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Technological Innovation in E-Commerce Management Research Paper

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Introduction

Management of any type of innovation in an organization is important because it ensures that the organization reaps the maximum possible benefits from the innovation. Such management involves careful consideration of the positive as well as the negative aspects of the innovation, in consideration of the particular needs or desires. Technological innovations are diverse and meant to counter various technological challenges and/or attain certain advantages or benefits that never existed.

Adoption of technological innovation in an organization requires careful consideration and analysis because technology and the systems involved are itself complex in nature and application. Implementation or adoption of these innovations depends on the current technological level of the organization in question and an upgrade and/or replacement is not only necessary to ensure that a particular problem is solved or certain benefits gained, but also to ensure linkages with other components and establishments such as the supplier network and the customer.

Importance of Technology in the Organizations

Modern organizations are finding the importance of technology in linking with customers, other organizations, and supplier channels not only to realize more sales but also to achieve quicker, easier and cheaper operations. The modern customer also has realized the importance of using technology to acquire commodities and services with improved speed, convenience, cheaply, easily, and with a taste of prestige and comfort. For example, technology in the airline industry has been used to link the customer with the airline companies to distribute services such as online booking and check-in services, which can be done with more speed following the possibility of eliminating the travel agent in the supply chain. The customer is able to acquire these services with comfort at home and spend lesser time queuing at the airport.

E-commerce is carrying out business through the internet. This operation is a very common marketing strategy among firms today. Although the implementation of this innovation has exposed even local companies to compete in their local markets because it gives companies an advantage of coverage all over, it has presented an opportunity to firms to not only cut costs of operations but also compete for customers by offering attractive technology that incorporates comfort and prestige. E-commerce also covers issues of internet researching, advertising, data sharing over the internet, and offering customer services (Hamill & Gregory, 1997; Web & Sayer, 1998 e.t.c.; qtd. in Bharadwaj et al., 2007).

Management of e-commerce is important to ensure that as many aforementioned aspects of it are covered by a certain innovation as possible to eliminate or reduce the likelihood of incurring additional costs in the future while setting more systems to perform certain additional operations or during upgrading. Management of innovations in e-commerce is important to ensure that management understands the various handles that could hinder the implementation of the innovations at the various stages of innovations. Security and costs were found to be the greatest handles to adopting e-commerce among the small businesses in a research study conducted by Riemenschneider and McKinney (2001-2002 qtd. in Bharadwaj et al., 2007).

In addition, four barriers to the evolution of e-commerce were identified according to Veeramani, and these included the accessible human resources, knowledge, financial resources and initiatives of the company, and technology and the development infrastructure for the business. Management of e-commerce is necessary to equip the managers with the necessary techniques and have them make the most prudent decisions while implementing the adoptions or the innovations. In fact, the company may be caught up in a managerial crisis on whether to adopt certain technology or not, which innovations best address its problems, and when to adopt the innovations, and this makes management of innovation an interesting subject.

The timing of innovation is important because it ensures that companies reap the maximum possible benefits either before or after other firms have taken advantage of the innovation. Companies according to theory do choose to adopt technology in innovation at various timing and the adopters can be grouped into early and late adopters. Early adopters are said to involve a lot of risks than the former because they adopt technology at early stages when or after it emerges (Lazear, 1990).

Early adopters may however reap the benefits of having a competitive advantage over late adopters. Early adopters may block entry for other firms into using a certain type of innovation by acquiring copyrights and rights of patents and continue to benefit from this innovation. Companies may move ahead and sell these rights and reap the associated benefits. An example is IBM which would acquire more than $ 1.5 billion of licensing fees from patents (Jones, 2000; Bennett, 2002). Managers therefore not only need to know the right time for entry into using certain innovations, but how much to reap from these innovations if they are early adopters, and/or when to avoid problems with protection for the usage of particular technologies.

