In-depth Reflection 2: e-Marketplaces

The second in-depth review will be concerning topic 2. How we understand IS (Information Systems) is varied and ever changing.

Considering that IS are all business functions and applications that carry out those designed functions, every business would have extensive IS in their operations. At work major amounts of resources are placed into IS, with entire department set up just to handle the workplace environment. From what I can recall, the IS we use everyday include the following list:

• Financial
• Processing
• Management
• Information
• Marketing
• Accounting
• Timing
• Development
• Support
• IT

All in effort to improve how that business process in actioned and controlled. All of these tasks are performed in effort to increase their efficiency and effectiveness. The team at work that endeavours to find better ways of performing the same system is called “Six Sigma”. Through a tool that they call “Lean events” the team breaks each process down and scrutinises every action that occurs throughout the whole process. IS are the tools that allow are reviewed but at the same time are the tools that allow for the improvement to take place.

Papazoglou & Ribbers (2006) states the manner in which e-Commerce relates to e-Marketplaces is that the text describes three main functions:

1. Its acts as an exchange for business transactions.
2. Manage content converting all information into a common format.
3. Providing support services such as payment, tax etc.

A program in the business I work for provides its business customers with an online portal site that includes all three of these parameters. It brings the business customers together with the financial providers (us) to a common place where financial transactions can occur. All information input by the customer is in alignment with what we expect from them. In return our information we provide is in alignment with what the customer expects as well. Lastly it is a place where customers can pay the principle, interest, fees and charges associated with their finance and products.

This portal is an interface that links to customer and business together. Effectively the provider of funds provides the necessary information and method of execution for the buyer to manage and pay the business online. Thus completes the transaction cycle.

Hardy, C. Dyki, M. (2006) provides the advantages of e-Marketplace in six major areas:

1. Personalisation of products, information allows easy adaptation for individual customers and buyers.
2. Informational goods such as images, news and music are easily distributed.
3. Searching for goods and information on features is simpler.
4. Multiple transaction mechanisms such as auctions, exchanges etc.
5. Pricing models can differ.
6. Facilitation is increased as information is shared more easily.

Electronic auctions or how most people online would say for example “e-Bay” has become one of the defining websites in the Internet’s short history. C2C on such a grand scale was not possible without the Internet, as the items sold on e-Bay are such of a small, insignificant nature; odd or rare that finding a suitable buyer was impossible. I think that also for e-Bay to become such a hit that businesses becoming e-Tailers

In relation to how the new form of marketplace affects the other mainstream types, e-marketplaces see that since there is not physical presence, there are none of the capital costs of being physical. Too true is that since a business may be accessible to anyone on the planet with Internet connection. Thus businesses that fully utilise the power of the Internet can thrive beyond imagination.

The brand name “Google” has become the most valuable brand name on the planet with a dollar value of $115 Billion. That’s more than General Electric, Coca-Cola, McDonalds, Microsoft, Citibank, Royal Dutch Shell or British Petroleum etc.

So due to this power that the new form of marketplace has globally, businesses are racing to integrate it into their overall business strategies. Combining a real world presence with the virtual world market (e-tailing) should give that business every opportunity in the World to succeed. Although the Internet is simply a tool, “not the means to an end.”

e-Business Guide gives an overview of what and why e-Marketplaces offer can enhance a business:

1. Greater opportunities for suppliers and buyers to make new trading partnerships, either within their supply-chain or across supply-chains
2. The potential to lower the costs of negotiating and making transactions with automation of standard business procedures
3. The potential for more transparent pricing as buyers and sellers take the opportunity to trade in a more open environment
4. The opportunity to access value-added services such as inventory control and management of dispatch and distribution processes using electronic systems
5. The potential to access global markets.
Interestingly the Virtual Value Chain and how it effectively shrinks when businesses implement online sales methods, I found Rayport & Sviokla (1995) description and clarification of how this occurs easy to understand.

Compared to a regular physical supply chain, a virtual marketplace is defined by three characteristics:

1. The content or what is exactly offered - E-Tailing enables not only physical goods to be sold, but also non-physical items such as information. Online, I can purchase not only clothing etc, but also the information needed to say what is in fashion and what is not.

2. The context or how those things are offered – Personalised services, 24/7 sales fronts, international access etc. Online, there are business shirt companies who now offer “click to make” shirts of the highest quality with your specifications.

3. The infrastructure or what enables the transaction to occur – In the case of the Internet, modems, data cables, phone lines, PC’s, servers etc. This replaces obviously buildings, power, staff and stock.

In summing up the significance of why e-Marketplaces are at the forefront of development in today’s businesses, I have sourced a portion of an e-Commerce conference that was held in Slovenia to discuss the role of the new era marketplace:

“Markets and marketplaces have been a foundation for societies since ancient times. The Ancient Greek economy was based on the trading of olives and was both a vertical and international market. Later, medieval trade in parts of Europe was based around marketplaces, which formed a network of urban communities. Some markets had a strong community base, such as the burghers (merchants) of Turku in Finland who banded together to lower transaction costs in their trade with foreign towns (Kallioinen, 2002). In this respect, the structure of markets has been a determinant of success and continues into today's electronic world.”

Reference List:

• Turban, E. King, D. Viehland, D & Lee, J. 2008. Electronic Commerce: A Managerial Perspective 2008, Pearson Education, USA.

• Hardy, C. Dyki, M. 2006. Charles Sturt University MGT220 e-Commerce Study Guide.

• E-Business Guide:

http://www.e-businessguide.gov.au/improving/e-marketplaces

• 16th Bled e-Commerce Conference on e-transformation. 2003. Slovenia. The Role and Significance of the Electronic Market Maker:

http://209.85.141.104/search?q=cache:BM24v95vxYgJ:domino.fov.uni-mb.si/proceedings.nsf/0/6105fa00cd18b1e6c1256ea2002f7ca1/%24FILE/71Standi.pdf+significance+of+e-marketplaces&hl=en&ct=clnk&cd=1&gl=au