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This work was previously published in Global Electronic Business Research; Opportunities and Directions, edited by N. Al Qirim, pp. 319-347, copyright 2006 by IGI Publishing (an imprint of IGI Global). 1276 Copyright © 2009, IGI Global, distributing in print or electronic forms without written permission of IGI Global is prohibited. Chapter 4.18 Intelirel’s Transition to E-Business: Optimizing the Combination of Electronic Data Interchange and the Internet Nir Kshetri The University of North Carolina at Greensboro, USA Satya Jayadev The University of North Carolina at Greensboro, USA EXECUTIVE SUMMARY Intelirel is a U.S based multinational corporation that produces a variety of items with apparel as one of the business divisions. This case provides an overview of Intelirel’s transition to electronic business (e-business) of its apparel division. The company introduced the Electronic Data Inter- change (EDI) technologies in the mid-1980s. Before starting the implementation of e-busi- ness technologies in the late-1990s, the company conducted extensive surveys to assess the attrac- tiveness and convertibility of its various market segments. The analysis of the surveys indicated that a strategic imperative for the company is to optimally combine EDI and the Internet so as to UHDSWKHEHQH¿WVRIERWKWHFKQRORJLHV ORGANIZATIONAL BACKGROUND ,QWHOLUHOLVD86EDVHGGLYHUVL¿HGFRPSDQ\ZLWK operations in over 50 countries. The company has apparel as one of its main business divisions. Intelirel manufactures and markets about three dozen apparel brands worldwide. They include basic, non-fashion apparels in various categories. The company employs different channels of distribution to sell its products. In some cases, it directly sells to the consumers through its 1277 Intelirel’s Transition to E-Business factory outlet stores and the Internet. Its mass- market channel includes well known retailers in the global market. Being a manufacturer and marketer of high- quality products, Intelirel has priced its products higher than most of its competitors. The company thus competes on product differentiation such as higher quality fabric, well known brand names, and a variety of styles provided to the custom- ers. Table 1 provides additional information about the strengths and weaknesses of Intelirel as well as opportunities and threats facing the company. :HEULHÀ\GLVFXVVWKHPLQWKLVVHFWLRQ Strengths:%HLQJDGLYHUVL¿HGFRPSDQ\ZLWK worldwide operations and a large customer base, Intelirel can enjoy economies of scale and scope in its operations. Another major strength of the company includes its focus on quality products and services to meet customer expectations. Competing on quality rather than price is of paramount importance in the new economy. Still another strength of the company is its proactive ,7GHSDUWPHQWWKDWKDVSODFHGEXVLQHVVEHQH¿W creation as its mission. Thanks to competent and experienced staff in the IT department, Intelirel KDVEHHQDPRQJWKH¿UVWIHZFRPSDQLHVLQWKH industry to incorporate new innovations in stor- age, networking and security in its system. Weaknesses: In terms of global competitive- ness, U.S based apparel companies fall behind their home textile counterparts. The latter groups have stronger brand names and better inven- tory-management programs (Lloyd, 2000). The industry-level brand problems are worsened by ,QWHOLUHO¶V¿UPOHYHOZHDNQHVVHV1RWZLWKVWDQG- ing its focus on quality, there are several apparel brands that are more well known than Intelirel’s Table 1. Intelirel’s online apparel business: A SWOT analysis Sources: DiMartino (2000, p. 41); Tedeschi (2004); Interviews with an e-business manager at Intelirel; and au- thors’ research Strengths Weaknesses • Competent IT personnel. 