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Digital Business and E-Commerce

Management
Seventh Edition

Part 1
Introduction

Chapter 1
Introduction to digital business

Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
Learning outcomes
• Define the meaning and scope of digital
business and the difference between
digital business and e-commerce.
• Summarise the main reasons for
becoming a digital business and barriers
that may restrict it.
• Outline the ongoing business challenges
of managing digital business in an
organisation, particularly tech start-ups.

• How do we explain the scope and

implications of digital business to staff?
• What is the full range of benefits of
introducing digital business and what are
the risks?
• How do we evaluate our current digital
capabilities?

Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
Introduction
The ‘Internet’ refers to the physical network that links
computers across the globe. It consists of the infrastructure
of network servers and wired and wireless communication
links between them that are used to hold and transport data
between the client devices and web servers.

World Wide Web (WWW): The most common technique for

publishing information on the Internet. It is accessed through
desktop or mobile web browsers that display interactive web
pages of embedded graphics and HTML/XML-encoded text.

Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
Mobile communications: Digital business processes and
communications conducted using mobile devices such as
laptops, tablets, mobile phones (including fixed access
platforms) and ubiquitous devices with different forms of wireless
connection, including services on wifi, 3G, 4G, 5G and satellite.

Disruptive digital technologies: Technologies that offer

opportunities for business for new products and services for
buyers, suppliers, partners and customers and can transform
business processes. Danneels (2004) defined disruptive
technologies as ‘a technology that changes the bases of
competition by changing the performance metrics along which
firms compete. Customer needs drive customers to seek certain
benefits in the products they use and form the basis for customer
choices between competing products.’ (There isn’t a better
definition and this remains the most widely cited definition.)

Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
Digital business innovation and
opportunity
• Since Google was launched in 1998,
which digital start-ups have transformed
the way we work, live and play?
• How has Google innovated in search
and its business model?
• See Table 1.1 for some of the major
innovators

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The impact of digital communications
on traditional businesses

• Impact and time a business takes to react

varies by industry sector
• Andy Grove, Chairman of Intel, one of the
early adopters of digital business, noted
that every organisation needs to ask
whether, for them:
“The Internet is a typhoon force, a ten times
force, or is it a bit of wind? Or is it a force that
fundamentally alters our business?”
(Grove, 1996)

Stolterman and Forse describe digital transformation as the

changes that occur in any part of human society through
the application of digital technology. Digital transformation
in business occurs when there are significant changes to
organisational processes, structures and systems,
implemented to improve organisational performance
through increasing the application of digital technology.

Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
New communications approaches
and consumer behaviour
• Inbound marketing
‒ The consumer is proactive in actively seeking
out information for their needs, and interactions
with brands are attracted through content,
search and social media marketing
• Zero Moment of Truth (ZMOT, Figure 1.2)
‒ A summary of today’s multichannel consumer
decision-making for product purchase where
they search, review ratings, styles, prices and
comments on social media before visiting a
retailer

Source: Google, Lecinski (2012).

Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
New communications approaches
and consumer behaviour (Continued)
• Search marketing, content marketing and social media
marketing can be used to target prospects with a defined
need – they are proactive and self-selecting.

• Search Marketing: Companies seek to improve their

visibility in search engines for relevant search terms by
increasing their presence in the search engine results
pages.

Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
New communications approaches
and consumer behaviour (Continued)
• Content marketing
‒ …the marketing and business process for
creating and distributing relevant and valuable
content to attract, acquire, and engage a
clearly defined and understood target audience
– with the objective of driving profitable
customer action (Pulizzi, 2012)

Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
Social Media Marketing
 Social media: A category of media focusing on participation and
peer-to-peer communication between individuals, with platforms
providing the capability to develop user-generated content (UGC)
and to exchange messages and comments between different
users.
 Social media marketing: Monitoring and facilitating customer–
customer interaction and participation throughout the web to
encourage positive engagement with a company and its brands.
Interactions may occur on a company site, social networks and
other third-party sites.
 Social network sites (SNS): A site that facilitates peer-to-peer
communication within a group or between individuals through
providing facilities to develop user-generated content (UGC) and
to exchange messages and comments between different users.

Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
Social Media Marketing (cont.)
 Really Simple Syndication (RSS) feeds: Blog, news or
other content is published by an XML standard and
syndicated for other sites or read by users in RSS reader
software services. Now typically shortened to ‘feed’, e.g.
news feed or sports feed.
 Blog: An online presence for content prepared by an
individual or a group of people.
 Rich media: Digital assets such as ads are not static
images, but provide animation, video, audio or interactivity
as a game or form to be completed.

1. Social networking.

2. Social knowledge.

3. Social sharing.

4. Social news.

5. Social streaming.

6. Company user-generated content and community.

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Mobile Commerce and Mobile Business
 Mobile commerce refers to the online transactions and
communications conducted using mobile devices such
as smartphones and tablets, and typically with a wireless
connection.

 Mobile business refers to the business models employed

by organisations that exploit the technology surrounding
such mobile devices and allow employees and
stakeholders to benefit from the ability to be freed from a
fixed location.

• Mobile app: A software application that is designed for

use on a mobile phone, typically downloaded from an
app store. iPhone and Android apps are best known, but
all smartphones support the use of apps, which can
provide users with information, entertainment or location-
based services such as mapping.

Kalakota and Whinston (1997) refer to a range of different

perspectives for e-commerce:

1. A communications perspective – the delivery of information,

products or services or payment by electronic means.
2. A business process perspective – the application of technology
towards the automation of business transactions and workflows.
3. A service perspective – enabling cost cutting at the same time as
increasing the speed and quality of service delivery.
4. An online perspective – the buying and selling of products and
information online.

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Figure 1.2 The distinction between buy-side and sell-side e-commerce

 Buy-side e-commerce: E-commerce transactions

between a purchasing organization and its suppliers.

 Sell-side e-commerce: E-commerce transactions

between a supplier organization and its customers.

 Social media commerce: A subset of e-commerce that

encourages participation and interaction of customers in
rating, selecting, buying products and other social media
interactions. This participation can occur on an e-
commerce site or on third-party sites.

Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
The difference between digital
business and e-commerce
• Digital business
‒ The transformation of key business
processes through the use of digital
technologies
• E-commerce
‒ All digital (and electronic) mediated
transactions between an organisation and a
third party

Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
Electronic business
(e-business)
• All electronically mediated information exchanges,
both within an organization and with external
stakeholders supporting the range of business
processes.

• Information and communication technology (ICT

or IT): The software applications, computer hardware
and networks used to create e-business systems.

Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
Three definitions of the relationship between e-
commerce and e-business

1. Electronic commerce (EC) has some degree of

overlap with electronic business (EB).
2. Electronic commerce is broadly equivalent to
electronic business.
3. Electronic commerce is a subset of electronic
business.

• Intranet: A private network within a single company

using Internet standards to enable employees to
access and share information using web publishing
technology.

• Extranet: A service provided through Internet and

web technology delivered by extending an intranet
beyond a company to customers, suppliers and
collaborators.

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Figure 1.4 The relationship between
intranets, extranets and the Internet

 Systems used inside organisations to enable real-time

collaboration between employees and other
stakeholders, such as customers and suppliers, to
support business processes such as customer services,
supply chain management and new product
development.
 Slack workspace tool.

Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
Different Types of Sell-Side e-
Commerce
1. Transactional e‐commerce site
2. Services‐oriented relationship‐building
website
3. Brand‐building site
4. Portal or media site
5. Social network sites (SNS)
‒ These aren’t mutually exclusive, but there is
usually a focus of each website
‒ Facebook, LinkedIn, Twitter.

Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
Digital Marketing
• Digital marketing involves:
‒ Applying technologies which create digital channels to market
 For example, Websites, search engines, email, social media sites and text
messaging

• To achieve these objectives

‒ Support marketing activities aimed at achieving profitable acquisition,
conversion and retention of customers within a multichannel buying process
and customer lifecycle
• By using these tactics
‒ Recognising the strategic importance of digital technologies and developing a
planned approach to reach and migrate customers to digital services through
digital and traditional communications
‒ Retention is achieved through improving our customer knowledge (of their
profiles, behaviour, value and loyalty drivers), then delivering integrated,
targeted communications and digital services that match their personal needs

Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
Options for Organisations to Reach a
Digital Audience
1) Paid media: This is bought media where there is
investment to pay for visitors, reach or conversions
through search, display advertising networks or affiliate
marketing.
2) Earned media: Traditionally, earned media has been
the name given to publicity generated through PR
invested in targeting influencers to increase awareness
about a brand.
3) Owned media: This is media owned by the brand.
Online, this includes a company’s own websites, blogs,
email list, mobile apps or their social presence on
Facebook, Linkedin or Twitter.

