Re: PLogistics

Introduction

The scenario presented by the question at hand demands a discussion of not one, but many, aspects of e-commerce as well as the well known caution given by business academia that ecommerce will seldom thrive in isolation from the “bricks and mortar” aspect of operations (Tameem and Wheeler, 2000:1090). In this vein, the discussion below will involve some of the key technologies involved in this venture. Some of these technologies have often been based on Mobile Commerce & Location Based Commerce and, therefore, their critical impact upon logistics will be accordingly discussed. As an e-business consultant, it will also be necessary to elaborate upon the mechanics of Electronic Customer Relationship management.

The other point for discussion is how over reliance on ecommerce can actually damage the human aspect of a business, and whether the electronic business design involved here should actually involve special electronic design (Tameem and Wheeler, 2000). The assumption that this advice is based upon is that PLogistics have already taken care of security and terrorism issues, as well as the legal nuances of regulating exchange of goods between people since technically such deliveries would not be fall under the category of transactions in “the course of business”(Benjamin and Wigand, 1995). This would essentially involve many queries. How would matters be regulated between the delivering parties and the receiving parties in the event of loss or damage? Who would accept liability for goods damaged in the course of delivery (the company or the deliverer)? Such a scenario reminds one of the Napster saga where the company utilizing P2P business models found itself immersed in law suits for the copyright infringement carried out by the file sharers on its network. Therefore, the author assumes that, like any other prudent business, Plogistics have taken care that a flood of lawsuits does not overshadow the profitability of the business later on (Clegg et al, 1997).

One of the pivotal factors to the success of PLogistics would be the presence of network integrity both internally and externally. This would be imperative to ensure that the credit card and personal details of P2P customers are intact and safe from hackers and identity thieves (Scott, 2000). As an ecommerce consultant then, the author would not advise PLogistics to maintain consumer credit card information online on a server that would be vulnerable to theft too long after a transaction has been completed (Scott, 2000). There would be issues of maintaining online tracking and traffic issues during particularly busy periods like Christmas or Easter when many parcels are being sent and received. In such a case, the amount of time the internal or external server remains down can damage the Ecommerce based business’s credibility.

Coming back to the managerial realities involved in e-commerce, this brings us to quite a multidimensional set of factors and realities about IT itself. The author believes that these matters are better discussed in detail in the paragraphs after a detailed discussion of the ecommerce set at PLogistics from a logical point of view.

Introduction to the role of EC in logistics

Ecommerce has traditionally had a profound effect upon digitalization of transactions within supply side intermediation. E-commerce has revolutionized the way the business world views the process of obtaining, processing and transmitting of business information in the sense of which Houmann (2005:147) has called,

“Possibilities of a virtual, global presence have been claimed to change the economies of time and space, with remarkable consequences for current international business practices… establishing a virtual presence for completing transactions through a site on the world wide web (www) can, potentially, create an instant global and near-frictionless exchange environment, with customers worldwide minimizing end-users’ transaction costs and establishing direct rather than indirect channel structures (p,147).”

Many academics have found it interesting, to say the least to, investigate the impact of the Internet upon supply side intermediaries, in terms of supply activities (traditional and new), and the future of EC based supply activities (Houmann 2005:150) .The main question at hand is whether Plogistics will be able to convince its consumer base that it is running a “professional” service based on a Napster type P2P model, but based outside the confines of the web matrix (Schmitz, 2000). Many academics have been critical of the success of the same in the physical word even armed with the convenience of EC tools, due to the costs and complications involved therein as well as the administrative nuances (Lin, 2002). In theory, it has been stated that suppliers when dealing directly with supply intermediaries expect a relationship of mutual trust, where the actual identification of the delivering party or business becomes important (Li, 2004). Although in recent years, many businesses have taken to outsourcing their delivery functions to third party businesses, the use of P2P has not been fully brought into practical use yet. How reliable such systems will be is yet to be seen in terms of legal liability as well as trust by the consumer base. Furthermore, this also raises the obvious question of whether the consumer expecting an important delivery will be comfortable that their goods are being transported in someone’s private car or transport, and the transaction may or may not be fully insured (Li, 2004).