'LYHUVL¿HGFRPSDQ\ZLWKEXVLQHVVHVLQDQXPEHU of segments. • Product differentiation as selling propositions: better quality fabric, more styles and more choice. • Worldwide operations. • Huge customer base. • Company’s focus on quality services and meeting customer expectations. • Not strong brand name. • Disintegrated e-business model. • Products priced more than its competitors. • Lack of product awareness among the target segments. Opportunities Threats 3RVVLELOLW\RI,QWHUQHW¶VXVHLQUHGH¿QLQJFXVWRPHU expectation. $YDLODELOLW\RI³UREXVWUHOLDEOHDQGXVHUIULHQGO\ color correction” on the Internet. • Apparel industry: one of the fastest to adopt e- commerce technologies. • Clothing: among the top 3 products bought online during the holiday season of 2004. • Market attackable from upscale brands. • Powerful big retailers as major customers. 1278 Intelirel’s Transition to E-Business EUDQGV$ODFNRIVWURQJEUDQGHTXLW\LVUHÀHFWHG in its brand awareness level which is lower than VRPHRILWVFRPSHWLWRUV$¿QDOZHDNQHVVFRQFHUQV Intelirel’s lack of integration across its business divisions (e.g., apparel and various non-apparel businesses). Since each division has its own e- business system, such disintegrated model has hindered the realization of potential economies of scale and scope. Opportunities: The Internet has additional Y L U W X HI RU ¿ U P VL Q W KH D SS D UHO L QG X VWU \ DY DLO DEL O LW \ RI³UREXVWUHOLDEOHDQGXVHUIULHQGO\FRORUFRU- rection” (DiMartino, 2000, p. 41). These features KDYH UHGH¿QHG FXVWRPHU H[SHFWDWLRQV LQ WKLV industry. Research has consistently shown that apparel is among the top few products in terms of online sales. Threats: $VXUYH\FRQGXFWHGE\*UHHQ¿HOGLQ July 1999 indicated that 56% of the respondents would not buy apparel online because of the con- cern about not being able to touch and feel (Kelly & Andersen, 2000). The proportion declined to 41% in December 1999 but it is still a substantial proportion (Kelly & Andersen, 2000). Although apparel is among the popular online categories, some big retailers have discontinued online sales of this category. To take one example, Wal-Mart discontinued selling clothing online since 2001 mainly because of high handling costs associated with merchandise returns (Merrick, 2003). As we mentioned earlier, there are other brands that are more well known than Intelirel. The company is thus susceptible to threat from other well known and more upscale brands. Another threat concerns its dependence on powerful retail giants. Some of them are likely to develop their own brands. $VLWZLOOEHFRPHFOHDUVKRUWO\¿UPVLQWKH apparel sectors faced intense competition from retailer giants to adopt electronic data interchange (EDI) 1 technologies in the 1980s. Although Intelirel had assimilated the EDI technology by the mid-1980s, the company was relatively slow in integrating the Internet-based e-business technologies. The company failed to realize the importance of a full-blown e-business strategy until 1998. A number of factors contributed to Intelirel’s slow start in moving into the Internet. First, like many big companies that have invested in private networks such as EDI, Intelirel concentrated on utilizing the existing technology in a better way. Rob Unger, director of electronic billing and payment at NACHA (http://www.nacha.org/) argues: 7KH>FRPSDQLHV@ZKRGLG(',LQWKH¿UVWSODFH — the Wal-Marts, Sears …are going to continue WRWU\WRPD[LPL]HHI¿FLHQF\ZLWKLQWKHLUSULYDWH networks. (Electronic Commerce News, 2002, p. 1) Second, like many big companies (e.g., Ghosh 1998), Intelirel was slow to realize the importance of integrating the Internet in the business strategy. Intense competitive pressure forced the company to consider combinations of EDI and the Internet. Like many vendors (Radosevich 1997), Intelirel started searching new ways to marry the two technologies: EDI and the Internet. Given several limitations of conventional EDI including high costs associated in responding to customers, experts have argued that EDI must be combined with e-commerce on the Internet, or other measures directed towards enhancing customer services (e.g., McAtee, 1999). Nonetheless, to produce a given combination of differentiators (e.g., advertising, promotion, e-commerce, customer ser- YLFHVHWFGLIIHUHQW¿UPVFKRRVHGLIIHUHQWOHYHOV of involvement with each technology (Spralls, 2001). This case examines how