Early adopters may reap profits before the innovation is adopted by other companies leading to increased competition hence deteriorated profits. Managers need to understand that competitors may be compelled by the existing tactics of introducing barriers to usage of innovations to bring certain changes to existing technology and this will mean that they might acquire certain competitive edge as a result of possible improvement of the current innovation. Managers must know therefore when and how to respond to changes and current needs.

Need for management of technological innovation

The resulting wave of technological innovations and the benefits they reap has not been free from dangers and problems. Issues of security of some technological innovations such as the internet payment innovations have come as a reality to even big corporations such as Heartland Payments and need no longer be ignored. In addition, implementation of technological innovations can be done at a considerably cheaper cost if careful management is done to ensure for example that the company makes a prudent decision on whether to replace the current innovation or upgrade, how to minimize labor cost with the best type of innovation, how to intertwine human and machine labor to achieve minimal cost, how best to deal with issues of maintenance of the innovations and how to acquire minimal-cost technological innovation.

Proper and efficient management of the technology in an organization requires understanding of the current technology being used in an organization. Various organizations are at various levels of technology. Managers need therefore understand the various levels of technological innovations and how best they can be implemented in their organizations. There are basically four stages of technology adoption in theory.

Understanding of the growing process of e-commerce and information system is essential for helping the organizations to plan and manage technology involved. There are four stages involved in the evolution of e-commerce, namely initial, centralized, looking inward for benefits and the global stage according to Chan & Swatman, (2004. Businesses which are establishing e-commerce systems begin to establish simple systems desired to meet certain objectives such as improve the performance of a department. In this stage, fewer technological issues on implementation and adoption may be encountered and the movement to the next stage would be after effectively managing the initial stage.

Centralized e-commerce stage is characterized by the expansion of implementation of e-commerce from the departmental level to the whole organization. The management of the e-commerce project will be done by the various departments, in collaboration while the operations will be centralized. Management should make sure that there is enough money and adequate sourcing of IT expertise and specialists. At this stage, the company may shift their focus from suppliers to customers and seek to achieve competitive advantage by linking with large customers rather than realizing mere technological advantages realized in the first stage.

Because of the requirement and need to link with outside systems, the company may realize technological issues such as compatibility and complexity problems. The management should be able to understand such technicalities and prepare to counter them in advance including making of important decisions relating to the adoption and implementation of the systems.

The next stage might involve the searching and looking on for better and successful opportunities offered by technological alternatives, following the challenges of implementation of the previous stages and the slow acceptability of the implemented systems by customers. The company may choose uniformly standardized systems and link with other supportive technologies to look for more benefits. The management decisions required in this stage involves the type of technological system to implement, the timing of the implementation among others. Global e-commerce stage would involve the implementation of newer and better technologies to achieve global relationships with customers, suppliers and other organizations.

Management of the stages of e-commerce is important because it will determine the success of the organization in these stages and the whole process. Even the internal systems of the organization will be issues that the management will consider because adoption of technology would help the company reduce human labor and realize faster processes. Decisions such as who and when to lay-off excessive employees, if and when to increase the employees, would be essential. Re-organization of firm’s resources in the adoption of the technology to achieve maximum benefit may present itself as a challenge.

Management and leadership influence adoption of e-commerce and the whole process because the type of leadership may influence the organizational human resources. It may for example invite or encourage other people to contribute towards adoption and implementation or discourage and dictate on what they should do. A good management and leadership should view the employees as an important resource for the organization to utilize.

Team-leaning and team work would be fostered if the management ensures that employees are involved in the process, while proper guidance and decisions in the process reduces the chances for resistance of adoption by members of the organization. The management should involve all levels and departments of the organization in decision making, and this will foster responsibility among the staff (Davidmann, n.d.).

Conclusion

Management of technological innovations in e-commerce is important in the making of choice of technology to implement and the decisions involved. Management will determine the success of the whole process. Managers need understand the stages of e-commerce evolution as well as the challenges and benefits of e-commerce adoption.

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