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E-business: Strategy, skills and careers issues


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Title: E-business: Strategy, skills and careers issues

E-businessStrategy, skills and careers issues
  • Dr Jonathan Reynolds
  • Oxford Institute of Retail Management
  • Saïd Business School Templeton College
  • University of Oxford

  • What do we mean by e-business skills?
  • Trends in in demand and supply
  • Understanding eBusiness skills needs the example
    of the retail sector

The rationale
  • ICT as a major driver of economic growth
  • Development of new products and services
  • Productivity improvement in existing tasks and
  • Concerns about e-skills an important element of
    policy at all levels of government
  • Supply of properly qualified people seen as
    lagging behind demand
  • One perceived contributor to the extent of
    outsourcing/offshoring being undertaken

A definitional reminder
  • E-skills often interpreted as ICT skills -
  • ICT skills
  • Basic/advanced/professional (OECD)
  • User/practitioner (e-Skills Forum)
  • eBusiness skills
  • Strategic in nature
  • skills needed to exploit business opportunities
    provided by ICTs
  • Contribute to development of new products
    services and business efficiency improvements
  • Our interests focus on ICT professional

Sources RAND Europe e-Skills UK, 2005
But just what are eBusiness skills?
  • Few attempts to qualify/quantify specific set of
    skills (RAND Europe)
  • Agreed that need to go beyond pure technical
  • Business, creative and technical skills partially
    learnt in
  • Business studies, commerce, multimedia,
    multimedia, information systems, fine art,
    librarianship, journalism, film studies,
    photography . (Irish Expert Group, 2000)
  • Useful?
  • Those skills needed by
  • Internet business strategists
  • Internet-dependent professionals (IDC/EITO,

Shortage, gap or mismatch?
  • Shortage (recruitment need)
  • Not enough people to perform ICT/eBusiness jobs
  • Gap (retraining need)
  • Competence shortfall amongst ICT professionals
  • Mismatch (curriculum need)
  • Difference between observed and expected ICT
    professional competences
  • A dynamic workforce
  • New developments require new skills
  • Periodic curricular updates required to remedy
  • CPD needed to mitigate skill gaps

Sources European e-skills Forum, 2004
Origins destinations of IT graduates
  • Overestimation of skills needs in 2000 (Internet
  • Graduate entry into the IT workforce fell by 36
    between 2000 and 2002
  • The slowdown affected Computer Science less than
    other subjects
  • But the recruitment of graduates into
    professional roles is still higher for non CS
    subjects than for CS
  • Also gender issues
  • How does this hold for e-business occupations?
  • More recent evidence?

Source e-Skills UK, 2005
Supply UK and Europe
  • ICT skills and skills gaps have ample attention
    in the UK (RAND Europe, 2005)
  • Nordics and UK have highest proportion of
    professional e-skilled employment
  • European curricular concerns (CEDEFOP, 2004)
  • Lack of common definition of skills and skill
    levels relevant for employment
  • Lack of qualification definitions/levels relevant
    to ICT
  • Few common approaches to skill training
    standards and assessment/certification
  • No way to validate training

Computer professionals as of employees
Demand UK
  • 65,000 vacancies amongst 41,000 establishments
  • 34 of establishments (15,000) finding these
    vacancies hard to fill
  • 9 business units in the UK reported skills gaps
    (ie retraining need)
  • Focussed on development/implementation skills
  • This constitutes only 3 of all ICT professionals

The example of the media sector
  • During the first Internet boom, there weren't
    enough talented, skilled people because it was
    such a new industry, but then the reality was
    that clients knew nothing anyway. You could put
    someone with one or two years' experience in
    front of them interactive was easy to blag.
    (Tribal DDB)
  • "Clients now have six, seven or eight years'
    experience in interactive media, so if you put a
    junior person in front of them, then the skills
    gap becomes clear very quickly. (Tribal DDB)
  • Chronic shortage of skilled people
  • Hiring outside digital arena

