Global Information Systems
Global Information System Strategy
(CIS8000)
ASSIGNMENT 4
Name: Wu Rong
ID: 1091105225
Table of Contents
1: INTRODUCTION5
2: ANALYSIS OF BUSINESS CHALLENGES6
2.1: Taobao current status6
2.1.1: Taobao infra structure6
2.1.2: Profit model9
2.2: Taobao business challenge10
2.2.1: Competitor challenge10
2.2.2: Internal challenge11
2.3: Business challenge analyzing13
2.3.1: Organization Analyzing13
2.3.2: Management analyzing17
2.3.3: Technology analyzing18
2.4: Summarize information systems requirements20
2.5: Summarize solution20
3: CROWDSOURCING IN Taobao21
3.1: Importance of Crowdsourcing21
3.1.1: Crowdsourcing definition21
3.1.2: Crowdsourcing in Taobao21
3.1.3: Business opportunities and benefits from crowdsourcing22
3.1.4: Problems of crowdsourcing22
3.1.5: Future of crowdsourcing22
3.2: Strategy of crowdsourcing22
3.2.1: Reason why the organization should invest in crowdsourcing22
3.2.2: key area where crowdsourcing can impact in business23
3.2.3: The risks and how to be mitigated in crowdsourcing23
3.2.4: Requirements and measurement of crowdsourcing initiative23
4: CONCLUSION24
REFERENCE25
Table of Figures
Figure 1-Taobao home page5
Figure 2-Infra structure7
Figure 3-Transaction process7
Figure 4-Searching & Browsing8
Figure 5-Selling connection8
Figure 6-Payment8
Figure 7-Receive and Feedback9
Figure 8-Taobao organization13
Table content
Table 1-Competitors10
Table 2-Operation department13
Table 3-Promotion department14
Table 4-Extension division14
Table 5-Customer service department15
Table 6-Technology department15
Table 7-Logistics department16
Table 8-Customer order commissioner16
Table 9-Picking commissioner16
Table 10-Taobao technology event19
1: INTRODUCTION
Figure [ 1 ]-Taobao home page
This project selected a Chinese e- trade website www.taobao.com , which is designed for online shopping for every normal person anytime. It is similar to eBay, but it was found in May 10, 2003 by Alibaba Group, which is late for around 3 years than eBay. Initially Taobao marketplace focuses on C2C (customer to customer) and B2C (business to customer), now it extended to Groupon, Retail sell, Vendue and so on. Especially in the C2C, Taobao provides the smaller platform for smaller businesses which include Chinese and Foreigners. The seller can sell the new or second used goods. Now Taobao is the E-commerce leader in China. Depends on the IResearch (it is a famous internet analytic organization), Taobao held over 80% E-commerce marketplace in China. Until the end of 2009, there are 170 million registered members and it is increasing now. The sum of business transaction is around 34 billion USD in 2009, and after one year, it changed to 67 billion in 2010. There are thousands of branding businesses and manufacturers which provide “one station” service for businessman and customers. At the same time, Taobao also provides the services such as cancel the orders in 7 days and return back the integral points for the customers. What is difference between Taobao and eBay is that members will feel easy to communicate in transaction using a trade manager software called “ Taobao wangwang”. After user registered, the name can be used both Taobao website and “Taobao wangwang”. When the costumer get in one online shop and the boss is also online at that time, the software will remind the customer to chat to boss. The customer also can review the chat history and the boss details in “Taobao wangwang”. Taobao sticks to “Open, Collaboration, Flourishing” and the integrity. Taobao provides more job opportunities, until 2009, almost1 million people get the job from the Taobao though opening one online shop directly, this facilitated the logistics, payment and marketing to make 2.28 million jobs indirectly.
