The Impact of Web Analytics on E-Commerce - Assignment Example

Name Course Instructor Date Table of Contents Name 1 Table of Contents 2 The Impact of Web Analytics on E-Commerce 3 Introduction 3 The impact of web analytics from a management perspective 4 The impact of web analytics from a technological perspective 7 The impact of web analytics from an organizational perspective 9 Conclusion 11 Works Cited 12 The Impact of Web Analytics on E-Commerce Introduction As the world grows to a global village, e-commerce has become more important now that ever. It has been identified by organizations as a vehicle through which they can generate revenues, strengthen customer relations and brands as well as a vehicle for ideas and information trade. Increased use of internet and improved IT infrastructure has been a major driving force in the adoption of e-commerce. The application of e-commerce by business is not only important but a necessity as well. Bearing the importance of e-commerce in the current business world, web analytics has not been without impact. Web analytics is defined as the measurement or assessment of website usage by the visitors and customers of that website with the aim of identifying the general visitor experience for the purpose of identifying the extent to which an organization’s objectives for setting up the website have been achieved (Peterson, p.12). Web analytics is also applied in the measure of the extent to which a company’s website complements its designed strategy. The information applied in the assessment is collected by following scientific procedures inclusive of testing, experimentation and measurement. When accurately determined and applied, such information is important in enhancing the achievement of organizational objectives and business goals (Peterson, p.14). The ultimate goal of web analytics is enhancing optimization of business success factors as indicated by generated results rather than the mere analysis of websites. This can only be achiever through the alignment of analysis and metrics with business vision and the strategic goals of the organization. Increasing importance of e-commerce in the current business world calls for organizations to seek for best measures to ensure that their application of e-Commerce is not only efficient, but relevant to target customers as well. This paper addresses the impact of web analytics from three perspectives namely; management, technological and organizational perspectives. The impact of web analytics from a management perspective Evidently, change is constant in many web applications. This creates the need to develop proper management of these applications so as to keep up with the changes. Research shows that they are numerous impacts on the use of web analytics on e-commerce with focus on a management perspective. According to Desbarats (P.3), the constant use of web analytics in e-commerce has forced many organizations to improve on their management background so as to lower operational costs involved while at the same time increasing revenue. Today, it is quite evident that web application management environment is complex due to web and content services being delivered to customers browsers from different sources. Cappel (P.117) maintain that, while various components are being delivered to end users data center, there are also delivered from “the cloud” and third parties which includes components such as ads, delivery network, new feeds e-commerce platforms and bill payment which require effectiveness within the management field. The use of web analytics on e-commerce have changed the face of management whereby companies are forced to acquire knowledge of whether the applications will; perform and render fully across different browsers, provide quality web experiences to all end users as well as scale under real word load and finally, whether the web analytic on e-commerce will meet all the set company performance benchmark objectives. Cappel (P.120) suggest that, the use of web analytics on e-commerce requires companies’ management to find as well as fix problems across the complete web application delivery chain prior to production and launching so as to have a successful web application. This largely requires establishing an “outside-in” approach that will ensure managers are able to get real tests result from an end user perspective across peak loads, end users browsers as well as locations. According to Pennington (P.62), web analytics on e-commerce have greatly impacted on management in that with improvement of technology, an organization management is required to develop way in which it educate its employees on using web data so as to establish a program that will enhance continuous testing ensuring future growth of the website. It is very critical that a company web analysis provide high valued training to companies’ management especially those that are practicing e-commerce in a manner which is consistent and efficient which translate to more operational and maintenance costs. To ensure that organizations remain as key in web analytic on e-commerce, it is necessary that management adapts a cross functional approach that will ensure organizations become data driven considering that change in web application is inevitable with main focus on e-commerce (Pennington, P.68). Web analytics on e-commerce are often interwoven into various application of management. Evidently, these elements can be augmented as well as complemented with various web links so as to separate and purpose build application of web analytics as well as business management. Pennington (P.69) maintain that, web analytics on e-commerce have enables organizational managers to understand as well as monitor customer preferences which in turn enhance strong customers and company relationships. According to Desbarats (P.6), various management applications usually come up with different predictive analytics so as to improve targeting and segmentation as well as other features which measures effectiveness of online marketing campaigns. Pennington (P.69) maintain that , web analytics on e-commerce have made organizational management evolve significantly right from their starting point which entails tracking mouse clicks on web sites. For instance, through evaluating various “buy signals” management can identify prospects likely to transact more revenue as well as identify those end users that are blogged down during a sale process and need assistance. By so doing, it is quite evident that managers are able to create a stable network between end users browsers, employee and the entire organization. Cappel (P.123) suggests that, web analytics on e-commerce largely forces web site managers to determine area of site which are more popular and those areas that are not