In the context of such businesses it is true, nevertheless, that the advent of the Internet and EC (E-commerce) tools has indeed allowed effective facilitation of instantaneous business information exchanges between suppliers and the consumer. EC tools have become the Holy Grail for achieving effective market positioning, by receiving and utilizing intensive information at the right place and right time. Such supply side intermediation involving the P2P model has its benefits in division of labour and specialization, and ultimately the move towards a cheaper and more revolutionized delivery service. Li (2004) has spoken of ecommerce revolution as a means of achieving these cost cuts as in a move towards disintermediation. Li (2004) summarizes the advantages of the same by stating that EC tools in logistics allow for faster and more informed decision making for a business, as well as allowing for more streamlined supply chain inventory management and better economies of scale. At the same time, outsourcing and division of labour for such functions has the obvious advantage of disintegrating business risks as well as faster transaction processing and delivery order fulfillment (Payne, 2002).

Furthermore, when we look at the Ecommerce revolution, businesses like PLogistics have benefited immensely from the potential of a substantial (if not complete) removal of physical boundaries to relax time and geographical restrictions. Such a convenience would allow Plogistics to hire remote drivers online, or even enter into arrangements with geographically remote private parties through electronic contractual arrangements.

Mobile and Location Technologies: An analysis from the point of view of PLogistics

After a discussion of the matters mentioned above, quite a number of points come to the fore, from the perspective of an ecommerce consultant. PLogistics is planning to do something most of the “victims” of the dotcom bubble did in the 90’s and ultimately witnessed a demise of their previously profitable businesses when the dotcom bubble actually burst. Companies that make heavy use of internet and ecommerce tools seldom prosper because they often ignore the intricacies of market positioning, as well as the geographical aspects of the EC (E-commerce) tools.

The location of a company will always matter, no matter how mobile the business really is. This has been aptly labeled as the “paradox of mobility” by many academics (Miles, 2005). For example, if we look at PLogistics we know that it will be making an abundant use of Mobile Information Systems, because a business in the situation of the same type has the need of being in different places at once and must have access to its data and communication resources wherever it moves. What PLogistics is envisaging now is basically a “scattered” version of its operations (Miles, 2005). This would need to be complemented by Location Technologies like the GPS system, to identify the delivery stages and patterns of the goods. Such technologies would basically have a large fixed cost of implementation and infrastructure but currently available systems for the same are less costly and have been reduced in size, and are thus easy to implement (Miles, 2005). Such technologies allow for not only the precise identification of goods’ whereabouts, but also provide access to information and communication while providing effective functionality to businesses like PLogistics. If we take the example of delivery companies like FedEx and OCS International, these companies also outsource their functions to third parties albeit on a higher level (to companies and not people, basically). At the same time, their legal and logistical frameworks are complexly drafted and designed. Although in comparison to them PLogistics does not require too complex a system of “tracking” and “mobility”; any system designed for the same reason would need to be properly integrated, possibly on the level of an internal ERP (Enterprise Resource Planning) system well integrated with the outsourced third parties (the car drivers) (Miles, 2005).

Another example of how this system has been utilized at a similar level is the interesting use of satellite locators and GPS systems by Cab companies, which hire private cars and drivers but have effective communication and track record of each car and each customer (Miles, 2005). Imperatively such companies do not exist in the air (or on the internet matrix) but also have physical locations where the integrated EC tools are well knit and set up. PLogistics, due to its operational nature will of course be, as mentioned above making an abundant use of GPS systems, which utilize satellite observation to give exact geographical coordinates of the location of goods and people. However, other tools can also be utilized in terms of location based warning for the drivers about an upcoming delivery exchange on the way or a breakdown of traffic, which could possibly cause a delay. Once identified, such a delay or exchange can be communicated via the Internet tracking system to the consumer. However, such a technology would not identify the driver specifically, and it is believed that there is no need to do so either because the parties the delivery functions are being outsourced to here are not permanent employees of the company.

Thus, for the purposes of the functionality of PLogistics a simple centralized database would be more than sufficient. Academically, the matter of how important identification is has always been debated. Miles (2005:49-71) sums up the debate thus,

“Technologies for identification are extremely significant…. (But) far from always, this augments the locational and positioning dimensions of new IT. The devices that say where you are, also say who you are. Strictly speaking, of course, such device-based identification is really only telling us of the presence or whereabouts of the device itself. Controversy has already been occasioned by the use of RFID tags in commercial goods and items such as library books (or supply chain and logistics tracking, for anti-theft measures…. (w) hereas security functions may provide some reassurance, they are equally liable to add to generalized unease and concerns about social dangers (Miles, 2005:68).”