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The three main options for online
media investment

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The Six Key Types of Digital Media
Channels
1. Search engine marketing.

2. Digital PR.

3. Digital partnerships.

4. Interactive advertising.

5. Opt-in email marketing.

6. Social media marketing.

Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
Digital Marketing (Cont.)
• SMS (Short Message Services): The formal name for text messaging.
• Multi-channel marketing: Customer communications and product distribution are
supported by a combination of digital and traditional channels at different points in
the buying cycle.
• Multi-channel marketing strategy: Defines how different marketing channels
• should integrate and support each other in terms of their proposition development
and communications based on their relative merits for the customer and the
company.
• Customer journey: A description of modern multi-channel buyer behaviour as
consumers use different media to select suppliers, make purchases and gain
customer support.
• Customer-centric marketing: An approach to marketing based on detailed
knowledge of customer behaviour within the target audience which seeks to fulfil
the individual needs and wants of customers.
• Customer insight: Knowledge about customers’ needs, characteristics,
preferences and behaviours based on analysis of qualitative and quantitative data.
Specific insights can be used to inform marketing tactics directed at groups of
customers with shared characteristics.

Source: Adapted from Spivack (2009)

Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
• Web 2.0 concept: A collection of web services that
facilitate interaction of web users with sites to create
usergenerated content and encourage behaviours
such as community or social network participation,
mashups, content rating, use of widgets and tagging.

• Web 3.0 concept: Next-generation web incorporating

high-speed connectivity, complex cross-community
interactions, full range of digital media (text, voice,
video) and an intelligent or semantic web where
automated applications can access data from different
online services to assist searchers perform complex
tasks of supplier selection.

• Supply chain management (SCM): The coordination of

all supply activities of an organization from its suppliers
and partners to its customers.
• Value chain: A model for analysis of how supply chain
activities can add value to products and services
delivered to the customer.
• Value network: The links between an organization and
its strategic and nonstrategic partners that form its
external value chain.

Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
Business or Consumer Models of e-
Commerce Transactions
• Business-to Consumer (B2C): Commercial
transactions between an organization and consumers.
• Business-to Business (B2B): Commercial
transactions between an organization and other
organizations (interorganizational marketing).
• Consumer-to Consumer (C2C): Informational or
financial transactions between consumers, but usually
mediated through a business site.
• Consumer-to business (C2B): Consumers approach
the business with an offer.

Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
Summary and examples of transaction
alternatives between businesses, consumers
and governmental organisations

Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
Dot Gov defined
The application of digital technologies to government and
public services for citizens and businesses. Dot Gov covers
a similar range of applications:

 Citizens – facilities for dissemination of information and

use of digital services at local and national levels.
 Suppliers – government departments have a vast
network of suppliers.
 Internal communications – this includes information
collection and dissemination and email and workflow
systems for improving efficiency within government
departments.

• Reach
‒ Billions of global consumers
‒ Millions of products
• Richness
‒ 100s of billions of pages indexed by search
engines
• Affiliation
‒ Links with partners

 Cost/efficiency drivers
1. Increasing speed with which supplies can be obtained.
2. Increasing speed with which goods can be dispatched.
3. Reduced sales and purchasing costs.
4. Reduced operating costs.
 Competitiveness drivers
5. Customer demand.
6. Improving the range and quality of services offered.
7. Avoiding losing market share to businesses already
using e-commerce.

Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
Evaluating an organization’s e-business
capabilities
 Stage models: Used to review how advanced a
company is in its use of information and communications
technology (ICT) to support different processes.

 Digital value proposition (DVP): A statement of the

benefits of digital services that reinforces the core
proposition and differentiates from an organisation’s non-
digital offering and those of competitors.

Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
A simple stage model for buy-side
and sell-side e-commerce

1. Content.

2. Customisation.

3. Community.

4. Convenience.

5. Choice.

6. Cost reduction.

Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
Risks in digital business
• Too many customers
• Hacking
• Privacy issues
• Goods/services not being delivered
when outside the control of the digital
business
• Communications not getting to the right
person in the organisation

Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
Digital Business and E-Commerce
Management
Seventh Edition

Part 1
Introduction

Chapter 3
Managing digital
business infrastructure

• The architecture of hardware, software, content and data

used to deliver digital business services to employees,
customers and partners.

• Why do non-technical people need to

know about technical jargon and
technology?

Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
Activity – Digital business
infrastructure risk assessment
• Make a list of the potential problems for
customers of a digital business
• You should consider problems faced by
users of digital business applications who
are both internal and external to the
organisation
• Base your answer on problems you have
experienced on a website or an app that
can be related to network, hardware and
software failures or problems with data
quality
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Typical problems

• Web site and apps too slow

• Services designed for desktop not
viewable via mobile
• Website or app service unavailable
• Bugs in apps or errors in data
• Products and services not being
delivered on time

• Customer communications not being

dealt with
• Privacy and trust issues, such as fraud
or data theft

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Key management issues of
digital business infrastructure

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Supporting the growing range of
digital business technology platforms
Desktop, laptop and notebook platforms:
1. Desktop browser-based platform.
2. Desktop apps.
3. Email platforms.
4. Feed-based and API data exchange platforms.
5. Video-marketing platforms.
Mobile phone and tablet platforms:
6. Mobile operating system and browser.
7. Mobile-based apps.

 Mobile marketing: Marketing to encourage consumer

engagement when they’re using mobile phones
(particularly smartphones).

 Location-based marketing: Location or proximity-

based marketing is mobile marketing based on the GPS
built into phones or based on interaction with other local
digital devices such as wifi routers or mobile phone
towers.

 Gaming platforms. Whether it’s a PlayStation, Nintendo

or Xbox variety of gaming machine, there are many
options to reach gamers through ads or placements
within games, for example in-game ads.
 Indoor and outdoor kiosk-type apps. For example,
interactive kiosks and augmented reality options to
communicate with consumers.
 Interactive signage. The modern version of signage,
which is closely related to kiosk apps, may incorporate
different methods such as touch-screen, Bluetooth, NFC
or QR codes to encourage interaction.

• A software application that is designed for use on a

mobile phone, typically downloaded from an app store
such as Apple App Store and Google Play. All
smartphones support the use of apps, which can provide
users with information, entertainment or location-based
services such as mapping.

• Blends real-world digital data captured typically with a digital

camera in a webcam or mobile phone to create a digital
representation or experience mimicking that of the real world.

 Lacoste used AR to allow shoppers to ‘try-on’ trainers or

sneakers in store without actually putting the real shoes on, and
share the experience on social networks.
 Tesco allowed customers to see key soft-furnishing products
within their own home with the augmented ‘Home Book’
catalogue.
 Ikea created an app that allowed users to see pieces of Ikea
furniture in their own rooms by scanning a logo in the paper
catalogue.

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A five-layer model of digital
business infrastructure

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Digital Business Infrastructure
Components
Kampas (2000) describes an alternative five-level infrastructure
model of what he refers to as ‘the information system function
chain’:
1. Storage/physical. Memory and disk hardware components
(equivalent to Level IV in Figure 3.3).
2. Processing. Computation and logic provided by the processor
(processing occurs at Levels I and II).
3. Infrastructure. This refers to the human and external interfaces
and also the network, referred to as ‘extrastructure’. (This is
Level III, although the human or external inter-faces are not
shown there.)
4. Application/content. This is the data processed by the
application into information (Level V).
5. Intelligence. Additional computer-based logic that transforms
information to knowledge (Level I).

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A short introduction to digital
technology
 Client–server: the client–server architecture consists of
client computers, such as PCs, sharing resources such
as a database stored on more powerful server
computers.
 Internet service provider (ISP): A provider providing
home or business users with a connection to access the
Internet. They can also host web-based applications.
 Backbones: High-speed communications links used to
enable Internet communications across a country and
internationally.

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Activity
• A B2B company has found that after an
initial surge of interest in its intranet and
extranet, usage has declined dramatically.
The digital business manager wants to
achieve these aims:
– Increase usage of both
– Produce more ‘dynamic’ content
– Encouraging more clients to order via the
extranet
• What would you suggest?