visited by individuals. Therefore, managers are required to acquire knowledge that will enhance web site streamlining creating better experiences for end users. According to Desbarats (P.6), web analytics enhances customer relationship management since they are use to largely describe an automated methodology about an end user which in turn enables company managers make better decisions. Further, through customers’ web analytics managers are able to understand behavioral data as well as identifying various unique segments in a given customer based in which organizations can act upon. Managers are able to obtain information from customer web analytics on various market segments (Desbarats, P.6). Evidently, today use of web analytic on e-commerce can largely assists an organization to reach its desired goals. However, if there is no proper management these applications can damage a company brand image as well as reputation which translate to poor performance both in terms of efficiency and outputs. Cappel (P.122) suggest that, as management of web analytics on e-commerce increases, companies largely demands visibility into performance of call centers, support channels and call centers to ensure problems that can affect the organizational satisfaction levels are corrected. Further, both finance and marketing management personnel in e-commerce uses web analytics to greatly access the value of multi-faceted programs in general. It is therefore important that organizational management to have a good background on the various issues involving measuring as well as managing web analytics as this is considered to be critical to any e-commerce success (Roy, Marie Christine et al, P.390). The impact of web analytics from a technological perspective Bardhan et al, (2006, p.23) consider the IT infrastructure, IS adoption and IT investment as the main resources to be analyzed in e-commerce. In their view, Web analytics is important from a technological perspective since it describes the external and internal technologies that are relevant for the firm to secure a competitive edge in the current market. It is through measuring the value of existing technologies in the firm, their uniqueness and relevance against technologies available for adoption by the firm in the market place that the firm is able to select the most relevant hence reducing the probability of failure. Since different factors must be considered in determining the most relevant technology to apply at a given place and time, web analytics reports are essential to every firm exercising e-commerce. According to Choe (2003), the alignment of IT with business strategy is essential in enhancing organizational performance. Where such is done, the organization is in a better position to reap a competitive advantage over its competitors as it identifies its success rate and possible technological advancement. Web analytics in this case comes in when analyzing the firms IT and its suitability in the business strategy. Additionally, Choe (p.35) explains that the design quality of the website determines the intention of users continuing with its use. It is through web analytics that the suitability of the design as well as image quality from the customers’ perspective is determined. Since the primary goal of any firm is to reap maximum benefits, web analytics reports are important in enhancing user experience with regard to web design. Application of a design that is appealing to users translates to an increased frequency in the number of times the site is visited. Web analytics also impacts on e-commerce by increasing customer base through the use of web analytics results in addressing emerging issues in information sharing and changing customer needs (Wade et al, p.43). This reduces the possibilities of the organization presenting the wrong products to the customers. IT capability as explained by Nosek & McManus (2008, p.34) can as well directly impact on a firms internal capability including enhancement of collaboration among organizational stakeholders, improving resource utilization rate as well as enhancing organizational efficiency. Web analytics in this regard impacts on e-commerce in that enhanced collaboration through continuous improvement of communication ultimately results in reduced time wastage as well as the wastage of other resources (Nosek & McManus, p.23). In addition, relationships between sectors become better thereby eliminating existing traditional gaps between departments and functions. This places the organization in a superior firm performance position and competitive edge. Web analytics has been very essential in measuring the success of e-Commerce due to its reliance on communication theory. Internet in this case is the communication phenomenon being measured. It includes a measure of the effectiveness of a website to communicate to target customers or website users. According to Belanger et al (2006), effectiveness in communicating with target customers determines their intention to use the service hence the success e-Commerce (Belanger et al, p.23). If effective, the likelihood of a given customer purchasing a product increases. This is measured by accuracy and adequacy of information portrayed from the customer’s perspective. Lastly, web analytics provides an excellent opportunity in determining time and place for application of IT resources. This reduces possibility of wastage of such resources especially due to its ability in aiding selection and implementation of e-Commerce strategies. As such, a firm is in a position to determine the viability of IT standards in an increasingly changing technological world (Huizingh et al, p.22). When a firm’s IT infrastructure is easily useable, accessible and advanced, more customers may prefer its use. For instance, online transactions have attracted a wide range of customers in that customers can access information as well as make orders online. The comfort of accessing such services reduces time wastage which is of preference to many. It is through web analytics that a firm is able to determine the viability of installed IT resources and the time when such should be replaced with a more advanced IT infrastructure. This ultimately lowers organizational operation cost while increasing its output (Huizingh et al, p.27). Informational and transactional functions of the website as a result have a positive impact on e-Commerce. The impact of web analytics from an organizational perspective A website is simply created to attract users as a basis for values exchange. This makes customer behavior of importance in the success of e-Commerce. Web analytics reports generate this information which is then applied in determining customer experiences when interacting with the site. Benefits of web analytics accrue