E-Business at Home Depot - Essay Example

RUNNING HEAD: E-BUSINESS AT HOME DEPOT E Business at Home Depot School E-Business at Home Depot Early Beginning and Overview The Home Depot started as a brick-and-mortar retail outlet (Luening, 2000) and was founded by Bernie Marcus and Arthur Blank in 1978 (Our history, n.d.). The first two outlets opened in Atlanta, Georgia the following year with Ken Langone (investment banker) and Pat Farrah (merchandiser expert) (Our history, n.d.). The stores, each at 60,000 square feet, looked “cavernous warehouses” with empty boxes that tower high on the shelves (Our history, n.d., para. 1). In congruence with its vision as a one-stop shop to customers with do-it-yourself concept, store associates were equipped with extensive product training to assist customers on how to do things themselves while clinics were also conducted (Our history, n.d.). It expanded later to Canada, Mexico, China, Puerto Rico, the U.S. Virgin Islands and the territory of Guam with unprecedented speed (Our history, n.d.) that total more than 2,200 retail outlets (Corporate, n.d.). It was listed in NASDAQ in 1981, New York Stock Exchange three years after (Our history, n.d.), and also traded at Dow Jones and Standard & Poor’s index (Corporate, n.d.). Its inventory of home improvement needs and materials consisted of around 40,000 and can order 250,000 products for customers (Stores, 2006). E-Business: Concept, Pros and Cons E-commerce encompasses the “buying, selling, transferring, or exchanging products, services, and/or information” through the computer and the internet (Turban et al., 2005, as cited in E-business, n.d. p. 3). E-business, a broader term that includes e-commerce, means purchase and sale of goods and services as well as “servicing customers, collaborating with business partners, conducting e-learning, and processing electronic transactions” (Turban et al., 2005, as cited in E-business, n.d. p. 3). E-commerce transactions are commonly conducted through the internet but may also be done over private interconnection (e.g. value-added networks, local area networks, wide area networks) (Turban et al., 2005, as cited in E-business, n.d. p. 3). The benefits of e-commerce include: a) online search allows consumers comparison for cheaper products, b) selection of more vendors and products, c) 24 hours-7 days a week shopping from any location, d) quick access to necessary detailed data, e) allows users to avail of custom-made products at lower prices, f) enables persons to make a living or earn a degree at home, g) allows electronic auctions that provides advantage to both vendors and buyers, and h) interact and communicate with other consumers for exchange of experiences and views (E-business Chapter 5, 2008). As a B2C (business-to-consumers) store, Home Depot is engaged in Electronic retailing or e-tailing (selling at “electronic storefronts or electronic malls” through catalog or auctions) in its own internet and E-commerce portal (Turban et al., 2005, as cited in E-business, n.d. p. 16). The limitations identified in using E-Business are hidden costs (the cost offered along with convenience in shopping is not apparent up-front), network failures (breakdown in interconnection affects the consumers and business, productivity and sales) and imposition of taxation (transaction beyond boundaries disable governments to charge sales tax on the purchase of goods and services and thus, reduce their revenue income) (Electronic business, 2008). The risks identified by Sammer (2000) in e-business transactions are: a) content risk (e.g. “trademark and copyright infringement, libel, defamation, and invasion of privacy”), b) breach of systems and security (e.g. “damage to systems; stolen information, including credit card data and trade secrets; Denial of Service (DoS) attacks, in which a site is overwhelmed by thousands of e-mail messages sent by hackers; and viruses”), and c) system errors and omissions (basically affecting establishments, e.g. “online trading firms” wherein system crashes can cause customer claims for pecuniary loss due to such crashes) (p. 1). Critical information (e.g. credit card numbers) can be stolen by breaking into the computer system; information transferred over the net can be hijacked (especially with broadband interconnectivity with continued connection), stolen data can be revealed to others, modified, sold or posted on the web; the website can be hijacked; system can be overloaded to prevent access by customers; production connections can be shut down; and rerouting of confidential company records (Protecting, n.d.). Home Depot Business Processes with E-Business The company used every available venue for information technology (IT) integration into its system. Top management need for regular communication with the employees shifted the use of television and analog system to a satellite system, and established a permanent work interaction between the television department and IT department (Patton, 