The Use of ERP and CRM as a means of effective ecommerce management at PLogistics

PLogistics will have to invest heavily in some type of Customer Relationship Management (CRM) or an ERP based information system. These systems have the overall advantage of not only increasing a company’s profitability, but also allow for an increase in overall revenue by streamlining customer centric work flows (Park and Kim, 2003). Such an IS system would allow a company like PLogistics to achieve and further its goals through a thorough a technology based managerial effort to combine/integrate operations and the electronic business processes in order to be used to understand the preferences and responses of the average PLogistics customer and to satisfy the needs during any given interaction (Delone and McLean, 2002) .The CRM or the ERP serve to automate existing business processes and are thus both information-based and technology-based systems. Like many contemporary logistics based organizations, PLogistics will find that it will also have to invest heavily in implementing CRM software tools to support logistic processes. As a full fledged information system, the ERP or the CRM poses the challenge of being compatible with the external mobile and location technologies which will play a significant role in the operations of the company (Benjamin and Wigand, 1995).

One way of working out the effectiveness of the current state of the CRM or ERP systems and their compatibility with the rest of the EC operations of PLogistics would be the use of the IT balanced score card and would effectively involve the financial, customer, internal business processes and the learning and growth in the sector of CRM (Payne, 2005). Another way would be to simply carry out a post implementation evaluation in this matter as soon as the EC system comes into operation so any possible bottlenecks can be remedied at the earliest opportunity.

Post Implementation Evaluation and Electronic Consumer Relationship Management

The next issue will be the obvious nuance of implementing such a system. Any convergence to such a technologically intensive setup requires trained staff and infrastructure. All this translates into the need for effective management as well as financial capital. Not many businesses have reported profits from “dot.com” or EC based operations simply due to the lack of the human and “bricks and mortar” touch. Many EC based businesses have started out profitably but have failed to do well in later stages of functionality (Clegg et al, 1997). In any case, not only would PLogistics have to manage user expectations effectively and more holistically (Clegg et al 1997), but would have to combine the three most necessary elements in the EC based business; that is, the product, the service and the process which will all need to be managed and perceived by the consumer base to have been managed appropriately to ensure that the PLogistics project is a success. This, of course, entails the need for effective CRM (Consumer Relationship Management).

At this point of implementation, it has to be noted that insufficient training for the staff and a lack of a proper pre-implementation evaluation can contribute to a resistance to change within the current consumer base as well the current business partners (Benjamin and Wigand, 1995). PLogistics needs to avoid the hazards of the dot com bubble and will have to base its operations heavily on easily accessible EC tool-based customer involvement, as well as initiating and inviting user involvement in its design process in order to maintain appropriate communication with the consumer base later on (Li, 2004).

The following model adopted from McLean and Delone (1992) could provide PLogistics with much help while assessing the post implementation effectiveness of Electronic CRM at its operational stage.

Figure 1: Delone &Mclean IS Success Model (1992)

Such an implementation would basically entail assessing whether there is effective information and communication flowing within the system. This would mean effective communication with both the parties on the P2P network is effectively in sync to bring about user satisfaction of the system (DeLoan and Mclean, 1992).

Since PLogistics will be making use of an effectively integrated CRM (customer relationship management) or ERP (Enterprise Resource Planning), the IS success system proposed by Delone and Mclean (1992,2002) (see above) can effectively and cost effectively allow the author, as an ecommerce consultant, evaluation of these systems. Under this model it will be important to view the systems quality of the proposed CRM system at PLogistics, which will effectively mark out the technical effectiveness of the implementation. For the purposes of PLogistics, this will involve determining technical shortcomings in the CRM or ERP systems being used by the same (Tameem and Wheeler, 2000).

The next concern would be the determination of information quality, mainly in terms of the semantic success of the implementation, basically involving an assessment of the effectiveness of information communication between the P2P users of the system (Lin, 2002). It will remain to be seen whether the system designed and implemented is capable of communicating the flow of information from one of the P2P users to the other without any technical hinderances, incompatibility of information or misunderstanding. The next stage would be to see whether the EC system in use by PLogistics is, in fact, usable for the purposes it was designed for and if so, to what extent would this be possible (Lin, 2002). For example, whether the P2P consumers in this case are able to access exact details of their parcels in terms of location and the time remaining in delivery. There would also be an assessment of how the internal CRM or ERP connects with the P2P model as well as the individual impact it has on user satisfaction and the people working with in the P2P system.

Conclusion

In conclusion, this essay has seen how the intricacies of implementing an EC model into PLogistics can be managed. It should be remembered that, like all goal based IS evaluations for logistic based businesses, it would be better to see the organisational impact of the EC implementation on PLogistics as a whole when the entire mechanics of the external and internal IS systems can come full circle to be a testament as to whether, and in fact, a positive organisational impact has been achieved, and that PLogistics is on the road to a profitable electronic commerce venture.

References

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