Intelirel moved into the realization of optimum combination of the two technologies. SETTING THE STAGE 7UDG LQJUHODW LRQ VK LS EHWZH HQ WZR¿U PVLVDI XQF- WLRQRIWKHGHJUHHRI³¿W´EHWZHHQWKHWHFKQRORJLHV used by them or what Ford et al. (1998, p. 24) refer 1279 Intelirel’s Transition to E-Business WRDV³WHFKQRORJLFDOGLVWDQFH´0DMRUUHWDLOHUJL- ants such Wal-Mart, Sears, and JC Penney have HPSOR\HG(',LQDZLGHVFDOH7KHVH¿UPVKDYH forced their suppliers such as Intelirel to do busi- ness with them via EDI in order for the latter to remain competitive and be in business. Thanks to such pressure, the apparel industry has employed EDI technologies since the 1980s 2 . Intelirel was one of the early adopters of EDI in its industry. The Internet’s advent has, however, changed the rules of the game. In addition to the retailers, apparel manufacturers such as Intelirel are facing FRPSHWLWLYHSUHVVXUHWRUHGXFHWKH³WHFKQRORJLFDO distance” with their customers that are becoming increasingly technology savvy. Consider some of the trends in this industry. As early as in 1998, DSSDUHOZDVWKH¿IWKELJJHVWFDWHJRU\LQWHUPV of online sales 3 . In spite of a small percentage of total apparel sales, Internet apparel sales showed double-digit growth in the U.S. for 1999. Online apparel purchases in the U.S. increased from $1.1 billion in 1999 (Kuntz, 2000) to $3.5 billion in 2000 (Vickery & Agins, 2001). An estimate of the Jupiter Research suggested that online sales of apparel increased by 42% in 2003 to reach $4.7 billion or about 2.3% of total apparel sales (Mer- rick 2003). During the 2004 holiday season cloth- ing was one of the top three dominant items for online buyers (Tedeschi, 2004). Some estimates suggest that in developed countries like the U.S., over 17% of apparel sales will take place online by 2010 (Newbery, 2004). 7KH,QWHUQHWRIIHUVVHYHUDOEHQH¿WVWREX\HUV and sellers in the apparel industry 4 . Consumers can use Internet-based models employing online FXVWRP¿WWHFKQRORJ\WRWU\RQFORWKLQJ 5 . Apparel products are better suited for interactive online presentation than other popular online items such as books or travel (Vigoroso, 2001). Leaders in apparel industry such as Lands End as well as less well known retailers have been extensively employing such technologies. For instance, many of the styles offered by Eshakti.com, a marketer of Indian style clothes, can be customized online :LOOLDPVRQ&RQVXPHUVFDQDOVREHQH¿W from the availability of clothing and apparel news, trends, and fashions. From the marketers’ perspective, new technologies such as digitized color approval have eliminated many sample steps required in the apparel chain, increased color ac- curacy and reduced costs (DiMartino, 2000). For instance, Tr ue Internet Color technology launched by E-Color ensures that image colors remain the same in all types of monitor or browser (Bobbin, 2001; DiMartino, 2000). Online apparel sellers, however, are required to consider several structural uniqueness of this industry. First, being a time sensitive merchan- dise, clothing is subject to increasingly shorter consumer buying life cycles. A clothing trend used to last six months to a year until a few years ago. Today, the trend has been reduced to six to twelve weeks before it fades. Second, WKDQNV WR DSSDUHO ¿UPV¶ LQWHJUDWLRQ RI ,7 WKH bar on customer expectations has been raised in this industry (DiMartino, 2000) and all apparel manufacturers are facing pressure to adjust their business processes to account for the changes in customer expectations. There are, however, several limitations in sell- ing apparel products over the Internet. First, the apparel industry is characterized by inconsistent VL]LQJDFURVV¿UPVZKLFKFUHDWHVSUREOHPVUHODWHG WR¿WRUFRPIRUWOHYHOLIFXVWRPHUVEX\RQWKH,QWHU- net (Carr 1999). Second, many apparel marketers have not integrated color technologies. It is thus GLI¿FXOWIRUFRQVXPHUVWRJDXJHFRORUDFFXUDF\ For these reasons, purchase returns for apparel products bought on the Internet are estimated in the range of 25 to 50% forcing a number of apparel companies to pull back on their