2005). With the company’s expansion, the use of IT assured customer and vendor satisfaction as well as updating proper stocks on hand (Home Depot builds, 2004). It continually ventures on different systems, such as the shift from the “traditional client/server systems to a dynamic, three-tier application server architecture,” through DataDirect Technologies that would allow efficient access to data and combining of solutions (Home Depot builds, 2004, p. 1). Home Depot started selling its products through the internet to Las Vegas consumers in 2000 (Luening, 2000). Integration of e-commerce strategy expanded its retail capability and customer service but has to compete with existing online stores (e.g. Amazon.com) (Luening, 2000). The online store provides a list of products according to profession (e.g. plumbing, electrical), updated pricing, and payment by credit card (Luening, 2000). Shopping can be done by keyword search, by brand or “SKU (stock keeping unit)” (Luening, 2000, para. 8). The IT tools used by Home Depot include “sophisticated forecasting and scheduling systems to mobile order carts, from radios and call boxes to a ‘Special Services’ system on steroids, from integrated merchandizing to centralized inventory management” all geared towards enhanced customer satisfaction, Harry Taylor said (operations senior vice-president, Home Depot Canada Inc.) (Menezes, 2007, p. 1). Citing an example of convenient pacing using web-based training for certified garden consultant (16 hours), a person need not sit in front of the computer continuously for two days but may be made at two-hour sessions for eight days with remarkable outcome, Taylor added (Menezes, 2007). E-training, he continued, allows consistent content among the outlets as well as lesser trainers enabling savings which are funneled back to the floor for better service (Menezes, 2007). According to Taylor, with tools forecasting sales and transactions, the time required to provide a certain level of service can be projected while mobile order carts (provide inventory data and stocks needed) and wireless technologies enhanced production and customer service (Menezes, 2007). Conclusion The risks and some limitations can be halted by introducing applications that would disable attack on the security of the system. Time is of the essence here. The hackers and hijackers seem to develop newer systems as soon as security and protection applications are created to protect e-business transactions. However, the problem on taxation may or may not be remedied depending on the effort exerted by the government to track transactions over the internet. In the end, e-business offers more benefit to global transaction and exchange, thus, whatever risk and limitation exist, the only solution is to devise means to overcome them. References Corporate and financial overview. (n.d.). Retrieved June 3, 2009, from http://corporate.homedepot.com/en_US/Corporate/Public_Relations/Online_Press_Kit/Docs/Corp_Financial_Overview.pdf Electronic business (E-business). (2008, October 16). Scribd. Retrieved June 6, 2009, from http://www.scribd.com/doc/6946808/EBUSINESS E-business and E-commerce. (2008, October 17). Chapter 5. Part II The Web Revolution. Scribd. Retrieved June 2, 2009, from http://www.scribd.com/doc/7047226/MIS-Chapter-05-EBusiness-and-ECommerce E-business and E-commerce. (n.d.). Retrieved June 2, 2009, from http://www.business.ulster.ac.uk/intlbusiness/courses/bmg814m1/E-Business.ppt Home Depot builds customer satisfaction with DataDirect SequeLink. (2004). DataDirectTechnologies. Retrieved June 4, 2009, from http://www.datadirect.com/company/customers/docs/homedepot.pdf Luening, E. (2000, August 30). Home Depot lays its e-commerce foundation. CNET News. Retrieved June 2, 2009, from http://news.cnet.com/Home-Depot-lays-its-e-commerce-foundation/2100-1017_3-245130.html Menezes , J.P. (2007, June 14). Home Depot Canada’s ‘customer-centric’ tech transformation. IT World Canada. Retrieved June 5, 2009, from http://www.itworldcanada.com/a/Daily-News/0db313ec-49f3-475d-b0ca-5bb9cf877ee9.html Our history. (n.d.). Retrieved June 5, 2009, from http://corporate.homedepot.com/wps/portal/History Patton, C. (2005, November 1). Home Depot: Communicating with employees while maintaining corporate culture. Satellite Business Solutions. Retrieved June 3, 2009, from http://www.satellitetoday.com/sbs/casestudy/HOME-DEPOT-Communicating-With-Employees-While-Maintaining-Corporate-Culture_5324.html Protecting - Where do I start? - What part of my business is at risk? (n.d.). e-businessguide. Retrieved June 6 2009, from http://www.e-businessguide.gov.au/protecting/start/risk Sammer, J. (2000, September 1). To protect and defend E-business. BusinessFinance. Best Practices For Finance Executives. Retrieved June 6 2009, from http://businessfinancemag.com/article/protect-and-defend-e-business-0901 Stores, products and services. (n.d.). Retrieved June 3, 2009, from http://corporate.homedepot.com/wps/portal/Our_Stores Read More