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Example suggestions
• Identify benefits
• Involve staff with development
• Find system sponsors, owners and
advocates
• Train staff and customers on benefits
• Keep content fresh, relevant and where
possible, fun
• Use social media and SMS to encourage
usage

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Management issues in creating a new
customer-facing digital service
 Domain name selection;

 Selection of hosting services, including cloud providers;

 Selection of additional SaaS (Software as a Service)

platforms.

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URLs and domain names
• Web addresses are structured in a standard way as follows:
• http://www.domain-name.extension/filename.html
• What do the following extensions or global top level domains
stand for?
– .com
– .co.uk, .uk.com
– .org or .org.uk
– .gov
– .edu, .ac.uk
– .int
– .net
– .biz
– .info
• What other extensions exist for specialised purposes?

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Uniform (universal) Resource Locator
(URL)
 A web address used to locate a web page on a web server.

 URL strategy A defined approach to forming URLs, including

the use of capitalisation, hyphenation and sub-domains for
different brands and different locations. This has implications
for promoting a website offline through promotional or vanity
URLs, search engine optimisation and findability.

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What’s in a URL?
• Protocol
• Host or hostname
• Subdomain
• Domain name
• Top-level domain or TLD
• Second-level domain (SLD)
• The port
• The path
• URL parameter
• Anchor or fragment

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Domain Name Registration
 The process of reserving a unique web address that can
be used to refer to the company website.
 Most companies own several domains, for different
product lines or countries or for specific marketing
campaigns.
 Domain name disputes can arise when an individual or
company has registered a domain name that another
company claims they have the right to. This is
sometimes referred to as ‘cybersquatting’.
 Managers or agencies responsible for websites need to
check that domain names are automatically renewed by
the hosting company (as most are today).

 A key management decision is whether to standardise

throughout the organisation.
 Standardisation leads to reduced numbers of contacts
for support and maintenance and can reduce purchase
prices through multi-user licences.
 Systems software choices occur for the client, server
and network.
 On client computers, the decision will be which browser
software to standardise on.
 Standardised plug-ins should be installed across the
organisation.

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Digital Business Applications
Infrastructure
 Applications that provide access to services and
information inside and beyond an organisation.
 Management of the digital business applications
infrastructure concerns delivering the right applications to
all users of digital business services.
 The issue involved is one that has long been a concern of
IS managers, namely to deliver access to integrated
applications and data that are available across the whole
company. Traditionally businesses have developed
applications silos or islands of information, as depicted in
Figure 3.4(a) .

Source: Adapted from Hasselbring (2000)

• Customer lifetime value: Lifetime value is the total net

benefit that a customer or group of customers will
provide a company over their total relationship with the
company.

• Enterprise resource planning (ERP) applications:

Software providing integrated functions for major
business functions such as production, distribution,
sales, finance and human resources management.

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Elements of digital business
infrastructure that need management

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The Development of Customer
Experiences and Digital Services

 ‘Web services’, or ‘Software as a Service (SaaS)’, refers

to a highly significant model for managing software and
data within the digital business age.
 The web services model involves managing and
performing all types of business processes and activities
through accessing web-based services rather than
running a traditional executable application on the
processor of your local computer.

• SaaS are usually paid for on a subscription basis, so can

potentially be switched on and off or payments paid
according to usage, hence they are also known as ‘on
demand’.
• The main business benefit of these systems is that
installation and maintenance costs are effectively
outsourced.
• Cost savings are made on both the server and client
sides, since the server software and databases are
hosted externally and client applications software is
usually delivered through a web browser or a simple
application that is downloaded via the web.

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Application Programming Interfaces
(APIs)
• Amazon Web Services.
• Facebook and Twitter use their APIs to help other sites
embed social content into their sites.
• The Guardian Newspaper Open Platform.
• Google APIs.
• Kayak is an aggregator that allows third-party sites to
integrate kayak.com searches and results into their
website, desktop application or mobile phone
application.

 Downtime or poor availability if the network connection

or server hosting the application or server fails.

 Lower performance than a local database.

 Reduced data security.

 Data protection.

 Multi-tenancy SaaS: A single instance of a web service

is used by different customers (tenants) run on a single
server or load-balanced across multiple servers.
Customers are effectively sharing processor, disk usage
and bandwidth with other customers.

 Single-tenancy SaaS: A single instance of an

application (and/or database) is maintained for all
customers (tenants) who have dedicated resources of
processor, disk usage and bandwidth. The single
instance may be load-balanced over multiple servers for
improved performance.

 Utility computing: IT resources and in particular

software and hardware are utilised on a pay-per-use
basis and are managed externally as ‘managed
services’.

 Applications service provider: A provider of business

applications such as email, workflow or groupware, or
any business application on a server remote from the
user. A service often offered by ISPs.

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Cloud Computing
• The use of distributed storage and processing on servers
connected by the Internet, typically provided as software or data
storage as a subscription service provided by other companies.
• Examples of cloud computing web services:
 web mail readers;
 e-commerce account and purchasing management facilities, such as
Amazon.com;
 many services from Google such as Google Maps, Gmail, Picasa
and Google Analytics;
 office application solutions from Microsoft with Office 365;
 customer relationship management applications from Salesforce.com
and Siebel/ Oracle;
 supply chain management solutions from SAP and Oracle;
 social media services such as Facebook, Twitter, Instagram,
Google+, Pinterest, Tumblr and LinkedIn.

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Virtualisation
• The indirect provision of technology services through
another resource (abstraction). Essentially one computer is
using its processing and storage capacity to do the work of
another.
• So, virtualisation has these benefits:
• the ability to run many operating systems on a single machine;
• splits individual system resources between many virtual
machines;
• stops faults and security breaches at the hardware level;
• maintains system performance;
• one can save the current state of a virtual machine for later use;
• virtual machines can be moved and reused as easily as moving
and copying files;
• any virtual machine can be moved to a real server.

 Architecture is a collection of services that communicate

with each other as part of a distributed systems
architecture comprising different services.

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The main role of a service within SOA is to provide
functionality. This is provided by three characteristics:

1. An interface with the service that is platform-independent

(not dependent on a particular type of software or
hardware).

2. The service can be dynamically located and invoked.

3. The service is self-contained.

 Hosting provider: A service provider that manages the

server used to host an organisation’s website and its
connection to the Internet backbones.
 An important aspect of hosting selection is whether the
server is dedicated or shared (co-located).

 Dedicated server: Server contains only content and

applications for a single company.

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ISP Connection Methods
 Dial-up connection: Access to the Internet via phone
lines using analogue modems. While it might seem
surprising, there are still many thousands of UK dial-up
users in places where broadband service is not
available.

 Broadband connection: Access to the Internet via

phone lines using a digital data transfer mechanism.

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Issues in Management of ISP and Hosting
Relationships

• Speed of access.

• Availability.

• Service level agreements.

• Security.

 Total cost of ownership (TCO): The sum of all cost

elements of managing information systems for end-
users, including purchase, support and maintenance.

 Content management system (CMS): Software used to

manage creation, editing and review of web-based
content.

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A marketing intranet has the following
advantages:
• Reduced product lifecycles – as information on product development
and marketing campaigns is rationalised we can get products to
market faster.
• Reduced costs through higher productivity, and savings on hard copy.
• Better customer service.
• Distribution of information through remote offices nationally or
globally.
• Intranets are also used for internal marketing communications since
they can include:
• staff phone directories;
• staff procedures or quality manuals;
• information for agents such;
• staff bulletin or newsletter;
• training courses.

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Business benefits of an extranet
include:
• Integrating the supply chain using ordering, order tracking and stock
control in an online environment – look at how Amazon make this
happen.
• Cutting the cost of making documentation available to end-users and
business partners.
• Allowing collaborative and speedy development of materials and
documents between partners, suppliers and customers.
• Improving the customer experience by providing access to information
for customers.
• A single entry point into the organisation for all outsiders.
• Ensuring consistency, safety and security of service for external users.
• The provision of ‘only for registered users’ propositions, unavailable to
people not registered or not customers.
• The inevitable growth of the virtual company as all resources used by
employees, partners and customers alike don’t require ‘being on the
premises’.

