An e-business glossary

EIGHT AN E - BUSINESS GLOSSARY 215 EIGHT An e-business glossary An A-Z guide to the key e-business terms and their meaning. Adhocracy: A non-bureaucratic networked organization with a highly organic organizational design. Affiliate marketing: Pioneered by the likes of Amazon and CDNow, anybody with a website can sign up with them as a sales affiliate and receive a commission (typically 5%-15%) for any sales that are chan- neled through the affiliate site. Anoraknophobia: An exaggerated, irrational fear of computers and the Internet. It derives from ‘anorak,’ a term once used to describe a person with trainspotting tendencies but which has evolved to embrace people obsessed with technology. Bricks and mortar: Companies that use traditional methods of selling and distributing products. Browser: A software application that allows people to surf the web. Some of the most popular web browsers right now are Internet Explorer, Firefox and Safari. Business process re-design: This involves changing both organi- zational structure and processes to ensure that future customer needs can be anticipated and fulfilled in the most cost-effective manner. This is generally known as business process re-design. It should not be confused with crude cost-cutting exercises (such as downsizing) although many organizations have used both approaches simulta- neously, with the result that the value of process redesign has been permanently tarnished in the eyes of many managers. GURUS ON E - BUSINESS 216 Choiceboards: Interactive, online systems that let people design their own products from a menu of attributes, prices and delivery options. Clusters: Critical masses of linked industries in one place that enjoy a high level of success in their particular field. Famous examples are Silicon Valley and Hollywood but clusters can be found everywhere. According to Michael Porter, clusters can affect competition in three ways: 1. by increasing the productivity of companies based in the area 2. by driving the direction and speed of innovation in their field 3. by stimulating the formation of new businesses within the cluster. Source: Derived from an article entitled ‘Clusters and the New Economics of Competition’ by Michael Porter, Harvard Business Review, November–December 1998. Cluster geeking: The process by which devoted fans of anything from Dr Who to Lego bricks form internet communities to pursue their particular passion. Communities of practice: Groups that form within an organization, typically of their own accord, where members are drawn to one other by a common set of needs that may be both professional and social. Compared to project teams, communities of practice are voluntary, longer-lived, have no specific deliverable, and are responsible only to themselves. Because they are free of formal strictures and hierar- chy within an organization, they can be viewed as subversive. Competitive advantage: John Kay, following in the footsteps of Michael Porter, defines competitive advantage as: ‘The application of distinctive capability to a specific market place differentiating an organization from its competitors and allowing it to achieve above average returns in that market’. EIGHT AN E - BUSINESS GLOSSARY 217 Competitive convergence: This is what happens when companies are drawn towards imitation and homogeneity. The result is often static or declining prices and downward pressures on costs that compro- mise companies’ ability to invest in the business in the long term. Competitive intelligence: In a world of rapid technological change where new and sometimes surprising competitors can suddenly appear, a company’s success will increasingly depend on how effec- tively it can gather, analyze and use information. According to Larry Kahaner, author of a book on the subject, companies that can turn raw information into powerful intelligence will ‘build market share, launch new products, increase profits and destroy competitors’. Confusion marketing: A process described by the UK Consumer Association as the way in which some businesses are seeking to deny customers the means of making an informed choice by swamping them with an excess of confusing price information. The intention is clear – to make price comparisons with rivals impossible in practi- cal terms. The hope is that customers will give up in frustration and stay with, or move to, well-known companies or brands. Customers signing up for a mobile phone or obtaining a mortgage for a house purchase in the UK are facing confusion marketing tactics. Core competents: The small number of people in an organization who are absolutely vital to that organization’s success. Bill Gates has reflected that if 20 people were to leave Microsoft, the company would risk bankruptcy. In a study by the Corporate Leadership Council, a computer firm recognized 100 ‘core competents’ out of 16,000 employ- ees; a software company had 10 out of 11,000; and a transportation group deemed 20 of its 33,000 as really critical. Customer Relationship Management (CRM): A set of techniques and approaches designed to a provide personalized service to customers and to increase customer loyalty. Increasingly viewed as a strategic issue, and one that typically requires technological support. GURUS ON E - BUSINESS 218 Cyberspace: Term originally coined by William Gibson in his book Neuromancer. Now generally used to describe the notional social arena we ‘enter’ when using computers to communicate. Data marts: Scaled-down version of a data warehouse containing specific information of interest to a particular target group. Data mining: The process of using advanced statistical tools to iden- tify commercially useful patterns or relationships in databases. Data warehouse: A database that can access all of a company’s information. Discontinuities: One-off changes in the market place that force radical change, e.g. Amazon’s entry into the book market place. Disintermediation: Buzzword for how the internet is cutting out the middlemen, enabling wholesalers/manufacturers to sell direct to the end user. Classic potential victims of disintermediation are estate agents and travel agents. Domain name: Unique internet address used to identify a website, e.g. www.futurefilter.com e-business: Using the internet or other electronic means to conduct business. The two most common models are B2C (Business-to- Consumer) and B2B (Business-to-Business). Partly due to news coverage given to high profile companies like Amazon, B2C is the better known model; on the other hand, B2B is growing faster than its more glamorous cousin. e-by gum: A term to describe the quaint practice of sending a message via the traditional postal service using a sealed envelope. e-commerce: Commercial activity conducted via the internet. Ego surfing: Looking on the web for occurrences of one’s own name. e-lancers: independent contractors connected through personal computers and electronic networks. These electronically connected EIGHT AN E - BUSINESS GLOSSARY 219 freelancers – e-lancers – join together into fluid and temporary networks to produce and sell goods and