benefits of AZ to consumers is the ease of performing Arizona services online.Using myself as an example, I seek to do anything possible online, rather than drive to or call a service center. I have renewed my drivers license at the AZ site as well as downloaded tax forms and applied f or duplicate vehicle titles. When we look at this organization as a whole , i would be able recognize there two different business models involves in their business process such as B2C business to customer – It applies to any business or organisation that sells its products or services to consumers on the internet for its own use. About one fifth of e-commerce takes place between businesses and consumers.B2C is of greater interest to the public, because most of the online buyers are people (in millions) and not organisations. On the other hand B2B business to business It involves companies buying from and selling to each other, on the internet. In other words it is commercial activity between businesses. Online B2B is growing fast in both horizontal and vertical markets. In a horizontal market, companies in one industry sell to companies in other industries, whereas in a vertical market business takes place among companies operating in the same industry in a sequential supply chain.Under the B2B process, a higher level of collaboration between retailer and supplier is required. In particular this will affect both Coles and supplier’s IT systems and business processes. Trading via B2B results in these three outcomes ? Cost effective Administration 9 ELECTRONIC COMMERCE MANAGEMENT ? ? Timely Outcomes Reliable Processes 30094858 In its simplest form, B2B documents follow this approach All orders placed by Grocery Holdings Pty Ltd (GHPL), the wholesale operation servicing our retail Brands, will be transacted this way. Currently the following are out of scope for the B2B program ? Direct to store deliveries ?General Merchandise Cross-dock deliveries to GHPL ? Deliveries of Fresh Fruit & Vegetables and Fresh Fish ? Random Weight items The Benefits to suppliers of moving to B2B 10 ELECTRONIC COMMERCE MANAGEMENT 30094858 There are many benefits for both suppliers and Coles by moving to B2B trading processes. Though not all may apply to every supplier he re is a list of the more commonly known benefits: Electronic messaging is a fast, accurate and versatile way for passing information between trading partner’s systems enabling better business decisions to be made. The speed and accuracy of the scan packing process leads to a reduction in pick errors.This results in a reduction in claims for incorrect delivery quantity that occur when a manual picking process is used. The introduction of the electronic invoice (eI) means that the occurrence of lost ‘paper’ invoices ceases. This, in turn, improves the average days outstanding of supplier invoices. GHPL DC’s prefer to deal with compliant suppliers because of the labour savings B2B generates. DC’s have cost budgets too, and it makes sense for them to schedule deliveries at the cheapest times to process them (i. e. during standard business hours, wherever possible).The B2B process enables information such as batch codes and use-by dates to flow from syst em to system easily and accurately, and this helps ensure customers consume goods at their freshest. Moving to B2B with Coles means suppliers will trade using a single, uniform process across all Coles brands. Suppliers who already trade with other retail business (e. g. Kmart, Target or Officeworks) will be familiar with the B2B process, as these businesses have been using B2B exclusively for many years. The web-based TPM system enables suppliers to view their PO, ASN and ADM, in real time, day or night.B2B improves sales for both Coles and suppliers because the POA enables Coles National Inventory Team to order additional stock for items not fully supplied on previous orders. 11 ELECTRONIC COMMERCE MANAGEMENT 30094858 Faster truck turnaround time occurs because DC’s ‘scan receive’ the stock into their systems, as opposed to the old manual process. B2B compliant suppliers are already talking to their transport Six Steps to Implementation The following steps outl ined in the following pages have been designed to help you implement a B2B eCommerce solution.Auditing your current internal processes will help you determine how much work is required to prepare you for the B2B process. You may have already partially completed some of these steps, which can be discussed further with your eCommerce Implementation Team member, to confirm your requirements. The 6 steps are: 1. Project Initialisation 2. Research and Plan 3. Install and Test 4. End-to-End Validation and Accreditation Testing 5. Cut Over and ‘Go Live’ 6. Monitor Step 1: Project Initialisation As a supplier to GHPL, you may have been approached directly by Coles to participate in the B2B eCommerce program.This approach may have taken the form of: . . A request for a one-on-one meeting Direct mail and follow up We will discuss the B2B requirements, operational processes and the steps needed to implement the B2B process. Specific business objectives and required timelines will be detailed. 