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These are five key questions that need to be asked
when reviewing an existing extranet or when
creating a new extranet:

1. Are the levels of usage sufficient?

2. Is it effective and efficient?

3. Who has ownership of the extranet?

4. What are the levels of service quality?

5. Is the quality of the information adequate?

 Middleware Software: used to facilitate

communications between business applications,
including data transfer and control; sometimes referred
to as the ‘glue’ that joins up disparate services.

 Enterprise application integration (EAI): Software

used to facilitate communications between business
applications, including data transfer and control.

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Encouraging use of Intranets and
Extranets
• staff usage of the intranet is low, and not growing;
• the majority of content is out of date, incomplete or
inaccurate;
• the intranet is very inconsistent in appearance,
particularly across sections managed by different
groups;
• almost all information on the intranet is reference
material, not news or recent updates;
• most sections of the intranet are used solely to publicise
the existence of the business groups within the
organisation.

• Streaming TV is delivered using Internet Protocol, either

by a broadband connection or increasingly via mobile
3G/4G or 5G service. Streaming TV can be streamed
using real-time broadcasting (such as the synchronous
playing of a TV channel), real-time streaming of recorded
content (such as a movie) or downloaded before
playback.

• Voice data is transferred across the Internet – it enables

phone calls to be made over the Internet.
• Voice over IP (VoIP) can be used for transmitting voice over a
LAN or on a wider scale.
• Benefits include:
 Click-to-call – users click the number they want from an on-
screen directory.
 Call forwarding and conferencing to people at other locations.
 Unified messaging – emails, voicemails and faxes are all
integrated into a single inbox.
 Hot-desking – calls are routed to staff wherever they log in – on-
site or off-site.
 Cost control – review and allocation of costs between different
businesses is more transparent.

1. Peer-to-peer.

2. Hosted of services.

3. Complete replacement of all telephone systems.

4. Upgrading existing telephone systems to use VoIP.

• Badges or buttons incorporated into a website or social

network space by its owner, with content or services
typically served from another site, making widgets
effectively a mini software application or web service.
Content can be updated in real time since the widget
interacts with the server each time it loads.

1. Web widgets.

2. Mobile widgets.

3. Desktop and operating system gadgets.

4. Social media widgets.

5. Facebook applications.

6. Browser extensions.

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Digital Business and E-Commerce
Management
Seventh Edition

Part 1
Introduction

Chapter 4
Key issues in the digital
environment

• Generally, an organisation has two environments:

• macro-environment – i.e. elements outside of the organisation

that indirectly influence its operations.

• micro-environment – i.e. internal factors that directly influence

the organisation, such as suppliers, competitors,
intermediaries and customers.

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SLEPT Factors
• Macro-environment
– Social
– Legal
– Economic
– Political
– Technological

• Social factors – these include the influence of consumer

perceptions in determining usage of the Internet for
different activities.
• Legal and ethical factors – these determine the method
by which products can be promoted and sold online.
Governments, on behalf of society, seek to safeguard
individuals’ rights to privacy.
• Economic factors – variations in economic performance
in different countries and regions affect spending
patterns and international trade.

• Political factors – national governments and

transnational organisations have an important role in
determining the future adoption and control of the
Internet and the rules by which it is governed.
• Technological factors – changes in technology offer new
opportunities for the way products can be marketed.

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Factors in the macro- and micro-
environment of an organisation

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Significant laws that control digital
marketing (Continued)

• Advertisers target ads at a visitor as they move within or

between sites dependent on their viewing particular sites
or types of content that indicate their preferences.

Every country has people with different attitudes and

opinions to certain ideas, products/ services and
communication. Some of the key elements include:

• culture;
• demographics such as age and gender;
• social lifestyles;
• domestic structures;
• affluence/wealth;
• religion.

Some of the key legal factors to consider are:

• data protection and privacy law (particularly regarding

email);
• disability and discrimination law;
• brand and trademark protection;
• intellectual property rights;
• contract law;
• online advertising law.

These relate to the elements of an economy and its

condition. Examples include:

• market growth and employment;

• inflation rate;
• interest rates;
• monetary/fiscal policies;
• foreign exchange rates.

An organisation needs to consider the political situation of a

country and the world in relation to that country. Areas to
consider include:

• government/leadership;
• policies;
• tax laws;
• internet governance.

• New technology is
changing the way that
people (and businesses)
do things, from
connecting with others to
purchasing products and
services.
• Improvements in both
hardware and software
are key factors in this
change.

• The social and cultural impacts

of the Internet are important
from an e-commerce
perspective since they govern
demand for digital services
and propensity to purchase
online and use different types
of e-commerce services.

• Nowadays, smartphones are

changing the way people
interact with companies, family
and friends.

1. Credit card information being stolen.

2. ‘Fake’ online stores.

3. Information will get sold.

4. Unsure what the product is really like.

5. Lost orders.

6. Need help from a salesperson.

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Problems encountered when
buying over the Internet

Source: File:Problems encountered when buying over the internet, EU-28, 2016, Eurostat.

• usage location (from home or work);

• access device (browser and computer platform including
mobile devices);
• connection speed – broadband versus dial-up
connections;
• ISP;
• experience level;
• usage type;
• usage level.

• To help develop effective online services, we need to

understand customers’ online buyer behaviour and
motivation.
• An assessment of how consumers and business people
use the Internet in combination with other
communications channels when selecting and buying
products and services.
• Managers also need to understand how different types of
media, intermediary and influencer sites influence
consumers; for example, are blogs, social networks or
traditional media sites more trusted?

Source: EuroStat (2012)

Source: EuroStat, 2016

 Marketers can also develop psychographic

segmentations that divide users/potential users into
groups based on their knowledge, attitudes, uses and
responses to the brand, product or service.
 Demographics help explain ‘who’ your buyer is and
psychographics help you understand ‘why’ your
customer buys.
 Psychographic segmentation: A breakdown of
customers according to different characteristics.

• Occasion – when do they purchase, use or think of

buying a product?
• Benefits sought – why are they considering the product?
Are they trying to solve a problem? Make their life
better?
• Usage rate – heavy, medium or light usage?
• User status – are they non-users, potential users, first-
time users, regular users or ex-users of a product or
service?
• Loyalty status – are they loyal or likely to switch?

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There are a number of different ways you can gather data to
help form psychographic profiles for your typical
customers:

 Interviews.

 Surveys.

 Customer data.

• The revised Web Motivation Inventory (WMI) identified

by Rodgers et al. (2007) is a useful framework for
understanding different motivations for using the web.
The four motives that cut across cultures are: research
(information acquisition); communication (socialisation);
surfing (entertainment); and shopping. These are then
broken down further:
• Community; entertainment; product trail; information;
transaction; game; survey; downloads; interaction; search;
downloads; interaction; search; exploration; news.

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Privacy and Trust in e-Commerce

 Ethical standards are personal or business practices or

behaviour generally considered acceptable by society.
 Ethical issues and the associated laws constitute an
important consideration of the Inter-net business
environment for marketers.
 Privacy of consumers is a key ethical issue that affects
all types of organisation regardless of whether they have
a transactional e-commerce service.

 Privacy refers to a moral right of individuals to avoid

intrusion into their personal affairs by third parties.
 Privacy of personal data such as our identities, likes and
dislikes is a major concern to consumers, particularly
with the dramatic increase in identity theft.
 This is clearly a major concern for many consumers
when using e-commerce services since they believe that
their privacy and identity may be compromised.

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The government’s National Cyber Security Strategy
(published in November 2016) defines cybercrime as:

1. Cyber-dependent crimes – crimes that can be

committed only through the use of Information and
Communications Technology (ICT) devices, where the
devices are both the tool for committing the crime, and
the target of the crime (e.g. developing and propagating
malware for financial gain, hacking to steal, damage,
distort or destroy data and/or network or activity).
2. Cyber-enabled crimes – traditional crimes that can be
increased in scale or reach by the use of computers,
computer networks or other forms of ICT (such as
cyber-enabled fraud and data theft).

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Why personal data is valuable for
digital business

• While there is naturally much concern among consumers

about their online privacy, information about these
consumers is very useful to marketers.
• Through understanding their customers’ needs,
characteristics and behaviours it is possible to create
more personalised, targeted communications, which help
increase sales.
• How should marketers respond to this dilemma? An
obvious step is to ensure that marketing activities are
consistent with the latest data protection and privacy
laws.