The example of the retail sector
  • 1980 Tescos Shopping Information Service,
  • 1987-8 Teleshopping Consortium
  • 1995-05 - Oxford Retail Futures Group
  • 2000 Marketspace technology monitoring
  • 2002 Retail technology scenario planning
  • 2004 Retail IT project management research
  • 2004 IT and retail productivity research
  • 2005 Retail technology roadmaps

Retail attitudes towards ICT in the 1990s
  • Retailers are conservative
  • Are adapters rather than innovators
  • Use ICT to support existing operations
  • As a result it confers little competitive
  • But can raise rudimentary barriers to entry

Source CEC/IRS, 1992
Retail attitudes towards ICT in the 1990s
  • Successful retail ICT for many
  • doesnt involve long term RD
  • provides visible financial benefit
  • no extensive capital commitments
  • low risk, staged implementation
  • Exceptions for a few
  • Use IT to deal with large, strategic issues
  • Use IT to seek integration
  • Undertake their own RD
  • Use IT to enable a new strategic mission
  • Who were the few?

Source CEC/IRS, 1992
Lack of innovation?
General retailing
Food retailing
European E-Business Scoreboard 2004. Index for
the e-business intensity in four categories A
Connectivity of the enterprise. B ICT use for
internal business process automation. C
E-procurement and supply chain integration. D
E-marketing and sales.
Source DTI, eBusiness W_at_tch, 2005
Major achievements
  • For all the technologies weve seen developing
    over the past 25 years, the two that were really
    embraced by retailers were the introduction of
    the barcode and point-of-sale terminals (Retail
    Week, 2005)
  • So where do we go from here?

  • Risk averse retailers?
  • Scale, cost and complexity of transformational
    technology projects
  • Organisation of IT investment
  • Project management problems
  • Lack of training
  • Customer need?
  • Lack of products delivering genuine and
    measurable customer benefits

(1) Scale and complexity of transformational ICT
  • Aging technology investment and aging stores are
    the primary limitations to productivity (US
  • We celebrated our 30-year anniversary this year,
    and so did our systems. It means that the system
    is capacity-constrained, things that you do are
    not particularly sexy, and also you cannot do
    many things you want to do. (UK non-food
  • At any one time we may be actively considering
    between 75-150 technology-related projects across
    the business (UK mixed goods retailer)

Source OXIRM, 2004
(2) Organisation of ICT investment
  • The companies I looked at in the UK tended to
    have the in-house IT departments because it was
    seen as being a key competitive advantage. In the
    US, the systems companies tend to develop retail
    company systems more generally which then every
    retailer took up. It would appear that internal
    IT capacity was not seen by US retailers as the
    key competitive advantage hence everyone became
    efficient at the same rate. In the UK, on the
    contrary, retailers had to replace their systems
    at different speeds and thus have different
    systems capabilities and they retain in-house IT
    systems which may be extremely costly. (US
    non-food retailer)

(3) Project management
How are UK retail projects doing?
Source OXIRM, Computer Weekly, 2004
(4) Training in the retail sector
  • Only 34 of those working in retail are qualified
    at Level 3 or above (compared with 52 of the
    whole economy).
  • At management level, 13 are without any
    qualifications at all (75,000), while only 22
    are at Level 4 and above (compared with 39 of
    the whole economy)
  • Key skill needs
  • Customer services
  • Management and leadership
  • Information technology

(5) Lack of products delivering genuine and
measureable customer benefits
  • Theres a lot of it out there
  • 22,000 screens being used for promotional
    purposes by UK retailers (POPAI)
  • were still writing the book on this. Most
    (retailers) still have more questions than
  • There is a continuing need to
  • sell the benefits, not the product, to create
    more interesting interiors and captivate
    shoppers attention. (review of Multi-channel
    trade show)
  • To what extent do we still see solutions in
    search of problems? E.g. 3G

(5) Lack of products delivering genuine and
measureable customer benefits
  • How come not much of the wizardry in
    non-customer facing technology has made its
    appearance in front of customers? As usual, we
    have been short-changed with a lacklustre series
    of electronic knick-knacks (Bernard Dooling,
  • What does the customer want?
  • E.g. Self checkout
  • Today, I confront 40,000 items in my grocery
    store -- and I get nowhere near Amazon.com-like
    levels of help when I walk in the door. The first
    retailer, producer, or marketer who figures out
    how to do this cost effectively has me, and my
    self-directed, price-insensitive, high-margin
    brothers and sisters, for life. (Andrew Zolli,
    Foresight Strategist, FMI Washington, 2005)

