Recent Developments in Information Technology
The Wednesbury branch of IKEA uses information technology as a mean of internal communication, when it wants to communicate between members of the organisation. The organisation use internal communication to transfer information and initiate action. The organisation also use internal communication to pass on restricted information within the organisation, for example new furniture that IKEA is designing.
The Wednesbury branch of IKEA uses information technology as a mean of external communication, when it wants to communicate outside the organisation. The organisation has a public image, and this conveys a message which influences everyone who is connected with it, i.e. customers, shareholders, competitors, suppliers, the government, and the community. It is important to provide a strong image to these people because; it will create a better external environment for the organisation. The Wednesbury branch of IKEA has a Company website that provides members of the public, formal information about the organisation.
Looking at the Corporate I.T Network Policy of IKEA, the organisation has an ISDN (Integrated Services Digital Network) network. The advantages of having an ISDN network are: it can transmit video and voice signals in digitised format; there is no need for modems; there is no need to transform the computer’s information into sound; and information transfer is faster and more reliable. A copy of IKEA’s I.T policy is in the Appendix section.
The uses of e-commerce
E-commerce (electronic commerce) is an important aspect of the Internet, to have emerged in the recent times. According to Scottish Enterprise, ‘e-commerce is a business transaction through electronic media (Internet, e-mail, extranet, intranet, EDI), which supports the buying or selling of goods or services’. E-commerce can be sub-divided into three categories: business-to-business (B2B); business-to-consumer (B2C); and consumer-to-business transactions (C2C). E-commerce is often referred as an e-tail, e-trade, e-business, or trading online.
There are number of purposes of having an e-commerce in an organisation, such as IKEA. The main purposes include: 1) Marketing of goods and services 2) Retail of goods and services 3) Customer service 4) Supply chain management (also called an e-procurement). 1) Marketing of goods and services Marketing of goods and services can be sub-divided into two sections: marketing products in a website and marketing the website.
a) Marketing products on a website Businesses can successfully market the products on a website, depending on the navigation, frequent changes, interactivity and a choice of headline products on the home page. Navigation ensures that the minimum number of mouse clicks is needed to find a particular product. Frequent updates can encourage repeat visits. Interactivity can be used to retain customer loyalty. Businesses such as IKEA need to ensure that the customers are informed about the promotional offers, when they log on.
b) Marketing the website Marketing the website may involve an organisation adding an e-commerce site to their existing retail operations (this is known as ‘clicks and mortar’). This may make it easier for e-commerce businesses to market their products and services. They need to encourage customers to use their e-commerce, by offering them tangible benefits, such as lower prices and home delivery.
2) Retail of goods and services Retail of goods and services can be sub-divided into two sections: traditional retailers and dotcom companies.
a) Traditional retailers
Traditional retailers, such as Tesco have a customer base, which can easily attract customers to their website. The chief of these traditional retailers will be concern with payment, packaging and delivery. An e-commerce organisation can set up credit card facilities, using a bank’s merchant services. An e-commerce organisation can negotiate deals with distributors, such as the post office, to deliver goods within pre-set time. Also, an e-commerce organisation can establish a call centre to deal with customer’s complaints and enquires.
b) Dotcom companies Dotcom companies are start-up companies that sell goods and services over the Internet. Many dotcom companies are constantly trying to recreate a similar shopping experience that is offered by the traditional retailer, for example sound, video, and interactive product demonstrations. This may go beyond the two-dimensional nature of e-commerce, known as e-tailing.
3) Customer service An e-commerce organisation can combine customer purchases with back office systems, like stock control to give accurate information and feaster delivery. An e-commerce organisation can able to provide a more personalised service to its customers, by providing the retailer’s contact details. An e-commerce organisation can deal with common queries in the Frequently Asked Questions (FAQ’s) section. Customers can receive a 24 hour service and their e-mail queries can be dealt with on time. Also, an e-commerce organisation can set up a small-scale call centre operation, to deal with their customer’s enquires.
4) Supply chain management A supply chain management is a business-to-business function, which enable small businesses to provide its goods and services, without the need to keep a large stock. These small businesses can make orders from its suppliers at the latest possible moment, to sell the goods immediately and reduce the stock level. This may lead to improve cash-flow.
IKEA use e-commerce for marketing goods and services and customer service. The organisation provides high-quality products at lower prices and this attracts customers to visit their website. In fact, 153,000 visits a day were made to the Company website in 2004. Customers can easily access to see IKEA’s products, just by clicking onto ‘Our products’ section. The Company website is very colourful and attractive to the customers. The information displayed on the website is easy-to-understand and clear to read. The IKEA’s product section contains a list of products that the organisation offers to its customers. Each product contains information about the product and a graphic image of how it looks like.