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What are the main information types used by the Internet
marketer that are governed by ethics and legislation? The
information needs are:

1. Contact information.

2. Profile information.

3. Platform usage information.

4. Behavioural information (on a single site).

5. Behavioural information (across multiple sites).

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Types of information collected online and
related technologies

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Types of information collected online and
related technologies (Continued)

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Ethical issues and data Protection
• Ethical issues concerned with personal
information ownership have been usefully
summarised by Mason (1986) into four areas:
‒ Privacy – what information is held about the
individual?
‒ Accuracy – is it correct?
‒ Property – who owns it and how can ownership be
transferred?
‒ Accessibility – who is allowed to access this
information, and under which conditions?

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Ethics – Fletcher’s view
• Fletcher (2001) provides an alternative
perspective, raising these issues of concern
for both the individual and the marketer:
‒ Transparency – who is collecting what information?
‒ Security – how is information protected once collected
by a company?
‒ Liability – who is responsible if data are abused?

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General data protection regulation
(GDPR)
• You must be able to demonstrate how the data subject has
consented, which means marketing must record how and who
gave consent
• The data subject must be able to withdraw consent at any
time and it shall be as easy to withdraw consent as to give it
• Consent should cover all processing activities carried out for
the same purposes
• If processing for multiple purposes, consent should be given
for all those purposes
• Consent should not be considered freely given if the data
subject has no genuine or free choice
• Silent consent, pre-ticked boxes or inactivity should not
constitute consent
www.gov.uk/data-protection
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The new GDPR includes guidance on:

• consent;
• transparency;
• profiling;
• high-risk processing;
• certification;
• administrative fines;
• breach notification;
• data transfers.

• Permission marketing: Customers agree (opt-in) to be

involved in an organisation’s marketing activities, usually
as a result of an incentive

• Persistent cookies: Cookies that remain on the

computer after a visitor session has ended. Used to
recognise returning visitors.
• Session cookies: Cookies used to manage a single
visitor session.
• First-party cookies: Served by the site you are
currently using – typical for e-commerce sites.
• Third-party cookies: Served by another site to the one
you are viewing – typical for portals where an ad network
will track remotely or where the web analytics software
places a cookie.

 Privacy statement: Information on a website explaining

how and why an individual’s data are collected,
processed and stored.

• One widespread business practice that is not covered

explicitly in the PECR law is ‘viral marketing’, because
organisations cannot be sure that friends actually agreed to
give them their details.
• In an online context, ‘Forward to a friend’ email used to
transmit a promotional message from one person to another;
‘online word-of-mouth’.
• Several initiatives are being taken by industry groups to
reassure web users about threats to their personal
information.
• The first of these is TrustArc (www.trustarc.com).
• Another initiative, aimed at education, is GetSafeOnline
(www.getsafeonline.org)

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A checklist summary of the practical steps that are
required to audit a company’s compliance with data
protection and privacy legislation.
1. Follow privacy and consumer protection guidelines and laws in all local markets.
Use local privacy and security certification where available.
2. Inform the user, before asking for information.
3. Ask for consent for collecting sensitive personal data, and it is good practice to
ask before collecting any type of data.
4. Reassure customers by providing clear and effective privacy statements and
explaining the purpose of data collection.
5. Let individuals know when ‘cookies’ or other covert software is used to collect
information about them.
6. Never collect or retain personal data unless they are strictly necessary for the
organisation’s purposes. If extra information is required for marketing purposes,
this should be made clear and the provision of such information should be
optional.
7. Amend incorrect data when informed and tell others. Enable correction on-site.
8. Only use data for marketing (by the company, or third parties) when a user has
been informed that this is the case and has agreed to this. (This is opt-in.)
9. Provide the option for customers to stop receiving information. (This is opt-out.)
10. Use appropriate security technology to protect the customer information on their
site.

• Marketing your e-commerce business.

• Forming an electronic contract (contract law and
distance-selling law).
• Making and accepting payment.
• Authenticating contracts concluded over the Internet.
• Email risks.
• Protecting intellectual property (IP).
• Advertising on the Internet.
• Data protection.

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Environmental and green issues related to
Internet usage

1. Fewer vehicle-miles.

2. Lower inventory requirements.

3. Fewer printed materials.

4. Less packaging.

5. Less waste.

6. Dematerialisation.

 Electronic economy (e-economy): The dynamic system

of interactions between a nation’s citizens, businesses
and government that capitalise upon online technology
to achieve a social or economic good.
 Globalisation: The increase of international trading and
shared social and cultural values.
 Localisation: Tailoring of website information for
individual countries or regions.

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Localisation
• Singh and Pereira (2005) provide an evaluation
framework for the level of localisation:
– Standardised websites (not localised). A single site serves all
customer segments (domestic and international)
– Semi-localised websites. A single site serves all customers;
however, there will be contact information about foreign
subsidiaries available for international customers. Many sites fall
into this category
– Localised websites. Country-specific websites with language
translation for international customers, wherever relevant. 3M
(www.3m.com) has adapted the websites for many countries to
local language versions. It initially focused on the major websites

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Localisation (Continued)
• Highly localised websites. Country-specific websites
with language translation; they also include other
localisation efforts in terms of time, date, postcode,
currency formats, etc. Dell (www.dell.com) provides
highly localised websites
• Culturally customised websites. Websites reflecting
complete ‘immersion’ in the culture of target customer
segments; as such, targeting a particular country may
mean providing multiple websites for that country
depending on the dominant cultures present. Durex
(www.durex.com) is a good example of a culturally
customised website

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Government and Digital
Transformation
• promoting the benefits of adopting the Internet for
consumers and business to improve a country’s
economic prosperity;
• enacting legislation to protect privacy or control taxation,
as described in previous sections;
• providing organisations with guidelines and assistance
for compliance with legislation;
• setting up international bodies to coordinate the Internet.

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Booz Allen Hamilton (2002) review approaches used by
governments to encourage use of the Internet. They
identify five broad themes in policy:

1. Increasing the penetration of ‘access devices’.

2. Increasing skills and confidence of target groups.

3. Establishing ‘driving licences’ or ‘passport’

qualifications.

4. Building trust, or allaying fears.

5. Direct marketing campaigns.

• This means ‘Financial Technology’ and is a growing

sector that uses new technology and innovation in the
financial services market to create disruptive business
models and inclusive products. For example, bKash
allows people in Bangladesh (where less than 15% of
the population are connected to the formal banking
sector) to safely send and receive money via mobile
phones.

• Internet governance describes the control put in place to

manage the growth of the Internet and its usage.
• Dyson (1998) describes the different layers of jurisdiction.
These are:
1. Physical space comprising each individual country where its
own laws hold.
2. ISPs – the connection between the physical and virtual worlds.
3. Domain name control ( www.icann.org ) and communities.
4. Agencies such as TRUSTe, now called TrustArc (
www.trustarc.com ).
The organisations that manage the infrastructure also have a
significant role in governance.

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Electronic Government (e-government)
The use of Internet technologies to provide government
services to citizens.

The European Commission has published an eGovernment

Action Plan 2016–2020, to facilitate a ‘digital single market’.
The plan has three main aims:
1. to modernise public administration;
2. to achieve the digital internal market;
3. to engage more with citizens and businesses to deliver
high-quality services.

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Technological issues
• Rate of change
– Which new technologies should we adopt?
 Monitoring for new techniques
 Evaluation, are we early adopters?
 Re-skilling and training
• Are our systems secure?

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Diffusion–adoption curve (adopted
from Rogers, 1983)

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Trott (1998) identifies different requirements that are
necessary within an organisation to be able to respond
effectively to technological change or innovation:

• Growth orientation – a long-term rather than short-term vision.

• Vigilance – the capability of environment scanning.
• Commitment to technology – willingness to invest in
technology.
• Acceptance of risk – willingness to take managed risks.
• Cross-functional cooperation – capability for collaboration
across functional areas.
• Receptivity – the ability to respond to externally developed
technology.
• Slack – allowing time to investigate new technological
opportunities.
• Adaptability – a readiness to accept change.
• Diverse range of skills – technical and business skills and
experience.

1. Technology networking.

2. Crowdsourcing.

3. Technology hunting.

4. Technology mining.

5. Technology incubators.

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Digital Business and E-Commerce
Management
Seventh Edition

Part 3
Implementation

Chapter 9
Customer experience and
service design

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Learning outcomes
• Summarise approaches for analysing
requirements for digital business systems
• Assess an online business’ customer
experience (CX)
• Identify key elements of approaches to improve
the interface design and security design of
e-commerce systems

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Analysis for digital business
• Understanding processes and information flows
to improve service delivery.
• Pant and Ravichandran (2001) said:
‘Information is an agent of coordination and
control and serves as a glue that holds together
organizations, franchises, supply chains and
distribution channels. Along with material and
other resource flows, information flows must also
be handled effectively in any organization’.

