Internet for businesses:

Boon or bane?

Umeshka RATNAWEERA

The internet's supremacy on business has long been acknowledged. But many organisations are still struggling to engage with existing and prospective customers on the web, reward loyalty or drive out negative online narratives about their products or services.

However, technology that genuinely improves efficiency and cuts costs has always been desirable for businesses and the recent economic climate has made it downright essential in many cases.

Internet, like any other innovation provides both opportunities and challenges to its users.

A very simple initial step to make use of internet to do business is setting up a web page about the firm's products and services and thus connecting it to potential customers all over the world.

A step beyond that would take the firm to engage in e- commerce where it will have the potential to access new customers and markets.

One major benefit to opening an online business is the speed in which you can open your doors to the world. Unlike the traditional way, one can set up a business almost instantly as it can provide a platform for doing business via internet marketing and online trading.

However, choosing a great server right from the start is essential. It is the business salvation. It can also be very difficult to change servers once you have become established, so it's vital to select carefully from the beginning and spend whatever is necessary to get the service you need.

If it breaks down, everything regarding the business can be brought to a standstill. If this is recurring and the firm does not satisfy its customers, a competitor will surely do.

Online marketing is a very dynamic, fast changing field, and there are many advantages and challenges to marketing on the internet.

Other than having a 'grand' server, a firm making use of internet as a network connection to do business have to learn to find and maintain customers on the web and marketing strategies that are uniquely reserved for online business.

As there are an increasing number of firms entering into online business it has become ever harder to remain competitive. In such circumstances a firm is continuously challenged to remain stable let alone grow and prosper.

If a firm uses certain plans and tactics to make the business stand out in various search engines, it will have a competitive advantage in attracting potential customers. Only with search engine marketing, can a business promote its products or services directly to people who are actively searching for it.

Improved communication is an evident advantage which brings opportunities to business development. Businesses use e-mail, video conferencing, podcasts, wikis, blogs and even social networks such as Facebook, Twitter, Myspace can have a great impact on business.

RSS feeds (Really Simple Syndication) are also useful to follow the latest news from many sources. Through RSS, one can be automatically notified as soon as updates are made.

IBM is one of the many firms who have made use of online collaboration tools in their day to today business. IBM has an online "Blue Pages"; a directory of all the employees worldwide, including each person's e mail address, mobile number and biography.

Instant massaging software is also effective to stay in contact with people regardless of place and time. If not for the use of internet collaboration technology would have been limited to phone calls and face to face meetings.

Virtual organizations and home working is also another development brought about by internet usage. The creation of broadband telephony and growth of video conferencing and other online communication tools have provided a huge boost to cooperation among geographically dispersed teams.

A leading service and outsourcing company, Serco Consulting which has offices throughout Europe, Asia pacific and Middle East uses special collaboration software that combines video conferencing with a "digital whiteboard" to allow people to work on the same document simultaneously.

These time saving opportunities which are surfaced for businesses are due to advancement made possible using internet facility.

Another opportunity which is brought about by using internet facility is enhanced relationships with business partners and improvements in the supply chain. For example e-procurement can make a firm's purchasing function more effective and efficient.

Such a system can reduce transaction costs by stripping out processes and by reducing the possibility of errors. If all purchasing are done through contracted suppliers at contracted rates and by offering users a narrow supply base, the organization should reap the benefits of volume discounting. Traditionally, administrating supplier catalogue is a job for the purchasing team.

However e-procurement makes it the supplier's responsibility to ensure that its catalogue is current.

It can also force suppliers to display only the range of items required by the buyer and can stipulate lead times for delivery, thus getting the right goods at the right time.

The use of online survey, market research and the ability to access competitor's information and intelligence are also benefits which can be derived from internet usage.

Internet has the competence to connect us all and at all times and is an information rich resource. It has been able to change the way organizations collect, construct and transmit competitive intelligence.

An organization is able to build up a customer data base and gain knowledge of needs and expectations, trends of purchasing behaviour over time through the data entered when entering the organization's site.

This can lead to enhanced e-CRM (customer relationship management). For example when certain types of books are purchased thorough Amazon, the customer will get alerts of new books of similar topics and interests. Improved customer relationships will lead to sustainable long term growth.