2: ANALYSIS OF BUSINESS CHALLENGES
B2C(business to consumer): which is a business model which the business or transactions conducted directly between a company and consumers who are the end-users of its products or services. The reason why B2C business is better than the B2B is that company can refers to commerce between two or more businesses in B2C model. This is the famous business model in the past year business. C2C(customer to customer): hich is an innovative business way which the customers can buy the product or service from the other customers. The goodness of C2C is that is provides the environment in which the customer can do the business face to face. C2C is famous nowadays in the e-commerce. Alipay: Alipay ( www.alipay.com ) ( 支付å®) is a third-part online payment platform which found in 2004 by jack Ma which is the CEO of Alibaba Group, Alipay trend to provide “simple, safe, quick ” online payment solution for Chinese e-commerce. There are over 700 million registered accounts as of the end of 2012. Alipay also corporate with more than 100 fanancial institutions including Visa and Mastercard to provide payment solutions for Taoba and Tmall as well as more than 460000 Chinese businesses. 2.1: Taobao current status
Taobao’s main market is B2C and C2C platform. Now there are over 1 billion members in Taobao and Tao mall (Tmall). They provides quickly, safely and convenient shopping experience and 100% quality products. For getting better sale credit, Taobao provides return back products after-sale service in 7 days without reasons, bills and shopping cash points. 2.1.1: Taobao infra structure
Taobao uses four big parts in their business parts, which includes B2C&C2C internet based selling platform, Associated payment system Alipay, Transportation and checking received & feedback. The four parts have been showed below.
B2C &C2C internet based selling platform
Checking received & Feedback
Transportation
Associated payment system Alipay
Figure [ 2 ]-Infra structure
Selling Platform-Transaction Process:
Taobao is using membership system, so Taobao just provides the services for registered member. Otherwise, Taobao provides the “Alipay” to help finish the business and increase the credit. This is the transaction process to use Taobao for normal user below:
Receive and feedback
Pay in Alipay
Connect to seller
Searching & Browsing Products
Figure [ 3 ]-Transaction process
Searching & Browsing Products
Four ways to searching & browsing products:
Advanced searching
Normal searching
Top 10 channels
Products category
Figure [ 4 ]-Searching & Browsing
Connect to seller
The easy and simple way to search is Normal searching. The user just need to key in the product name and click the enter button. For the advance searching, there are a lot of critical to choose, such as price range, seller credit, new or second hand, payment way and so on.
Leaving a message in shop
Leaving a message in product
Message instation
Taobao wang wang
Figure [ 5 ]-Selling connection
Fixed price product
Check and confirm bill
Pay in Alipay
Auction Product
Figure [ 6 ]-Payment
Receive and feedback
Feedback
Confirm received product
Figure [ 7 ]-Receive and Feedback
When you log in Taobao, there is a “Real Name Authentication”. In the Authentication, there are some conditions for the new registered members who must over 18 years old, he also should show the valid certificates (such as IC, trading certificate, power of attorney).Specially in December in 2003, Taobao get the corporate with “IC checking service” which is belong to police, so Taobao can check the name and the IC number from the police online system. 2.1.2: Profit model
Trade commission:
Trade commission is the main profit in most C2C websites, because C2C is just a platform for both seller and buyers to do business. But for the first three years, Jack Ma decided that it is free for the business transaction. Because the first three years is the beginning for Taobao, the Free method will let the Taobao increase much faster than the other competitors. Advertising revenue
Taobao website likes the big super market in the real life, there are many customers who often come here and view the goods, so result are the popularity, click rate and a large of customers. That will let many companies come here and post Ads. This advertising revenue is the biggest profit part now in Taobao. Home page gold bunk
When the user come the website, the first page which they saw is the home page, so there are much “gold bunks” in the home page, the good shops will buy the “gold bunks” to show the goods and get much money than the others. The “gold bunks” can be fixed price or auctioned for the interested customers. Extra services
Now Taobao is not only providing a platform, but also providing the extra trade services. Because there are many shops here, the customer how to find and what is the result arrange. So the Taobao will arrange the ranking depends on the service fee which the customer paid. 2.2: Taobao business challenge
Although Taobao is great to develop, there still are many business challenges which come from the inside and outside. The Taobao should create new strategies including organization and management. Also Taobao should improve the technology part because Taobao is a website business. 2.2.1: Competitor challenge
The normal challenge comes from the competitors who are doing the B2C and C2C platform. Below shows some competitor in B2C or C2C: Website(B2C)| Found time| Main product| Open offline service| Dangdang| 1999.11| Comprehensive| No|
Joyo| 2000.1| Comprehensive| No|
Ctrip| 1999| Ticket and hotel book| Telemarketing|
Jingdong Mall| 2004| 3C product| No|
Beidou mobile web| 2000.5| Mobile phone| Franchise Alliances| Cloud network| 1999| Card and game product| Offline service marketing| Newegg China| 2001| IT, digital product| No|
Red child| 2004.3| Baby product| Catalogue sales|
MaiNet| 1993| Stylish women product| Catalogue and shops sales| Colorful valley| 1999| Adult product| No|
China interactive publishing| 2000.7| Books| No|
99online bookshop| 2004.3| Books &DVDS| Direct selling| Table [ 1 ]-Competitors
Although these websites just do one part or some parts of B2C, they are not the real competitor now, but most websites like Jingdong Mall are focus to the general merchandise. If they can connect to the middle and small company, and they focus one part of B2C. They can spend much money on that part, Taobao will lose many quotient in this part in the future because they are much professional in their part.
