We are witnessing a great transformation in business models and services and Information technology is driving these new changes. While the benefits of enterprise software products in enhancing CRM, BI, KM and the overall optimization of business processes cannot be over emphasized, there are also considerable risks that could undermine the business value of the organization. Though information technology definitely carries great promise in optimizing performance and improving organizational efficiency, it is equally important that organizations do not ignore the potential downsides in the form of hackers and the consequent loss or manipulation of data. Compromising customer privacy would totally undermine businesses. A balanced and security centered approach is called for.
Information technology has invaded every sector of our lives and organizations are now increasingly depending on application software to manage every aspect of their businesses. Enterprise software market is growing significantly with the figures estimated by Gartner group suggesting revenue of up to $267bn in 2011 which is further slated to increase to $288bn in 2012. [Woodburn, 2011] However, research by the same Gartner group also suggested in 2006 that 50% of all CRM implementations resulted in failures. [Almotairi, 2009] Corporations are now using enterprise applications for CRM, BI, KM and human resource management functions. The phenomenal growth of web 2.0 services has in fact propelled organizations to adapt to new business models and has transformed the functional approaches to managing core business processes. For instance today’s organizations are focusing on a collaborative platform for sharing information in order to optimize business intelligence for making strategic decisions. Enterprise CRM applications also make use of the didactic web2.0 platform for providing targeted marketing and customer focused business policies. While enterprise software applications have now become an integral part of the business processes and contribute to improved functionalities and profitability it cannot be ignored that they could also undermine the organizational performance if they are not properly managed. This short essay discusses both the positive as well as the negative aspects with examples that underscore the positive potential as well as the downside of IT applications for managing corporate functions.
2. Enterprise Applications (Business Intelligence and Optimization)
Optimizing business performance is the main goal of enterprise applications. With the current growth in Web 2.0 services, it is possible for organizations to literally take their business intelligence and CRM functions to another level. The following two examples help to highlight how businesses can benefit immensely by using information technology and by adapting to emerging trends. One such approach which is currently redefining the Business intelligence function is the evolving trend of ‘Crowdsourcing’. Recently, BMW, the automobile giant from Germany, adopted crowdsourcing successfully. The company received more than 4000 design inputs via its ‘Virtual innovation Agency’ in a time frame of less than seven days. [Dunning, 2011]. Another astounding business story based on crowdsourcing is the success of Threadless.com. Using Crowdsourcing as its ERP tool, this company grossed an annual sales figure of $18 million in 2006 with only 20 people on its staff roll. Nickell and Jacob DeHart, the two founders of the company crowdsourced their garment designs by inviting people who visited their website to submit their designs and upload them online. These designs were voted upon and garments made out of successful designs. Successful designers were rewarded with $1500 along with $500 worth of garments. This is a case in point for both successful Business Intelligence as well as excellent CRM practice. [Brabham, 2008]
3. Electronic Data storage (Knowledge Management- Risks and Security Implications)
Today’s organizations are spread globally and sharing of information becomes vital. Particularly, the healthcare sector is one where timely information exchange critical. The deployment of electronic medical records and computerized physician entry system are in fact revolutionizing the standards of medical care. In the UK, the NHS initiative to setup EMR’s was done with the focus of providing vital ‘health information exchange’ between health care organizations. EMR’s we also designed to avert costly medical errors and provide fast information exchange with different healthcare settings which would be critical during medical emergencies. However, the downside of the EMR is the risk of patient’s privacy. Effective knowledge management is critical. Only recently the NHS medical records database was penetrated by hackers. In an email to the organization the hackers stated, ‘While you aren’t considered an enemy – your work is of course brilliant – we did stumble upon several of your admin passwords.'[Peev, 2011] These hackers were the same group which recently broke into the Sony Playstation database that exposed the customer records and the sensitive credit card information of millions(77 million)of people. [Quinn, Apr 2011]
Another well known instance of security breach and privacy risk in the electronic medical records system was the hacking of the Virginia government’s Prescription Monitoring program website. In this particular hacking episode, the hacker was able to access 8.3 million patient records and destroyed the backup copies and demanded a ransom of $10 million for the stolen data. These instances clearly highlight the dangers involved in storing sensitive personal information in computer records and the risk to health consumer privacy. While EMR’s save millions of pounds due to paper costs and improve quality of healthcare, they also create new security risks.
Many CRM projects have also backfired and the most prominent of these is the recent case between EDS and BSkyB (UK based broadcaster). Implementation delays and failures in the proposed CRM solutions cost EDS a whooping £318 million in settlement to BSkyB. [Krigsman, 2011] So the integration of process, people and technology has to be carefully managed to avoid costly failures that could destroy the business.
We are witnessing a great transformation in business models and services and Information technology is driving these new changes. While the benefits of enterprise software products in enhancing the CRM, BI, KM and the overall optimization of business processes cannot be over emphasized, there are also considerable risks that could undermine the business value of the organization. While Web 2.0 based services provide opportunities for delivering better customer care and retention strategies, customized and targeted marketing capabilities and improved Knowledge sharing and business intelligence solutions, they also increase the vulnerabilities of the organization and risk the privacy of its customers. Though information technology definitely carries great promise in optimizing performance and improving organizational efficiency, it is equally important that organizations do not ignore the potential downsides in the form of hackers and the consequent loss or manipulation of data. Compromising customer privacy would totally undermine businesses. A balanced and security centered approach is called for.
1) Doug Woodburn (2011), Enterprise Software Market in Sound Shape, Viewed Sep 10th 2011, < http://www.channelweb.co.uk/crn-uk/news/2080401/enterprise-software-market-sound-shape>
2) Mohammad Almotairi, 2009, ‘A Framework for Successful CRM implementation’, European and Mediterranean Conference on Information Systems, Viewed Sep 10th 2011, <http://www.iseing.org/emcis/CDROM%20Proceedings%20Refereed%20Papers/Proceedings/Presenting%20Papers/C31/C31.pdf>
3) Darren C Brabham 2008, Crowdsourcing as a model for problem Solving. The International Journal of Research into Media Technologies, Vol 14(1): 75-90 http://www.clickadvisor.com/downloads/Brabham_Crowdsourcing_Problem_Solving.pdf
4) Alistair Dunning, July 2011, Is Crowdsourcing dumbing down research? , viewed Sep 10th 2011, <http://www.guardian.co.uk/higher-education-network/2011/jul/29/crowdsourcing-funding-research-expertise>
5) NIST, (May 2009). FBI probes Hacker’s $10 Million ransom for stolen Virginia medical records. Viewed Sep 11th 2011, < http://www.nist.org/news.php?extend.270>
6) Gerri Peev, 2011, Fears over Patient Data as NHS computers are Hacked into by Pirate Ninjas, Viewed Sep 11th 2011, <http://www.dailymail.co.uk/news/article-2001816/NHS-computers-hacked-Fears-patient-data.html>
7) Ben Quinn & Charles Arthur, (Apr 26th 2011)’ PlayStation Network Hackers Access data of 77 million Users’, Viewed Sep 11th 2011, <http://www.guardian.co.uk/technology/2011/apr/26/playstation-network-hackers-data>
8) Michael Krigsman, 2011, EDS to pay 460 Million over CRM Failure, Viewed Sep 12th 2011, <http://www.zdnet.com/blog/projectfailures/eds-to-pay-460-million-over-crm-failure/9870>