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Process Modelling
Traditional approaches to process analysis use established
systems analysis and design methods that are part of
methodologies such as structured systems analysis and
design methodology (SSADM), like the data flow diagram
technique outlined in Bocij et al. (2008) . Such approaches
often use a hierarchical method of establishing:

• the processes and their constituent sub-processes;

• the dependencies between processes;
• the inputs (resources) needed by the processes and the
outputs.

• Activity-based process definition methods: Analysis

tools used to identify the relationship between tasks
within a business process.
• Process: Part of a system that has a clearly defined
purpose or objective and clearly defined inputs and
outputs.
• Significant business processes are elements of the value
chain; they include inbound logistics (including procure-
ment), manufacture, outbound logistics or distribution
and customer relationship manage-ment or sales and
marketing activity.

 Existing business processes often overlap different

functional areas of a business. So, before detailed
activities are identified, the analyst needs to identify
where in the organisation processes occur and who is
responsible for them.
 Process mapping: Identification of location and
responsibilities for processes within an organisation.

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Task analysis and task decomposition

• Before a process such as a ‘prepare proposal’ can be

designed and implemented, a more detailed breakdown
is required. This is usually referred to as task analysis.
• Task analysis: Identification of different tasks, their
sequence and how they are broken down.
• The number of levels and the terminology used for the
different levels will vary according to the application you
are using and the consultant you may be working with.

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An example of task decomposition
for an estate agency

Source: Adapted from Chaffey (1998).

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An example of task decomposition
for an estate agency (Continued)

Source: Adapted from Chaffey (1998).

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The key benefits of workflow are:
• Improved efficiency – automation of many business
processes results in the elimination of many unnecessary
steps.
• Better process control – improved management of business
processes is achieved through standardising working
methods and the availability of audit trails.
• Improved customer service – consistency in the processes
leads to greater predictability in levels of response to
customers.
• Flexibility – software control over processes enables their
redesign in line with changing business needs.
• Business process improvement – focus on business
processes leads to their streamlining and simplification.
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Process Dependencies

• Normally, activities occur in a sequence and are serial;

sometimes activities can be parallel.
• Flow process charts.
• Network diagrams.
• Event-driven process chain.

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Workflow management
Workflow is the automation of a business process,
in whole or part during which documents,
information or tasks are passed from one
participant to another for action, according to a set
of procedural rules
Examples:
• Booking a holiday
• Handling a customer complaint
• Receiving a customer order.

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The workflow approach gives a consistent, uniform
approach for improved efficiency and better customer
service. Workflow software provides functions to:

• assign tasks to people;

• remind people about their tasks, which are part of a
workflow queue;
• allow collaboration between people sharing tasks;
• retrieve information needed to complete the task, such
as a customer’s personal details;
• provide an overview for managers of the status of each
task and the team’s performance.

1. Administrative workflow. Internal administrative tasks

such as managing purchase orders for procurement
and booking holidays and training.
2. Production workflow. Customer-facing or supplier-
facing workflow such as an intranet-or extranet-based
customer support database and stock management
system integrated with a supplier’s system.

• A simple flow chart is a good starting point for describing

the sequence of activities of a workflow.
• Despite their simplicity, flow charts are effective in that they
are easy to understand by non-technical staff and also they
highlight bottlenecks and inefficiencies.
• Flow process charts are used commonly when solving
digital business problems, whether in the front office or the
back office.
• Each symbol in the chart refers to a particular operation
within the overall process. An explanation of the symbols
used in flow process chart analysis is shown in Figure 9.3.

• Effort duration analysis is an analytical tool that can be

used to calculate the overall efficiency of a process when
we have performed a detailed analysis.
• To do this, we sum the average time it takes workers to
complete every activity making up the overall process,
then divide this by the total length of time the whole
process takes to occur.
• The total process time is often much longer since this
includes time when the task is not being worked on.

• While data flow diagrams and flow process charts may

give a good indication of the sequence in which activities
and tasks occur, they often do not give a sufficiently tight.
• To do this we can use a network diagram known as a
GAN (generalised activity network).
• Here, nodes are added between the boxes representing
the tasks, to define precisely the alternatives that exist
following completion of a task.
• The most common situation is that one activity must
follow another – for example, a check on customer
identity must be followed by a credit check.

• One of the most widely used methods for describing

business events and processes is the event-driven
process chain method (EPC).
• This has been popularised by its application to re-
engineering of enterprises performed using the SAP R/3
ERP product, which accounts for worldwide sales of
several billion dollars.
• Over 800 standard business EPCs are defined to
support the SAP R/3 system; they are intended to
illustrate business rules clearly for interpretation by
business users before enactment in the software.

 Whichever method has been used to arrive at the

process definition, we need to check that the process
definition is realistic.
 When developing a wish list of process capabilities and
corresponding business rules, the stages described by
David Taylor in his book on concurrent engineering
(Taylor, 1995) may be useful.
 He suggests that once new processes have been
established they are sanity checked by performing a
‘talk-through, walk-through and run-through’.

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Data modelling
• Uses well-established techniques used for
relational database design
• Stages:
1. Identify entities
2. Identify attributes for entities
3. Identify relationships between entities.

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1. Identify entities
• Entities define the broad groupings of information
such as information about different people,
transactions or products. Examples include
customer, employee, sales orders, purchase orders.
When the design is implemented, each design will
form a database table.
• Entity. A grouping of related data, such as customer
entity, implemented as a table.
• Database table. Each database comprises several
tables.

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2. Identify attributes
• Entities have different properties known as
attributes that describe the characteristics
of any single instance of an entity. For example,
the customer entity has attributes such as name,
phone number and email address. When the
design is implemented each attribute will form a
field, and the collection of fields for one instance
of the entity such as a particular customer will
form a record.

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2. Identify attributes (Continued)
• Attribute. A property or characteristic of an entity,
implementation as field.
• Field. Attributes of products, such as date of
birth.
• Record. A collection of fields for one instance of
an entity, such as Customer Smith.

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3. Identify relationships
• The relationships between entities require identification
of which fields are used to link the tables. For example,
for each order a customer places we need to know which
customer has placed the order and which product they
have ordered. As is evident from Figure 9.6, the fields
‘customer id’ and ‘product id’ are used to relate the order
information between the three tables. The fields that are
used to relate tables are referred to as key fields. A
primary key is used to uniquely identify each instance of
an entity and a secondary key is used to link to a
primary key in another table.

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3. Identify relationships
(Continued)
• Relationship. Describes how different tables are
linked.
• Primary key. The field that uniquely identifies
each record in a table.
• Secondary key. A field that is used to link tables,
by linking to a primary key in another table.

 The design element of creating a digital business system

involves specifying how the system should be structured
and how the end-user functionality and ‘back-end’
integration with other projects will be implemented.

 System design defines how an information system will

operate.

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Architectural Design of Digital
Business Systems
• The starting point for design of digital business systems is
to ensure that a common architecture exists across the
company in terms of hardware and software technology,
applications and business processes.
• Digital business systems follow the same client–server
model architecture of many business information systems
created in the 1990s.
• For the digital business, the clients were traditionally
employees, suppliers or customers’ desktop PCs and
mobile devices which gave the ‘front-end’ access point to
digital business applications.
• These client devices are connected to a ‘back-end’ server
computer via an intranet, extranet or Internet.
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Three-tier client–server in a
digital business environment

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Client–server architecture –
separation of functions
• Data storage. Predominantly on server.
Client storage is ideally limited to cookies for
identification of users and session tracking.
Cookie identifiers for each system user are then
related to the data for the user which is stored
on a database server.
• Query processing. Predominantly on the server,
although some validation can be performed on
the client.

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Client–server architecture –
separation of functions (Continued)
• Display. This is largely a client function.
• Application logic. Traditionally, in early PC
applications this has been a client function, but
for digital business systems the design aim is to
maximise the application logic processing
including the business rules on the server.

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User-Centred Design
‘Unless a web site meets the needs of the
intended users it will not meet the needs of the
organization providing the website

Web site development should be user-centred,

evaluating the evolving design against user
requirements’.