from addressing issues that negatively impact on user satisfaction (Piccoli et al, p.34). This is based on the idea that organizational benefits are to a greater extent determined by customer behavior. In this regard, web analytics determine the possibility of information communicated to the target customers through a firm’s website influencing a customer’s intention to purchase its products and services. The performance of a firm can be measured through its ability to generate profit, efficiently offer its services and products and its ability to reduce production cost (Tanriverdi, p.56). According to Tanriverdi, web analytics when accurately applied is important in determining customer satisfaction level and an organizations market share. This information can then be applied in identifying factors hindering organizational success. Addressing such factors would eventually result to increased customer satisfaction. The website is not independent of the organizational and its business activities. Rather, it is a new mode of communication and service delivery. As a result, the website, just like any other mode of communication and delivery is subject to testing (Hulland, p.34). It must therefore be aligned with business goals, tactics, strategy vision and mission. As long as information is not capture and clear in any web analysis, generated reports are useless. This means that the value of web analytics reports lies in its applicability in determining the extent to which organizational goals in e-commerce have been achieved. In addition, web analytics reports are important in addressing customer service. This involves communication of customer tailored messages through a web page. This translated to enhanced customer relations and knowledge transfer. This according to Piccoli et al (2004) ensures that the organization meets specific customer needs and wants rather that general market wants. In this regard, e-Commerce is translated into a customer-intimate discipline (Piccoli et al, p.16). Business-customer relations are cultivated. As the customers gain confidence in the ability of the company addressing their needs, business opportunities are created. This leads to a conclusion that web analytics positively impacts on e-Commerce by opening business opportunities. The success of firm’s website is measured by its capability to attract target customers necessary for the firm to accomplish its strategic goals (Hulland, p.54). As such, web analytics positively impacts on the success of the organization in that, reports of analysis findings are applied in enhancing customer experience by addressing any issues affecting the possibility of target customer accessing and utilizing the website. This is based on the idea that, once a customer is satisfied with the services offered through a firm’s website, the likelihood of reusing the service and selling the idea to other customers is increased (Schaupp et al, p.24). This ultimately increases the chance of the firm meeting its strategic goals through increased customer base and utilization of services offered. Conclusion Web analytics is essential in the success of e-Commerce. However, the mere analysis of websites does not in any way impact on the success of attaining organizational objectives of setting the website. This calls for adjustments to be made on the websites where need be to ensure that the firm reaps a competitive edge. A complete analysis of the website involves an understanding of all aspects of the website that influence a customer’s behavior and the possibility of increasing productivity while reducing operation costs. This analysis indicates that from the three perspectives namely; organizational, technological and management perspective, web analytics positively impacts on e-Commerce. Based on technology, it is evident that web analytics plays an essential role in describing both internal and external technologies which are fundamentals towards understanding a business environment in today competitive technological world. Web analytic on e-commerce under a technology perspective enhances organizational performance. Focusing on organizational perspective, web analytic can be an important tool in determining customer satisfaction as well as organizational market share. By so doing an organization is able to identify various factors that hinder organizational success and work towards rectifying these factors. Finally on management perspective, it is quite evident that without proper management of web analytics, the company cannot be able to achieve its desired objectives since both its brand reputation and image will be damage. Therefore, effective web analytic goes hand in hand with an organization, its management and improved technology. Works Cited Bardhan, I., J. & Whitaker, et al. "Information Technology, Production Process Outsourcing, and Manufacturing Plant Performance." Journal of Management Information Systems 23(2), 2006. Belanger, F., Fan, W., Schaupp, L. C., Krishen, A., Everhart, J., Poteet, D. and Nakamoto, K. "Web site success metrics: addressing the duality of goals," Communication of the ACM, 49 (12), 2006. Cappel, J & Huang, Zhenyu. "A Usability Analysis of Company Websites." Journal of Computer information Systems 2007, 48, no. 1, pp: 117-123 Choe, J. "The effect of environmental uncertainty and strategic applications of IS on a firm's performance." Information & Management 40(4): 257, 2003. Desbarats, G. "Usability: form that says function." Industrial Management & Data Systems 95, 1995, no. 5, pp: 3-6 Huizingh, Eelko, Adriana Krawczyk, Tammo Bijmolt, and Janny Hoekstra, "How Important are Transactional or Informational Functions for Website Success?," ANZMAC 2007. Dunedin, New Zealand, 2007. Nosek, J. T. and M. McManus. "Collaboration Challenges: Bridging the IT Support Gap." Information Systems Management 25(1), 2008. Pennington, L. “Surviving the Design and Implementation of a Content-Management System.” Journal of Business & Technical Communication 21, 2007, no. 1, pp: 62-73 Peterson, T. Web Analytics Demystified: A Marketer's Guide to Understanding How Your Web Site Affects Your Business, 2004. Roy, M. "The impact of interface usability on trust in Web retailers." Internet Research, 2001, 11, no. 5, pp: 388-398. Schaupp, L. Christian, Weiguo Fan, and France Belanger "Determining Success for Different Website Goals" Proceedings of the 39th Annual Hawaii International Conference on System Sciences (HICSS'06) Track 6, 2006. Tanriverdi, H. performance effects of information technology synergies In multi- business firms. MIS Quarterly 30(1), 2006. Wade, M. R. & Hulland, J., et al. "The Impact of Capabilities and Prior Investments on Online Channel Commitment and Performance." Journal of Management Information Systems 23(4), 2007. Read More