services. e-tailing: Retail strategy based on selling and order processing via the web. e-zines: The online equivalent of print-based newsletters and magazines. Eyeballs: A measure of the number of visits made to a website. Globalization: The integration of economic activity across national or regional boundaries, a process that is being accelerated by the impact of information technology. Going dot.com: The trend that started in the US of leaving a well- paid job to join an internet organization. HTML: Abbreviation for Hypertext Markup Language, a computer language, the one that most web pages are currently written in. Infomediary: A company or individual that makes money by bridg- ing the gap between companies’ need for capture of detailed customer information and customers’ desire for protection of such informa- tion from exploitation by companies. Informate: Term coined by Harvard academic Shoshana Zuboff to describe the capacity for information technology to translate and make visible organizational processes, objects, behaviours and events. Intellectual capital: Intellectual material – knowledge, information, intellectual property, experience – that can be put to use to create wealth. In a business context, the sum total of what employees in an organ- ization know that gives it a competitive edge. The Internot: Business executives or organizations that see no value from getting online. The term was devised by psychologist David Lewis, who also coined the phrase ‘road rage” to describe when motoring frustration spills over. Research conducted by Lewis suggests that about half of all managers are Internots. GURUS ON E - BUSINESS 220 Intranet: A network designed to organize and share information that is accessible only by a specified group or organization. ISP: Abbreviation for Internet Service Provider, the party that connects users to the internet. Killer app: A new good or service that establishes an entirely new category and, by being first, dominates it, returning several hundred percent on the initial investment. Knowledge management: A system, normally computer-based, to share information in a company with the goal of increasing levels of responsiveness and innovation. It may be tacit (inside the heads of individual staff-members, and possibly including personal experience, intuition, belief and values) or explicit (what has or can be written down, including technical specifications, procedures, training manuals, financial and management information). Mass customization: Cost-efficient mass production of goods and services in lot sizes of one or just a few at a time as a matter of routine. m-commerce: David Potter, Chairman of Psion, predicts that elec- tronic commerce, today conducted largely via internet connected desk-tops will soon be overtaken by mobile (or m-) commerce using mobile phone technology. Meme: An idea, behaviour, or skill that can be transferred from one person to another by imitation. Examples include the way in which we copy ideas, inventions, songs, catch-phrases and stories from one another. In a wired global economy, memes will have the capability of spreading at astonishing speeds. Netiquette: A system of tacit codes encouraging members of the on- line community to uphold certain standards of behavior. Net generation: A term coined by Don Tapscott to describe the first generation – now in their early teens to mid-twenties – to grow up surrounded by digital media. EIGHT AN E - BUSINESS GLOSSARY 221 New capitalism: A term coined by Robert Reich, former US Secre- tary for Labor, to characterize how the chief assets of new economy companies are intellectual assets rather than traditional assets like machinery, buildings etc. One-to-one marketing: Customizing and personalizing a product or service to meet an individual’s specific needs. Out of the garage: A term for a young company that has just moved to its first real office. Portal: Web page that serves as a start-point or central directory for a range of internet services. Product overlap: This occurs when more than one generation of the same product is available simultaneously. For example, the original version of a piece of software may sell at a reduced price alongside the latest version at a higher price. Push technology: The delivery of news and multimedia information via the world wide web to personal computers on people’s desks. The Web is basically a ‘pull’ medium. Users decide what they want, point their browsers at the relevant website and then pull the designated pages back to their PCs. Silver surfers: A term used to denote older members of the popu- lation who are comfortable ‘surfing’ the internet for information and services. Spam: In a phrase, junk e-mail – unwanted messages sent to unin- terested recipients. Sticky content: The term refers to whether a website is alluring enough to ‘catch’ visitors as they go flying past. Until recently, most compa- nies have concentrated their website efforts on increasing the flow of traffic to their site. Companies are now realizing that the empha- sis needs to be less on attracting visitors on a one-off basis, and more on enticing visitors to stay, return again and even tell their friends. GURUS ON E - BUSINESS 222 Strategic Inflection Points: A term coined by Andy Grove to describe a moment in the life of a business when its fundamentals are about to change for better or worse. 10X force: Another term coined by Andy Grove to describe a super- competitive force that threatens the future of a business. Technology Adoption Life Cycle: Model created by Geoffrey A. Moore to demonstrate the various points at which individuals will become involved with a technological innovation. Moore identifies five key groups that will become involved with any new technology at various stages of its life cycle: 1. Innovators: the technology enthusiasts. 2. Early adopters: the visionaries. 3. Early majority: the pragmatists. 4. Late majority: the conservatives. 5. Laggards: the sceptics. Viral marketing: Releasing a catchy message, typically distributed online, with a view to the message reaching growing numbers of people, initially organically but then exponentially. Virtual organization: An organizational form representing a loose combination of technology, expertise and networks. VOIP: Short for Voice Over Internet Protocol, the means by which it is possible to make telephone calls using the internet rather than traditional landlines or mobile networks. World wide web: The set of all information accessible using comput- ers and networking. Xanadu: Computer scientist Ted Nelson’s planned global hypertext project, generally recognized as a forerunner of the web. Zombies: dot.com companies that are on their last legs, waiting for their cash-burn rate to kill off the business. 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EIGHT AN E - BUSINESS GLOSSARY 215 EIGHT An e-business glossary An A-Z guide to the key e-business terms and their meaning. Adhocracy: A. networked organization with a highly organic organizational design. Affiliate marketing: Pioneered by the likes of Amazon and CDNow, anybody with a website can sign