On the C2C platform, there are two big competitors which are Baidu and Tencent. They are the leaders in the internet in china for a long time. And couple years ago, they have already focus on C2C, so they have the resources (human resources, money and market) to open this area. In Chinese market, Alibaba and Baidu are striving for the middle and small customers in both e-commerce and searching engine. The need of the middle and small customers are popularization and market. Now the Baidu and Taobao satisfied the customers’ need, but they still compete the new internet area. For the Tencent, which is the biggest internet leader, the market almost includes all part in the real life. Because the QQ (the biggest instant social messenger), almost all of Chinese are using them. The young generations of Chinese use QQ every day, even in mobile. So once Tencent focus on the all parts on C2C, and the Taobao keeps on this situation now, Taobao will lose much market quotient. 2.2.2: Internal challenge
There are three kinds of customers depend on the C2C business: Direct shipment
The customers buy your product directly or serve the customer directly. Business challenge in Direct Shipment:
* Stock: if the same product has low mobility, there will be a overstock problem, especially in the seasonal product like the clothes. * Photos: the seller will spend much time and energy to take photos, because in the Taobao, the first thing the customer saw is the products’ photos. If the quality of the photos is not good, the sales volume will be decrease. Middle customers
The persons who receive the products from company and sell them to the customers. Business ACC3042 energy management accountingchallenge in Middle customers:
* Ads on the website: sometimes open the sellers’ websites, the Ads will popup out many Ads which made by the sellers, this will difficult to let the customers stop view the products at that time. At the same time, this will decrease popularity of Taobao. * Hot sell products need pay to Taobao: to increase the quotient, the buyers of Taobao will show their products on the prominent position though buy the positions from the Taobao server. So the better product which the seller didn’t buy the prominent position will be ignored. This will cause the asymmetric of information. * Weakness of logistics: China is quit big, for the developed area, it is easy to get the logistics quickly. But for the secluded area, there are few logistics’ point, this will affect the logistic strategy. At the same time, Taobao has cooperated with many logistics companies, so the serve quality will be difficult. Once the customer there are some problem in logistics, the customer will drop the online shopping habit. The Taobao quotient will be decrease. * Lock constraints of sellers: the seller may post the information of products which the products have finished already. So the customers give the order, then the seller told the customer that this kind of product has stock out. This will lose the trade failed. * No online server: the customer just can find the answer from the phone or help central, this will cause discommodious in instant messenger. the cheating may cause between sellers and customers. For example: in 1th October, a customer bought a game account, because he didn’t pay attention to the deal, he has been cheated by the seller, but he has been paid the money. Internal customers
Internal customers are inter-coordination person in the company. The management of the internal customers will affect the middle customers and the direct shipment directly. Normally, the company just pays attention to the Direct and Middle customers and ignores internal workers. They don’t know the internal employees are also the property of the companies, it is easy to lose them just because the market is competitive all time. In Taobao, we can notice that the employees can buy the cheaper and high quality goods though the internal ways, but some employees can’t buy the better product just because their position is low. On the other hand, if there is a cheating things, the news will be blocked, the customer can’t know these information.