12 ELECTRONIC COMMERCE MANAGEMENT 30094858 If a face-to-face meeting or conference call is organised consider bringing the following participants ? ? ? Account Manager(s) Technical staff (internal or consultants) Supply Chain staffStep 2: Research and Plan Once you've agreed to implement a B2B eCommerce solution, you need to think about how you will implement it and what you need to do to set up your solution. This step is very important and you should spend the time necessary to get it right for your business. Research involves: . . . . Assessing your current processes, systems and overall direction Evaluating potential solutions (if none have previously been implemented) Scoping, costing and selecting a final solution Familiarisation with the planning and testing functionality provided by the CMT.Understanding the change management requirements within your business given the required process changes to implement B2B Preparing an implementation plan that establishes yo ur readiness to trade electronically in the required timeframe. 13 Step 3: Install and Test This step will vary greatly from supplier to supplier depending on your size, type of merchandise, solution provider and current infrastructure. Typically during this phase you will: Install any additional or upgraded hardware and software. Test communications and all the B2B documents as part of your systems development cycle.Define, confirm and test re-engineered processes from receipt of order to despatch. All document validation will be facilitated via the use of the CMT. When you've completed this step, you will be ready to undertake a complete set of End-ToEnd test scenarios (from electronic order to eI) with Coles prior to being accredited. Step 4: End-to-End Validation and Accreditation Testing During this step several test scenarios will be performed commencing with an electronic test order and ending with an eInvoice. You will be required to receive and process a test order as if it were a real order.Contents of the order must be validated prior to picking and packing All suppliers are required to respond with a POA for every PO on the day it is received. The packing process must result in SCM Logistics labels and ASN(s) being generated. You will not be required to deliver the stock ordered on your test orders. The ASN is transmitted to Coles and the SCM Logistics labels are sent to the eCIT for verification. 14 ELECTRONIC COMMERCE MANAGEMENT The eI is transmitted to Coles. An ADM will be sent to the supplier to advise that NIL stock was receipted. 0094858 B2B accreditation is achieved when you have successfully completed all the steps in the CMT. Step 5: Cut Over and Go Live Your eCIT team member will guide you through a comprehensive ‘Go Live’ Checklist as the final check that all elements of your change to B2B have been understood and considered. Commencing on the agreed ‘Go Live’ date, Coles will expect all orders to be processed using the B2B process. The eCIT will advise relevant Coles receiving locations of the date you expect to commence live B2B deliveries.Step 6: Monitor This is an ongoing process. Coles will randomly check and monitor your delivery performance to ensure that integrity requirements are maintained. Detailed checking will initially be quite intensive until the system has established your process integrity. 100% integrity will result in less checks being performed, however, deliveries with errors will increase the level of checking. Increased checking will slow processing down considerably and increase processing costs proportionately. 15 ELECTRONIC COMMERCE MANAGEMENTConclusion 30094858 Finally, adopting e commerce to Coles has done huge impact on whole organization in various ways, letting more opportunities to interact with customer, receive feedback and record data by using Flybyes then introduce customised range of products according to sessions and personal interest of the year. Usi ng high technical business system to make life easier for top to bottom management and smooth run of organization to provide better customer satisfaction on the other hand increase their productivity and revenue.Bargaining power of buyers To strengthen the relation between buyers and suppliers using high software investments were things in the past. Modern technologies allow forward and backward incorporation in the value chain. Coles is one of the challenging competitor for all other retailer ,i believe Coles is top in the Australian retail industry. 16 ELECTRONIC COMMERCE MANAGEMENT References Books ? 30094858 Burton, R. M. , Lauridsen, J. ; Obel, B. 1999, ‘Tension and Resistance to Change in Organizational Climate: Managerial Implications for a Fast Paced World’, Retrieved April 26th, 2007 from Wood, J. ; Chapman, J. ; Fromholtz, M. ; Morrison, V. ; Wallace, J. ; Zeffane, M. ; Schemerhorn, J. ; Hunt, J. ; Osborne, R. 2003, Organisational behaviour: a global perspecti ve, 3rd edition, John Wiley & Sons Australia Ltd, Milton Qld ? Leifer, Richard 1988 ‘Matching Computer-Based Information Systems with Organizational Structures’, MIS Quarterly, Vol 12, no 1, pp 66. ? Rockart, J. and Scott Morton, M. 1984 ‘Implications of Changes in Information Technology for Corporate Strategy’ Interfaces, Vol 14, no 1, pp. 84-96, cited in ?Leifer, Richard 1988 ‘Matching Computer-Based Information Systems with Organizational Structures’, MIS Quarterly, Vol 12, no 1, pp 66. Journals ? Simpson, Kirsty 2006 ‘Coles drops Kmart, Bi-Lo’, The Age, August 1st, 2006, Retrieved April 26th from ? Robbins, S. P and Barnwell, N. S. 2006, Organisation Theory: Concepts and Cases, Prentice Hall, Sydney 17 ELECTRONIC COMMERCE MANAGEMENT Websites ? www. theage. com. au/news/business/coles-drops-kmartbilo/2006/07/31/1154198073979. html ? 30094858 www. lok. cbs. dk/images/publ/Burton%20og%20Obel%20og%20Lauridsen%20tensio n%202000. pdf 18