Internet ambitions in the early 2000s (Vickery and Teri, 7KLUGVRPHEHQH¿WVGLVFXVVHGSUHYLRXVO\ cannot be realized if online sellers fail to consider customer demand for site usability. For instance, customers that have narrow-bandwidth Internet FRQQHFWLRQVFDQQRWEHQH¿WIURPLQWHUDFWLYHDQG multimedia design solutions that require high 1280 Intelirel’s Transition to E-Business bandwidth Internet access. An analyst of the For- UHVWHU5HVHDUFKDUJXHV³'HVLJQHUVDUHVWDUWLQJ to realize that if the customer cannot accomplish his goals, the designer cannot accomplish his” (Vigoroso, 2001). Given these limitations, apparel manufacturers cannot rely solely on the Internet. Moreover, com- petitiveness in the new Internet-based economy is a function of an appropriate integration of various upstream and downstream supply chain management technologies such as e-procure- ment and Vendor Managed Inventory (VMI) (Scannell, Vickery, & Droge, 2000). Intelirel has incorporated the latest supply chain management technologies such as VMI; and Collaborative Planning, Forecasting and Replenishment in its business strategy. As it will be clear shortly, these technologies have improved its inventory management, forecasting and replenishment. These technologies have provided the company IRUPRUH HI¿FLHQW SURGXFWLRQ IDFLOLWLHV WKDWDUH L QFU H DVL QJO \À H[ L EOHD Q GU H VSR QVLYH W RL WVU HWD L OH U¶V needs. These technologies have also accelerated WKH ÀRZV RI JRRGV VHUYLFHV DQG LQIRUPDWLRQ 7KHVHWHFKQRORJLHVKDYHDOVRHQDEOHG¿UPVOLNH Intelirel to gain quicker access to point of sale data on consumer purchases and therefore make more informed stocking and ordering decisions. Before the implementation of e-business solu- tions, Intelirel customers were placing their orders either using EDI technology or by more traditional FKDQQHOVVXFKDVSKRQHID[RUPDLO0RUHVSHFL¿- cally, the customers in the mass market channel placed their orders to Intelirel divisions using EDI technologies. Most small-order customers, on the other hand, used phone, fax, or mail. Arguably the biggest mistake in incorporating e-business efforts in a company is to consider it DV³WHFKQRORJ\SOD\VUDWKHUWKDQEXVLQHVVPRYHV´ 5LINLQ.XUW]PDQS0DQ\¿UPV that have jumped on to the Internet bandwagon ODFNFOHDUO\GH¿QHGHEXVLQHVVYLVLRQV3XWGLI- ferently, e-business is just a technology play for VXFK¿UPVDQGWKH\UXQWKHULVNRIEHLQJIXUWKHU margi nal ize d. Fi r ms th at conside r e -busines s as a strategic business move to change their business SRVLWLRQVRQWKHRWKHUKDQG³GRLWULJKWRUGRQ¶W do it at all” (Rifkin & Kurtzman, 2002, p. 93). Intelirel’s transition to a full-blown e-busi- ness was more like a business move rather than a technology play. The company did not consider failure as an option. When the e-business initiative for Intelirel was started, a survey was conducted with its non-EDI customers to assess their con- vertibility to e-business domain. The analysis of survey data superimposed with the company’s position revealed the following: • The Internet has the potential to improve communications and services to customers, which are needed to drive sales growth. • The company is required to assimilate the Internet in every business function including advertising and promotion, distribution and market research. • The survey indicated that conversion of the non-EDI customers into e-business custom- ers must be the top priority at Intelirel in RUGHUWRHQKDQFHRSHUDWLRQDOHI¿FLHQF\DQG to gain competitiveness 6 . • The 650 top customers that accounted for more than half of the company’s non-EDI sales volume should be targeted as the near term strategic focus for the companies’ e- business initiatives. The mission critical activity of transforming Intelirel’s non-EDI customers to e-business chan- nel began in 1999. To receive orders, the company has designed separate systems for EDI and the Internet-based e-businesses. Nonetheless, the company processes orders in one single system. Such arrangement has allowed the company to account for the inherent differences between the standards of EDI and the Internet technologies as well as to produce synergistic advantages. 