2.3: Business challenge analyzing
2.3.1: Organization Analyzing
Below here is the simple organization structure of Taobao systemEvent planning commissioner Commodity operating specialist
Order specialist;
Picking commissioner;
Finance; HR; executive
IT systems
Customer service specialist
Promotion specialist
Online shop business commissioner
Graphic design specialist
Logistics support group
Operating guarantee group
Front fighting group
Figure [ 8 ]-Taobao organization
Department| KPI(key performance indicator)| KPI criterions| Operational Department| Online Shop Commissioner| PV: independent visitors quantity| | | Average of visitor quantity for one person|
| | Deal quantity|
| | Deal transaction|
| | Volume of transaction|
| | Average total view time for one person|
| | Unit price (Volume of transaction/ total person)|
Table [ 2 ]-Operation department
Department| KPI(key performance indicator)| KPI criterions| Promotion Department| Promotion Specialist| UV: independent visitors| | | Receive rate: page received times / Ads show times|
| | Average UVcost: Unit cost / Unit UV quantity|
| | Order transaction ROI: Unit cost / orders quantity|
| | New increase UV quantity|
Table [ 3 ]-Promotion department
Department| KPI(key performance indicator)| KPI criterions| Extension Division| Event Planning Commissioner| Average click rate: total clicks quantity/UV quantity| | | Event order rate(one day): promotion event orders/total orders| | | Event volume of transaction(one day): event order volume of transaction/ order volume of transaction| | | Event order transaction: promotion customer quantity/UV quantity of visitors| | | ROI: total money/event cost|
Table [ 4 ]-Extension division
Department| KPI(key performance indicator)| KPI criterions| Customer Service Department| Customer Service Commissioner| Response time| | | Response to customer UV quantity|
| | Service attitude|
| | Negative comment times|
| | Consult transaction(one month ): UV quantity of success received money/ received UV quantity*100%| | | Total deal of transaction rate(one month): personal deal of transaction/average deal of transaction of customer service department| | | Rate of return of goods:Number of return order/number of consult transaction| | | Rate of exchange of goods:Number of exchange order/number of consult transaction| | | Rate of return money: UV quantity of return money/ UV quantity of received paid| Table [ 5 ]-Customer service department
Department| KPI(key performance indicator)| KPI criterions| Technology Department| Graphic Design Commissioner| Design Time rate: depends on the designed time| | | Passed rate: depends on the rate of project passed|
| | Design record: designed pages and photos which described carefully| | | Planned reached rate: depends on the designers finished the planned jobs| Table [ 6 ]-Technology department
Department| KPI(key performance indicator)| KPI criterions| Logistics Department| Commodity Operating Specialist| Stock out rate| | | Dull sale rate|
| | Average of dull sale rate|
| | Stock exchange rate|
| | Product stock structure|
| | Daily report of work|
Table [ 7 ]-Logistics department
Department| KPI(key performance indicator)| KPI criterions| | Customer Order Commissioner| Order accuracy rate: (missed orders + wrong orders)/ total orders| | | Bill accuracy rate|
| | Imperfection rate(one month): number of imperfect products/ total deal products| | | Products packing rate|
| | Order delay rate(one month): times of order delayed / times of all orders| | | Logistic bill Mistake rate|
| | Product information timely response|
Table [ 8 ]-Customer order commissioner
Department| KPI(key performance indicator)| KPI criterions| | Picking Commissioner| Received product accuracy rate: depends on number of unit received product| | | Bar code mistake rate|
| | Product position mistake rate|
| | Sorting speed|
| | Stock waste rate|
Table [ 9 ]-Picking commissioner
There are many small departments in Taobao in upon big departments. So the collaboration of these departments will become much harder. For the sellers’ stock, there is no issue to control the products stock of the sellers in Taobao. The customer can’t know the sellers’ stock information. For decreasing the risk, the sellers will get the orders from the customer first, then they will get the product from the company, this will cause the delay of goods received by customers. Because the C2C is the new internet area, there will be much weakness in C2C websites, the departments may be not integrated. As mentioned before, Taobao didn’t provide online customer servers to help the customer solve problems. What the customer can do is that call the server central, this will cause the time wasted. The customers may loss the patience to continue buy product or service from Taobao. Sellers and the customers are the biggest part of Taobao. So the Taobao departments should pay attention to the connection between Taobao internal departments and sellers. Spend much energy to the check sellers that whether they can pass all criterions of Taobao. 2.3.2: Management analyzing
To improve Taobao website management, maintain and facilitate internal information exchange. Taobao like the normal company, it has its own rules for the employees and the whole company. There are some aspects of the employees’ management rules below: * Personnel regulations
* Salary and bonus
* Personnel management
* Employee hiring rules
* Holiday rules
* Resign, refuse and fire right
* Administrative management
* Phone using rules
* Check in
* Rewards and punishment
Taobao will record the product and the shops information to the information systems to let the employees analyze these data to find problem and improve the company. Although Taobao has big management system, there are still some business challenges. These challenge will require Taobao improve themselves as soon as possible. As mentioned before, the low quality photos of products, especially in the “gold bunks”, this kind will cause the sellers lose money and reputation. This is the Taobao management bugs because Taobao didn’t help the seller to check the quality of products’ photos, this also is not responsible for the customers. The biggest problem is that Ads occurs on the online shops’ pages. This requires the Taobao to increase the management department to control the shops quality though check the shops in a period time. Because the complex logistic company cooperation, they small logistics company will get more problem when sending the product to the customers. Taobao didn’t have the strategy and rules to choose logistics company, this will cause some orders or product missed. The customers can’t receive the products. There are some internal employees who dissatisfied that different employees can get the different information of products, this is not fair for everyone. Taobao should change their management manners in internal structures. 2.3.3: Technology analyzing
C2C website is the most important part in Taobao, so the information system needs a large number of IT employees to help maintain and update the new technology. The table 10 shows the Taobao website developing history.