Online contract tendering also brings updated opportunities for firms who can make use of such opportunities to derive benefits. Out sourcing as well as off shoring has become easy to control due to the speedy connectivity which the internet provides.

A firm can be doing business around the clock 24/7 when its employees are geographically dispersed as the time zone differences make no problem.

Many entrepreneurial thoughts and even fantasies have come to reality due to the potential capability of the many uses of the internet. Risk averse entrepreneurs who think, not only out of the box but also out of the planet explodes their ideas using internet where they can connect with millions of people all around the globe.

For example virtual worlds such as second life does business with a unique idea and so are some of the websites where one can leave messages, videos and personal document to be viewed by loved ones once you are dead and gone.

These may not seem essential at the moment as much as the television and mobile when they first appeared but as they are here to stay it's doubtful if it would take much long to be an essential part of our lives. As much as there are endless opportunities as a result of internet connectivity, many challenges are also faced by businesses. Although home working which has been possible due to internet connectivity and its advancements is flexible, it is not completely without challenges.

When employees are not physically present the most important thing is trust. Ensuring that knowledge is shared throughout the team also must be worked out in a virtual team, whereas that happens naturally in a traditional office environment.

The useful internet communities where firms can obtain useful feedback about their products and services can also make a negative impression on the firm's products.

Internet brings the opportunity to surface a media channel to voice out opinions and feedback whether it is positive or negative.

Some may see web communication as a problem. The fact is that it's easier than ever for anyone to compare prices, write negative review or post a complain on a chat forum exposes them to a new level of reputation risk and demands for better products, improved service and lower prices.

During the early days of the internet "astroturfing" was a common practice where marketeers faked by pretending to be consumers and posting favourable comments on weblogs.

When Sony launched the Play station portable it created a blog site called "All I want for Christmas is a PSP" but was discovered and was forced to stop its campaign.

On the other hand DB apparel used its internet communities to get feedback through questionnaires about its new products and as it has given positive results the firm hopes to encourage further interaction by sending e-mail alerts and already uses incentives to attract online customers through 'register and win' promotions.

This example shows that internet can bring opportunities as well challenges and problems according to the way it is used by different businesses. This is where etiquette in the net; netiquette can play a major role in the turning challenges to opportunities.

High costs that have to be invested on the road to acquiring opportunities brought about by the internet is another challenge which businesses face. This is the case of many a small businesses that often do not have the time or resources to dedicate to creating a website nor use costly softwares.

However there are many free business softwares such as Google Apps, GNUCash, GNULedger and also free web site builders available online.

Another confrontation that internet brings is that most consumers don't completely trust web companies and shy away from offering information about them.

This is evident in the various testimonials, privacy policies and information securities such web companies provide in order to build up trust.

For example Bank of America uses encryption technology, such as Secure Socket Layer (SSL), to prevent unauthorized access to data and to ensure information security and to safeguard privacy.

As there is no physical involvement of humans directly in the eyes of the customers who engage themselves in e-shopping, soft factors such as courtesy, cleanliness, friendliness, helpfulness, care, and commitment may be lacking.

Even though internet brings opportunities to businesses, some businesses can be negatively impacted by the Internet. For instance printed newspapers are more expensive to produce than online news and internet is slowly taking over the news industry. Another instance where internet has brought not only a challenge but also a threat is the entertainment and leisure industry.

Several sites make available full-length television shows and music and movies are readily available online for free. The presence of e-books and audio books can render printed books completely obsolete in the near future.

Local travel agencies who traditionally carried out their business with tangible offices now have converted themselves to do all office work using the internet facility in order to keep their heads above water. Even educational institutions now have separate traditional class room courses as well as distance learning facility for its students.

The array of facilities brought by the internet has given businesses the confidence to making better and timely decisions.

But all the same, firms should be cautioned not to become more uncertain and stressed out from the gigantic data, information and internet lead applications of the web but to pay attention to the success variables and focus on them to build up the business so that decision makers in businesses are not preoccupied in the digital world that they never look up from their screens to see what's happening in the non digital world.