1281 Intelirel’s Transition to E-Business CASE DESCRIPTION Early researchers in e-commerce predicted that the FRPSHWLWLYHQHVVRI¿UPVLQWKHQHZ,QWHUQHWEDVHG HFRQRP\LVDIXQFWLRQRIWKH¿UP¶VFDSDELOLW\WR use an optimum combination of e-commerce and EDI technologies (Benjamin & Wigand, 1995; Malone, Yates, & Benjamin, 1987). Although EDI is prohibitively expensive for small and medium sized enterprises (SMEs), this claim still holds true IRUODUJH¿UPV%LJ¿UPVOLNH,QWHOLUHOWKXVULVN losing business with smaller suppliers/customers if they rely only on EDI technologies. Radosevich (1997) argues: Despite the costs, EDI can be extraordinarily cost- effective for very large companies such as Sears, Roebuck and Co., Wal-Mart and General Motors Corp., which act as hubs for their thousands of suppliers. However, the suppliers, or “spokes” in EDI parlance, don’t necessarily see the same EHQH¿WV1RWWKDWWKH\QHHGWRLIVSRNHVGRQ¶WVXE- mit to hubs’ demands to conduct business by EDI, they lose the business…. [In EDI] the transmission charges are expensive, but the returns ….remain unmeasured. Rapid changes in fashions and requirements of retailer have forced apparel manufacturers to drastically reduce the time taken by their products to reach the end customers (Haar & Reyes, 2002). Many large companies have set up EDI-based stock-replenishment systems which allow them to send sales and inventory data to suppliers and DXWRPDWLFDOO\UHRUGHU³KRW´LWHPV5DGRVHYLFK 1997). Such mechanisms are critical to the produc- ers of apparel, perfume and accessory products (Carroll, 2003; Haar & Reyes, 2002). EDI also dramatically decreases error rates (Radosevich, 1997). EDI however has some limitations related to rigidity and costs, especially for SMEs. Appropri- ate combination of EDI with the Internet allows companies to exchange information in the value chain as well as to access customer preference information (Kaufman, 1997). Companies that have a Web-enabled supply chain management solution integrating internal systems and external systems are thus likely to win in the game of the new Internet-based economy (e.g., Hill, 1999; McIvor & Humphreys, 2004). As mentioned earlier, apparel has been one of the biggest sectors in the U.S. retail industry 7 and among the fastest to adopt e-commerce technolo- JLHV,QWKLVLQGXVWU\HI¿FLHQF\LQWKHGLVWULEXWLRQ FKDQQHODQGRQOLQHDQGRIIOLQHRUGHUIXO¿OOPHQW are keys to success in today’s economy. Internet- EDVHG FRPPHUFH DQG (', KHOS ¿UPV DFKLHYH such goals. EDI and the Internet have become two big- gest sources of sales for Intelirel. EDI constitutes over two-thirds of the sales orders, followed by HEXVLQHVVDERXWRQH¿IWKDQGWKHUHPDLQLQJLV by phone and fax. Strategic uses of Web-based technologies at Intelirel has provided the company with the necessary edge over their competitors and attracted new customer segments. The com- pany regularly tests its Web sites for security, usability, and performance. The company has also devised a performance metrics system for its Web site 8 . To manage its Internet advertis- ing and to improve key brand metrics, Intelirel developed a strategic partnership with a major provider of media, technology and services. Intelirel has also chosen a color communication system developed by a reputed color technology provider in the industry. EDI $VPHQWLRQHGHDUOLHU,QWHOLUHO¶VWRS¿YHFXVWRP- ers use EDI to transmit orders to the company. These customers send thousands of orders a day making EDI the most valuable tool in terms of generating sales volume at Intelirel. The volume of these transactions make EDI the best choice, as the data feed is automatic and there is no need for human interference in placing these orders. 