Time| Event|
V1.0 (2003.5-2004.1)| LAMP; MySQL Proxy|
V1.1 (2004.1-2004.5)| Transfer MySQL to Oracle;Import SQL Relay| V2.0 (2004.2-2005.3)| Transfer PHP to Java;MVC framework WebX;Project manage tool: AntX;Import searching engine: ISearch| V2.1 (2004.10-2007.01)| Transfer Weblogic to jboss;Support branch warehouse data access framework;Remove EJB;Import Spring;Based on BDB buffer memory;Build CDN| V2.2 (2006.10-2007.12)| Distributed memory IFS;Distributed buffer memory Tair;Update the searching engine| V3.0 (2007.12-now)| App transparent and scalable * Session framework * High performance service framework HSF * Message system Notify * Business central builtData transparent and scalable * Distributed data level TDDLStability * Disaster recoveryCost * Automation * Transfer data to MySQL| Table [ 10 ]-Taobao technology event
Information system is biggest part of Taobao, so checking the information is necessary for company and customers. What we have seen is that how Taobao integrated their own company information system, but they ignore the sellers checking. The sellers post their Ads on home page of the online shops, especially in the “gold bunks”. When the customer get in the shops, there are so much unwilling Ads in the home page, this cause the customer don’t want to view the product anymore. At the same time, Taobao is an open platform for everyone to open online shops, but there is no reliable checking system to check the products and the information of sellers. The sellers can easy to sell the illegal things or low quality product. For example, in these days, the police found that there are some shops post the normal things on the website, but they actually sell the guys in the off lines. 2.4: Summarize information systems requirements
The Taobao need the ways to check the seller information, the product quality, product details and the sellers’ shops. Get the information from the feedback from user and logistics. Make sure that the employees can share the same information of products to decrease the employees’ dissatisfaction. 2.5: Summarize solution
As the problems described upon, there are some advices for Taobao: * Build the department that its main job is to connect different department, get this information daily and upload the central system to let the employees view. Then the department will make some changes to cooperate with other departments * Add extra system to checking the sellers’ and the products’ detail information. * It should be considered that choosing server main logistics company to do the logistic. Make sure that the logistic company is table and responsibility to all customers no matter how remote places. * Improve the after service to decrease the cheating manners and build the after service points in every city in China. * To get more competitive with Ebay, Taobao can separate several levels sellers to let different customers can easy find what they want to buy. * For the products’ photos, Taobao should have their own detailed mechanisms requirements. Let the photo quality becomes more reliable. * Provide E-mail marketing service: when the seller received the order, the seller told the customer the date of sending product .
3: CROWDSOURCING IN Taobao
3.1: Importance of Crowdsourcing
3.1.1: Crowdsourcing definition
Crowdsourcing is that a crowd of people contribute their service, ideas or content to one project, especially come from the online community nowadays. With WEB2.0 providing the greater interaction among the online person, traditional crowdsourcing was out already. For example: the Wikipedia provides the platform for the normal user to ready and edit the information. Make the content becomes perfect. 3.1.2: Crowdsourcing in Taobao
C2C is a virtual platform to provide business opportunities, so there is a credit problem between sellers and customers. Taobao find one way to solve this problem, they pass the credit to the customers to decide. This is the biggest application of Crowdsourcing in Taobao. Another kind of application is the feedback to products, the customer write down the feedback below the product depends on the experience of products. Taobao shop credit-crowdsourcing
After customer bought a product, he/she has one time opportunity to evaluate the shops. There are three kind of evaluation: good; normal; bad.