The Few Tesco.com
  • First trialled in 1996
  • 577mn 2003/4 turnover (29) (401mn H10506)
  • 65 online market share
  • 28mn profit (21mn H10506)
  • 270 outlets
  • 96 population
  • 170,000 orders per week
  • Average customer spend 7 over past three years
  • Range extension
  • Multichannel data insights

The Few Argos
  • Leading UK general merchandise catalogue store
  • Low cost/value positioning
  • 2004 3.3bn sales (12) 297mn profit (23)
  • 561 stores, multi-channel
  • 13,000 products in main catalogue (17k Argos
  • 2/3 households collect catalogues from stores
  • 34 mn catalogues produced per year (2 issues)
  • Argos Direct 20 sales (including 2.6mn telephone

High level of system process integration
  • Early adopter of ICT
  • Website launched 1995
  • SMS service launched 2002
  • Argos Direct home shopping infrastructure
  • UPS Supply Chain Management solution consolidates
  • 15,000 full vehicle loads (comp up to 55,000 part
  • Delivers to 1 in 7 UK homes
  • Gains from supply chain initiatives re-invested
    in lower prices, which are down 5 per cent on
    last year.

Vodafone Live!A new way to browse our catalogue
on the move
Click and CollectReserve items at your local
store online!Shop online at argos.co.uk and you
can either - Order for home delivery, and pay
online. - Reserve items at your local store,
and pay in store when you pick up your order.
         Text and take home
What does the future hold?CIES CIO IT
Priorities, May 2005
  1. Improving Business Processes
  2. Gaining Competitive Advantage
  3. Demonstrating Value of ICT Projects which help
    Drive Business Growth
  4. Cost Control
  5. Faster Innovation

Management Information Systems
  • Data fusion
  • Extracting meaningful data from multi-sensor
  • Data standardisation, especially at the product
  • Data mining
  • Information management
  • Reward and loyalty schemes
  • Customer profiling and scoring
  • Personalisation
  • Intelligent agency

  • Imaging Intelligent CCTV
  • Self-learning systems
  • Theft prevention
  • Customer/employee monitoring and tracking
  • Trajectory analysis
  • Brain Science
  • Improving awareness of social behaviours
  • Brain scanning, neuroeconomics and
  • Beware the cognitive paparazzi

Design simulation and modelling
  • Store design layout
  • Immersive visualisation and 3D design
  • Customer flow modelling
  • Realtime walkthroughs
  • Layout optimisation
  • Promotional placement
  • Energy efficiency
  • Store environment simulation

Security e.g. biometrics
  • Incremental
  • Employee access control to stores, time and
    attendance at work
  • Management of customer records, control of fraud
  • Significant
  • Voice recognition, bank transaction
    authorisation, electronic point of sale, secure
    operation of ATMs
  • Sustainable, differentiating market offerings
    e.g. Fully Automated Seamless Shopping/Travel

Source Heracleous Wirtz , 2005
  • Impartial advisory role
  • Standards development
  • Costs vs payback modelling
  • Innovation by suppliers to match industry needs
  • E.g. Digital receipt technology
  • E.g. Locational positioning logistics
  • Dissemination of best practice for both large and
    SME retailers
  • RFID and the consumer

Pervasive computing
  • The creation of environments saturated with
    computing and wireless communication, yet
    gracefully integrated with human users
  • wearable and handheld computers,
  • high bandwidth wireless communication
  • location sensing mechanisms
  • Swiss Army Knife vs Wallet approach
  • Social economic drivers of ubiquitous computing

How do we decide upon need?
Source Christine Cuthbertson, 2003
  • What do we mean by e-Business skills?
  • How do we tackle gender inequalities and
    shortages, gaps and mismatches?
  • What are the evolving needs of existing
  • Dont forget entrepreneurship
  • Sector-specific insights and futures
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