1282 Intelirel’s Transition to E-Business Intelirel runs the EDI interface four times a day and thus sends order acknowledgments within a few hours of placing those orders. E-Business As discussed previously, the Internet has provided WUHPHQGRXVRSSRUWXQLW\IRU¿UPVLQWKHDSSDUHO industry to better serve their markets and increase customer satisfaction. E-business is becoming increasingly popular at Intelirel. The company has been using the Internet in a number of activi- ties including marketing and sales. The company started off by creating Internet portals to accept and process orders. The number of Intelirel cus- tomers using this system is increasing rapidly. Intelirel thus restructured its operations to integrate e-business technologies in its business strategies. The company has already converted a VLJQL¿FDQWSURSRUWLRQRILWVQRQ(',FXVWRPHUV to the e-business entity. Many of these customers could not have afforded EDI technologies. IntelirelOne, the consumer division, uses e-business mainly to reach the end-consumers directly through its Web site. The company also uses this channel to advertise its new products and alert the customers on the latest closeout prices and special promotions. Before the existence of this system, closeout prices were conveyed over phone to the biggest distributors and the stock was sold based on the price offered by those distribu- tors. Following the launch of this new system, anyone interested in the company’s products can get such information via the IntelirelOne Web site. Although retailers and distributors also have direct access to this closeout stock, as they can access the information, end-consumers are more likely WREHQH¿WE\GLUHFWO\SXUFKDVLQJDSSDUHOSURGXFWV with Intelirel. The IntelirelOne We b s i t e a l s o h e l p s FXVWRPHUVWR¿QGWKHQHDUHVWIDFWRU\RXWOHWVWRUHV of Intelirel; order products online with the com- pany; track shipping; request Intelirel catalogue, download discount coupons for Intelirel products that are in promotion, and so on. Phone/Fax Customers This is a gradually diminishing segment of Inte- lirel’s customers. As Intelirel is embarking upon various Internet strategies, the focus has been to convert these customers to electronic means of engagement. Intelirel has provided a number of incentives to convert these customers to move to their e-business entity. These include Web-based discounts, free stock tracking, and so on. Vendor Managed Inventory (VMI) 9 As we mentioned earlier, Intelirel has several big retailers as its vendor partners. Exchanging information creates a unique synergy that pro- YLGHVEHQH¿WVWRERWKSDUWLHV,QWHOLUHOKDVEHHQ DPRQJWKH¿VWLQWKHLQGXVWU\WRDGRSWVRPHRIWKH specialized supply chain services. For instance, Intelirel manages the inventory of some of its retailer customers through its Vendor Managed Inventory (VMI) program. VMI enables suppli- ers to reduce costs related to production, inven- tory and transportation (Attaran, 2004). VMI is FULWLFDOLQDQHQYLURQPHQWFKDUDFWHUL]HGE\³OHVV SUHGLFWDEOHGHPDQG´DQG³OHVVIRUJLYLQJEXVLQHVV models” (Sedlak, 2000, p. 81) and in an industry in which logistics has been found to be an important problem (Smailes, Sapienza, Bullock, Kehoe, & Lewis, 1998). The company also works with the vendors in the implementation of CPFR (Collaborative Plan- ning, Forecasting, and Replenishment). Intelirel believes that standardizing the industry’s ex- changes of pertinent information, such as sales and order forecasts, will continue to remove cost from WKHVXSSO\FKDLQDQGLQFUHDVHRYHUDOOSUR¿WDELOLW\ By exchanging information such as forecast and replenishment data with their vendor partners through the Web site, the company ensures that they have the right item in the right place. Put GLIIHUHQWO\&3)5WHFKQRORJLHVKDYHIXO¿OOHGWKH company’s needs in creating fast and accurate forecasts for thousands of combinations of styles, 1283 Intelirel’s Transition to E-Business FRORUVVL]HDVZHOODVUHWDLOHUV$IWHUWKH¿UVW weeks of implementation, the company realized a 2% improvement in retail store in stock, a reduc- tion of 14% in store-level inventory compared to a 32% increase in sales, and an increase of 17% in retail turns on the pilot items. Likewise, CPFR implementation with a major retailer customer in the women’s underwear and hosiery category resulted in sales increases by 45% and a decline in weeks-on-hand inventory by 23% 10 . Expectations of the Customer The advent of e-business has