Measuring and Improving Performance of E-Business
Measuring and improving performance of e-business: –
Since a decade, the Internet activity has been bolstered with e-commerce that trades in products and services via computer networks such as Internet. Online commerce has seen various growth rates in different countries like France, Germany and UK predicts that above 15% of their total retail sales will be from e-commerce in 2015. Developing countries like India and China expect a modest 2 to 4% of total retail sales from e-commerce in 2015(The Economist, 2013). The trend in e-commerce has seen shutting of many stores and shops in Europe. For example, Jessops, Comet and other bookstore sellers have vanished from the Britain retail industry failing to compete with e-commerce giant Amazon. Watching this trend in online shopping in many developed and developing countries, it is tempting to conclude that shops are to shopping, what typewriters are to typing. In other words, e-commerce has resulted in a virtual market place and ability to deal with huge customer base with wide variety of tastes and preferences, thus reducing the demand of the retail stores. This also means that e-commerce businesses will be dealing with tastes and preferences that are volatile and requires them to adapt quickly to the changes. The industry as a whole is very competitive as the entry and exit costs are low and a potential for high profitability and fewer threat of substitutes.
Intense threat to competition creates an imperative for the e-business to have constant checks on business by measuring the performance of the business and improving in retrospective. Management and measurement go hand in hand, a common doctrine in management world is “things that cannot be measured cannot be managed. E-businesses should have performance metrics like many organizations to track progress against a desired business outcome. These metrics should concentrate on wide range of issues like customer satisfaction, delivery timeliness, quality, IT infrastructure, Marketing and promotional techniques and improved web analytics to analyze the consumer demand. Since the e-business requires extensive marketing and promotion techniques, customer retention strategies and huge investment in synergizing special offers and discount coupons etc. Metrics serves as useful device in providing guidance to adhere with stated objectives and measuring their performance in relation to achieving them. For instance, if an e-business objective is to increase customer base rapidly, establishing a metric of traffic volume such as number of visitors in the site can help them measure their performance as per their objective, however an e-business will have many objectives regarding customer retention, brand loyalty and other factors that bolsters growth in their business. Business metrics also motivate the management preparing them to take greater challenges. Metrics also provide quantitative date