(Bevan, 1999a)

• User-centred design (UX): Design based on optimising

the user experience according to all factors, including the
user interface, that affect this.

• Customer experience management (CXM): User

experience improvements are broadened to consider the
context of use to different physical locations or customer
touchpoints across different digital platforms including
desktop, mobile sites, apps, social networks and email
marketing. Context of use includes device type, location
and interactions with customer service.

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Customer Experience Management
(CXM)
• The development of UX to CXM has been prompted by:
• the use of smartphone and mobile devices;
• dual or multiscreening where a smartphone or tablet may be used
alongside other devices, including TVS;
• multichannel shopping behaviour where mobile devices may be used
in-store as part of the purchase decision, or the decision to purchase
offline is prompted by online experiences and vice versa;
• the website experience being closely integrated to other online
company platforms, including company social network pages and
email communications;
• the integration of offline customer service with online customer service
through services such as livechat and call-back integrated into
websites.

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Analysis considerations (Bevan)
• Who are the important users?
• What is their purpose in accessing the site?
• How frequently will they visit the site?
• What experience and expertise do they have?
• What nationality are they? Can they read English?
• What type of information are they looking for?
• How will they want to use the information: read it
on the screen, print it or download it?
• What type of browsers will they use? How fast will their
communication links be?
• How large a screen/window will they use, with how many
colours?
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Online Customer Experience

 The combination of rational and emotional factors of

using a company’s online services that influences
customers’ perceptions of a brand online.
 The concept of online brand promise is closely related to
that of delivering online customer experience.
 Before we study best practice in user-centered design, it
should be noted that usability and accessibility are only
one part of the overall package that determines a
visitor’s experience (see Figure 9.9).

1. Emotional connection.

2. Online experience.

3. Responsive service nature.

4. Trust.

5. Fulfilment.

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Customer Experience (CX)
Management Framework
The first step in implementing a CX strategy involves
research and audit activities aimed at gaining a holistic view
of the customer experience. This includes:
• Customer experience lifecycle audit: understanding the
current breadth of channels and touch points and
identifying new interaction channel opportunities.
• Customer research: understanding what constitutes
customer value, and aligning the value provided per
channel. It also entails customer segmentation.
• Organisational alignment: Understanding current
processes and policies and aligning different departments
towards customer insights.
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Implementation

1. Define what great CX looks like.

2. Break down the channel focus.
3. It’s all about the customer journey.
4. Take charge.
5. Brand building is fundamental to differentiation.
6. Create your own framework.
7. Technology is a tool, not a solution.
8. Make room for innovation but choose wisely.
9. Leadership is key.
10. Start now.

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Usability
• Usability is a key concept within user-centered design
that is applied to the analysis and design for a range of
products to define how easy they are to use.
• Usability is an approach to website design intended to
enable the completion of user tasks.
• Expert reviews are often performed at the beginning of a
redesign project as a way of identifying problems with a
previous design and usability testing involves:
1. identifying representative users of the site and typical tasks;
2. asking them to perform specific tasks such as finding a
product or completing an order;
3. observing what they do and how they succeed.

• effectively – web usability specialists measure task

completion; for example, only three out of ten visitors to
a website may be able to find a telephone number or
other piece of information;
• efficiently – web usability specialists also measure how
long it takes to complete a task on-site, or the number of
clicks it takes.

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Evaluating designs
• Smart Insights (2010) lists five types of tools
used to continuously gain feedback
– Website feedback tools
– Crowdsourcing product opinion software
– Simple page or concept feedback tools
– Site exist survey tools
– General online survey tools.

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Use-case analysis
• The use-case method of process analysis and modelling
was developed in the early 1990s as part of the
development of object-oriented techniques. It is part of a
methodology known as Unified Modelling Language
(UML) that attempts to unify the approaches that
preceded it such as the Booch, OMT and Objectory
notations.
• Use-case modelling. A user-centred approach to
modelling system requirements.
• Unified Modelling Language (UML). A language used
to specify, visualise and document the artefacts of an
object-oriented system.
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Schneider and Winters (1998)
Stages in use-case
1. Identify actors
Actors are typically application users such as
customers and employers.
2. Identify use-cases
The sequence of transactions between an actor and
a system that support the activities of the actor.
3. Relate actors to use-cases
See Figure 11.16
4. Develop use-case scenarios
See Figure 11.17 for a detailed scenario.

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Customer scenarios and service
quality
• A customer scenario is a set of tasks that a
particular customer wants or needs to do in
order to accomplish his or her desired outcome.
Patricia Seybold, The Customer Revolution

I want to... I want to... I want to... I want to...

Successful
Outcome:

Customer

Example:
Example:
•• New customer –– open
New customer open online
online account
account
•• Existing customer –– transfer
Existing customer transfer account
account online
online
•• Existing customer –– find
Existing customer find additional
additional product
product
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Wireframes

 Wireframes Also known as ‘schematics’, a way of

illustrating the layout of an individual web page.

 Storyboarding is the use of static drawings or

screenshots of the different parts of a website to review
the design concept with user groups.

• They take one look at a home page and leave

after a few seconds if they can't figure it out.
• The abundance of choice and the ease of going
elsewhere puts a huge premium on making it
extremely easy to enter a site.

Nielsen www.useit.com

• Customer acquisition.
• Customer conversion.
• Customer retention.
• Branding.

• site design and structure;

• page design;

• content design.

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Site design issues
• Style and personality + design
– Support the brand
• Site organisation
– Fits audiences, information needs
• Site navigation
– Clear, simple, consistent
• Page design
– Clear, simple, consistent
• Content Covered by the
10 principles that
– Engaging and relevant
follow
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Page Design

• Page elements.

• The use of frames.

• Resizing.

• Consistency.

• Printing.

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Principle 7 – Support user
psychology
Hofacker’s five stages of information processing:
1. Exposure – can it be seen?
2. Attention – does it grab?
3. Comprehension and perception –
is message understood?
4. Yielding and acceptance –
is it credible and believable?
5. Retention – is the message and experience
remembered?

We will now review four common options for mobile site

development identified by Thurner (2016):

a) Responsive design (same content and domain,

common styling downloaded for different devices).
b) Adaptive design (same content and domain, different
styling set by rules on server).
c) HTML5 web app (independent of different app
platform). Separate mobile domain (same content).
d) Sperate mobile domain (some content).

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Web Accessibility
• Web accessibility is another core requirement for
websites. It is about allowing all users of a website to
interact with it regardless of disabilities they may have or
the web browser or platform they are using to access the
site.
• Although there is a moral imperative for accessibility,
there is also a business imperative. The main arguments
in favour of accessibility are:
• Number of visually impaired people.
• Number of users of less popular browsers or variation in
screen display resolution.
• More visitors from natural listings of search engines.
• Legal requirements.

Part 3
Implementation

Chapter 10
Managing digital business
transformation and growth
hacking

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Definitions
• What’s the difference between:
– Digital transformation?
– Digital business transformation?
• What’s the difference between:
– Adopting technology?
– Adapting to technology?

 The definition of digital transformation is contentious –

different commentators and theorists have differing
views, and this can lead to some confusion.
 The confusion comes from opposing worldviews about
what transforming means in the context of digital.
 People’s interpretation depends on how they view the
significance of an intervention in an organisation.

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Definitions of Digital Transformation
(cont.)
• Digital transformation can be described as all of the
changes that occur when ‘digital’ is applied to any
human endeavour (Stolterman and Fors, 2004).

• Lankshear and Knobel (2008) have a slightly different

view, and see it as the third stage in a journey that
society or a com-munity must make (the first stages
being digital competence and then digital literacy).

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Definitions of Digital Business
Transformation
• The Global Center for Digital Business Transformation defines
digital business transformation as a journey where businesses
‘adopt digital technologies and business models to improve
performance’ (Wade, 2015).
• The use of ‘adopt’ is contentious, because many businesses
adopt technology without necessarily changing themselves –
one might argue that (as has been suggested in the broader
definitions of digital transformation) businesses need to adapt
to digital technologies rather than just adopt them – yet they
themselves as an organisation also go on to say ‘Digital
business transformation is organisational change through the
use of digital technologies and business models to improve
performance’ (Wade, 2015).