drastically increased customer expectations in terms of quick and timely delivery (Dan, Dias, Kearney, & Lau, 2001; Franklin, 2001; Sedlak, 2000; Swaminathan & Sridhar 2003). At the same time, the Internet has created tremendous opportunities for compa- QLHVWRSUR¿WDEO\UHGH¿QHFXVWRPHUH[SHFWDWLRQV (Hamel 2001). According to an e-business manager at In- telirel, the company marks quality services and meeting customer expectations as the epitome of e-business transactions. For the retailers, who always depend on the distributors for a better price, Intelirel’s e-business solution is a boon. Most of the company’s small customers have eliminated intermediaries in their transactions with Intelirel as there is more visibility and contact with the manufacturer. The ability to check the prices and order on Intelirel’s Internet portal has facilitated their direct interaction with the distributors. Customers also want to know the status of their orders after it is placed via phone, fax, and mail. Customers now have the ability to track the status of their orders on the Internet. The second important requirement would be the knowledge of new products and promotions released by Intelirel. Due to the large volume of customers, it becomes tedious to alert their entire customer base. Hence, some smaller customers are unaware of the promo- tions or new products offered by Intelirel. Some of the customers want to know the inventory of DVSHFL¿FSURGXFWEHIRUHSODFLQJDQRUGHUIRUWKDW product. Finally, the customers want to order at their own preferred time instead of ordering when the service representatives are available. Even after faxing the orders, they were required to call the customer service personnel to verify the orders as the fax copy of the orders gener- ally tend to be illegible. Intelirel has been able WRVROYHWKHVHSUREOHPVDQGIXO¿OOWKHFXVWRPHU expectation through their e-business strategies. Some medium sized customers wanted to place their orders through EDI, but want to know the status of the orders using the Web site(s). Intelirel also has been developing its e-commerce tools to satisfy customer demands. Order tracking has been one of the new features that have been added. Customers can now track the status of their order as soon as the order is placed. Customer intelligence enables Intelirel to better understand its customers (i.e., lifetime YDOXH GHPRJUDSKLFV SUR¿WDELOLW\ SUHIHUHQFHV tendencies, etc.) so that the company can more effectively acquire, retain, service, and/or cross- sell those customers to meet strategic business objectives. For example, by analyzing the pattern of products that Intelirel received in its e-business RUGHUVWKHFRPSDQ\LVPDUNHWLQJDVSHFL¿FVHW of apparels for their customer base in Texas. The company found that the demographics presented better opportunities for a particular line of prod- ucts. In essence, customer intelligence marries decision support tools with database marketing and customer relationship management (CRM) practices and products. Intelirel sees a huge market opportunity to deliver products being proactive in the competitive market. Also, an important aspect of this e-business strategy is correlating customers’ online behavior with the purchasing activity. If the e-business tools can provide information as to which Web pages or sequence of pages drives purchases and which FDXVH³GHDGHQGV´LWFRXOGHQKDQFHWKH³IRFXVHG´ marketing efforts and increase customer response. E-business should always complement other busi- . 36(2), 25-29. OECD (2002). Electronic commerce and SMEs, ICT and electronic commerce for SMEs: Progress report. Working Party on Small and Medium- Sized Enterprises and Entrepreneurship, Geneva,. commerce: Structures and issues. International Journal of Electronic Commerce, 1(1), 3-23. This work was previously published in Global Electronic Business Research; Opportunities and Directions,. or electronic forms without written permission of IGI Global is prohibited. Chapter 4.18 Intelirel’s Transition to E -Business: Optimizing the Combination of Electronic Data Interchange and