Evaluation point: if good: +1; if normal: +0; if bad: -1.
Credit degree: the point will be accumulated according to customers’ evaluation. Period of validity: in 15 days after business succeed.
Taobao will give the credit levels for shops: there are 3 main kinds levels: highest is Crown (10001-20000), second level is Diamond (251-10000), the lowest level is Star (4-250). In each level, there are five small levels. The “normal” and “bad” evaluation can be changed or canceled in one month, but every month the customer has one chance to change or cancel the evaluation.
3.1.3: Business opportunities and benefits from crowdsourcing Credit is the foundation of shop no matter in the real shops or the virtual shops, and Taobao use the crowdsourcing in credit comment. Different level credit will get different ratification from customers. Good credit shops will get more customers, the volume of business will increase more than the low credit shops. In Taobao, if the credit level is high, the position will raise in the Taobao website and the position in the same level products; the shop page will get larger promotion position. So the credit is the same important with volume of business. At the same time, the feedback to the shops will tell the seller what they can do to improve the online shops. What should be change and how can be changed. 3.1.4: Problems of crowdsourcing
Although crowdsourcing is the tendency of C2C, there still some problem happened in the real business transaction. To get the Crown credit level, the sellers find the bugs of the websites or cheat to get this credit level. It will become difficult to know the shops are real or not. So the customer can be cheated by sellers. For the feedback, the commentator may give the evaluation to the shops maliciously. 3.1.5: Future of crowdsourcing
With development of social networking, the crowdsourcing will become more popular in communication between persons, and crowdsourcing will extend many aspects in the real life. C2C websites as the leader in the internet nowadays, that will create more opportunities of business. Crowdsourcing will let our life become more convenient and rich. 3.2: Strategy of crowdsourcing
3.2.1: Reason why the organization should invest in crowdsourcing In the early years, crowdsourcing get together some person to get the solution of one problem, because one person doesn’t have limited thinking and energy to finish one project. Crowdsourcing can integrate many advices into one work, so they can work out great project. Today, crowdsourcing has transferred mainly into the internet. Especially for the openly website (For example: WEB2.0 websites), the normal person can share their happy and distressed each other, or they can use their own mind to judge something on the website. That is the development direction of crowdsourcing now. 3.2.2: key area where crowdsourcing can impact in business
- Crowdsourcing can let the customers know more about the production from the other persons’ judgments. In Taobao website, the user can view the judgment from the other customers with experience. - Company can improve their business strategies to the market depends on the customers’ minds. Because the customer is the “god” of the company, what the customer thinking is the most information of a company. The company can change their strategies as soon as possible to control the market. - Crowdsourcing can let the team project becomes much better than the personal project. 3.2.3: The risks and how to be mitigated in crowdsourcing
There will be a cheating if crowdsourcing is the only judgment in business, for example: the website blocked the bad comment and leave the good comment. In Taobao, there are much cheating to get the customer credit in crowdsourcing. The customer can’t distinguish the real shops or cheating shops. For the feedback, the customers always judge shops maliciously. Le the great shops become bad. Taobao should design another criterion to judge the shops, for example: the credit also can be judged by the refund rate. If the refund rate is high, that means the shop is bad for customers. At the same time, the company should cooperate with the government to control the reliability of information. 3.2.4: Requirements and measurement of crowdsourcing initiative What the company needs are the IT persons who know how to develop a WEB2.0 website and the great management system. At the same time, the company should keep the data safety all the time. Crowdsourcing can be measured by trading volume and volume of transactions (first three months), also it can be measured by the customer feedback.
4: CONCLUSION
Although there are many challenges in management, organization and technology using crowdsourcing nowadays, the crowdsourcing is still the tending of the C2C website development. What we can do is that changing the strategy all the time depends on the marketing changing, the internal risks and the customer minds using the feedback.
REFERENCE
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