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Adapting Versus Adopting
• The terms ‘adopting technology’ and ‘adapting to technology’ are
critical to understanding digital business transformation.
• Choosing one term over another indicates a particular worldview
about the role of digital in the business.
• When a business adopts a digital technology, the implication is that
the organisation isn’t changing in any way – it is merely
incorporating the technology into the organisation without any
particular change to the business.
• Buying new hardware, such as simply supplying new laptops to the
staff of a business where they previously had desktop computers, is
merely adopting a new technology.
• Many argue that this does not represent transformation at all, and
that transformation can only be represented by the adaptation of the
organisation to digital technology.
• Adaptation implies that the organisation is changing to take
advantage of the opportunities that digital can provide.

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Why is digital business transformation
not just about IT?
• The question is often asked as to why digital (business)
transformation is not just about IT.
• This question comes from the assumption that digital is
simply about technology, and is very much linked to the
difference between ‘adopting’ technology and ‘adapting
to’ technology.
• It is true to say that an organisation’s IT resources (in
terms of its IT infrastructure, investment and support
staff) are inevitably going to be linked to any digital
business trans-formation effort.

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Opportunities provided by digital
• Customer service and service design
– Customer insight
– Adding value
– Interfaces with customers
• Business and organisational processes
– Automation
• Business models
– Digital at the heart of the business opportunity
– Adapting the business to a digital opportunity

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Where does digital transformation
occur?
• Customer experience and service design.
• Customer insight.
• Adding value.
• Interfaces with customers.
• Business process.
• The business model.
• New business where digital is at the heart of the
opportunity.

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Framework for transformation
• The process of review
– Looking at where the digital opportunity is
– Confidence about the digital opportunity
– Leadership grasp of digital
– Maturity of digital
• The process of strategy
• The process of resourcing and planning
– Design of transformation
– Programme of change

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Framework for transformation
(Continued)
• The process of deployment
• The process of living with and evaluating
digital transformation

At this review stage, the organisation probably needs to

look at four issues:

• What the digital opportunity is.

• How sure the organisation is of the opportunity.
• What level of digital the leadership of the organisation
possesses.
• How mature as a digital business the organisation sees
itself.

• Historic models of strategic thinking have been questioned by

some as being stuck in a mindset more akin to the later 20th
century and from times when the competitive environment
was more predictable – perhaps from pre-Internet times.

• There are concerns that relying on models of thinking from

times when there wasn’t the same pressure from innovation
or speed of change is highly dangerous.

• The development of a digital transformation strategy can

borrow some of the relevant features of strategy development.
There some key themes that seem to occur regularly in
successful digital strategies.

Once the roadmap for digital transformation is complete,

there are two things that the digital transformation project
has to give thought to:

• the design of the transformation;

• a programme for change.

• The traditional method of planning the deployment and

implantation of a digital transformation project could be
undertaken in the same way as any project where
change has to be implemented.

• Digital provides interesting opportunities to explore

deployment in different ways, particularly when one
looks at adapting to digital culture itself.

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The process of living with, and evaluating,
digital transformation
Evaluation will review the issues raised in the initial stages
of the project:

• Did the transformation grow the business with existing

customers or new customers?
• Did it generate the forecasted or expected revenues and
what revenue can we forecast or expect?
• Did it create the value that customers wanted?
• Has the organisation been able to scale up the
opportunity from a small idea to a much larger
proposition?

• Growth hacking is an approach to improving the

commercial results from online services through
structured testing and optimisation of marketing
approaches.

• Growth hacking (also referred to as ‘agile marketing’ and

‘growth marketing’) is used to boost awareness and lead
generation and conversion.

Stage 1: Reach.
Stage 2: Act.
Stage 3: Convert.
Stage 4: Engage.

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How to use a single metric to run a start-
up
Generally, there are four main reasons why start-ups
should focus on a single metric:

• It answers the most important business question.

• It forces the team to draw a line in the sand and have a
clear goal.
• It forces the entire company.
• It inspires a culture of experimentation (see Figure 10.3).

1. Transactional: Someone buys something.

2. Collaborative: Someone votes, comments or creates
content for you.
3. SaaS: Someone uses your system, and the value they get
means they don’t churn or cancel their subscription.
4. Media: Someone clicks on a banner, pay-per-click ad, or
affiliate link.
5. Game (and many free mobile apps): Players pay for
additional content, time savings, extra lives, in-game
currencies and so on.
6. App (and many fee or paying mobile apps): Players pay
for additional content, time savings, extra lives, in-game
currencies and so on.

• Mindset is extremely important. Growth hackers focus on

accelerated growth on a minimum budget. It’s all about users
(or an alternative KPI, depending on your business).
• Being curious and creative are key elements. Don’t get
fixated on spending a particular budget, go back to basics and
think about tapping into human behaviour (we’re social
animals).
• The internal culture is important. The business needs to be
open to experimentation – some ideas will fail.
• A good (Pi-shaped) team is required. Marketers with a
broad base of knowledge in all areas, but capabilities in both
‘left-brain’ and ‘right-brain’ disciplines, are needed. They are
both analytical and data-driven, yet understand brands,
storytelling and experiential marketing.

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Use of Scrum, an agile methodology,
in digital marketing
Scrum is an agile framework for effective team
collaboration on complex and adaptive problems, mainly
used for software development.

There are three core roles within a Scrum process:

1. Product Owner (voice of the customer).
2. Development Team (responsible for delivering activity in
increments).
3. Scrum Master (the team leader, who acts as a buffer
between the team and any distracting influencers).

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Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
Developing agile marketing
campaigns
• Programmatic marketing is automated bidding on
advertising inventory in real time, for the opportunity to
show an ad to a specific customer in a specific context.

• A good ‘rule of thumb’ is to use a marketing 70:20:10

rule:
 70% of your marketing should be planned activity;
 20% of your marketing should be automated marketing that
responds to various actions of the user (such as
programmatic marketing );
 10% of your marketing should be entirely agile – reacting to
news and events as and when they happen.

• Web analytics Techniques is used to assess and improve

the contribution of digital marketing to a business,
including reviewing traffic volume, referrals, clickstreams,
online reach data, customer satisfaction surveys, leads
and sales.

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Principles of performance
management and improvement
• Performance management system is a process used to
evaluate and improve the efficiency and effectiveness of
an organisation and its processes.
• Performance measurement system is the process by
which metrics are defined, collected, disseminated and
actioned.
• Design for analysis (DFA) The required measures from a
site are considered during design to better understand
the audience of a site and their decision points.
• Digital marketing metrics Measures that indicate the
effectiveness of Internet marketing activities in meeting
customer, business and marketing objectives.

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Stage 1: Creating a performance
management system
 Performance is measured primarily through information on
process effectiveness and efficiency.

 Many of the barriers to improvement of measurement systems

reported by respondents in Adams et al. (2000) also indicate
the lack of an effective process. The barriers can be grouped
as follows:
• senior management myopia – performance measurement not
seen as a priority, not understood or targeted at the wrong
targets – reducing costs rather than improving performance;
• unclear responsibilities for delivering and improving the
measurement system;
• resourcing issues – lack of time (perhaps suggesting lack of staff
motivation), the necessary technology and integrated systems;
• data problems – data overload or of poor quality, limited data for
benchmarking.

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Copyright © 2019, 2015, 2011 Pearson Education, Inc. All Rights Reserved
Stage 2: Defining the performance
metrics framework
Chaffey (2000) suggests that organisations define a measurement
framework that defines groupings of specific metrics used to assess digital
marketing performance. He suggests that suitable measurement
frameworks will fulfil the following criteria:

A. Include macro-level effectiveness metrics.

B. Include micro-level metrics.
C. Assess the impact of the digital marketing on the satisfaction, loyalty
and contribution of key stakeholders.
D. The framework must be flexible enough to be applied to different forms
of online presence, whether business-to-consumer, business-to-
business, not-for-profit or transactional e-commerce, CRM-orientated
or brand-building.
E. Enable a comparison of the performance of different digital channels
with other channels.
F. The framework can be used to assess digital marketing performance
against competitors’ or out-of-sector best practice.

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Stage 3: Tools and techniques for
collecting metrics and summarising
results
• Site-visitor activity data is an information on content
and services accessed by e-commerce site visitors.
• Log-file analyser is a separate program, such as
Webtrends, that is used to summarise the information on
customer activity in a log file.
• Page impression is more reliable measure than a hit,
denoting one person viewing one page.
• Unique visitors: individual visitors to a site measured
through cookies or IP addresses on an individual
computer.

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