Customer is the most important component of any business. The globally popular slogan “customer is king” or “customer is god” indicates the importance of customers to businesses. Hence, if the organizations are hugely customer centric in their approach, they are rightly so. Customer centricity refers to the orientation of a company to the needs and behaviors of its customers.
Any pivotal functional change being considered to be incorporated by the decision makers of an organization is always first studied for its impact on the current and expected customers of the company’s products. One of the most common form of change that companies usually bring in their organization is the up-gradation of the existing technology used by the company. Post Industrialization era , technology has become one of the most important feature of an organization. It is one of the hot topics among the business world.
More and more business enterprises , large or small, are trying to incorporate the latest available technology into their operations. This notion is substantiated by the fact that the popular business firms now have a separate technology sections, and information systems departments as a very critical component of the organization. The importance of the whole information technology field is that it is designed to make people and organizations more faster, knowledgeable, efficient, and profitable.
A key advantage of the information systems is to be able to simplify organizational structures. In fact firms with well-developed management information systems lend themselves to a move towards flat structures. Irrespective of the complexity of the system or the size of the organization, the incorporation of new technology or information systems will accompany change by and large in the entire organization.
The importance of information technology and its impact on the organization is emphasized by Nadler, who states “perhaps the largest single influence on organizational architecture and design has been the evolution of information technology. “[Gerstein, p. 5]. The mode of implementing the new technology can be either indigenous or it can brought at a suitable price from another company selling the technology.
In the former case need for co-ordination is only one sided (within the organization) but in the later type a very well coordinated relationship has to be maintained with the enterprise selling the technology as well as within the organization so that the training and the transition process is smooth. The implementation of information systems and technology in general can be a boon to an organization by being part of a transformation that results in fundamental improvement.
Although in the beginning their may be some repulsion towards acceptance of the new technological change but with proper managerial support and education they can be certainly overcome. Nonetheless, the efficiency gained from technology and associated information systems will generally serve as the precursor to eventual acceptance of the change. The benefits of improved coordination and increased supervision even replace the need for tall, hierarchical organizations.
In fact firms with well-developed management information systems lend themselves to a move towards flat structures. One author warns that de-layering is not right for every organization and should not be done indiscriminately. (Nelson, p. 56) The impact of new technology and information systems does not limit itself only to the organization its also hugely influences firm’s relationship with suppliers or customers.
As the new technologies and information systems are adopted by the firms, the technology level of the firm is emerging as an important variable of inter-organizational relationships. The influence of technology levels on the customer-supplier interactions is explicit. Drawing on the marketing and social exchange literature, a set of research propositions in terms of major characteristics of interaction processes with the customers is part of the process.
The technology implementation process must view the customer as both the purchaser and user of the new technology. With this perspective, demand evolves not just through compositional changes but also through how customers evaluate and use a technology. These components of demand progression emphasizes how competition shifts in an industry and the effects of disruptive technological changes.
On systematic analysis of the demand evolution and its influence on industry competition with respective to the technology it can be observed that customers tend to study the market thoroughly before making a choice. Demand evolution in terms of customers is switching from valuing different product features to price as the products satisfy their functional thresholds (or preferences). Adner and Levinthal 2001] A process in which customer understanding and technological development co-evolve as customers and the technology move from an uncertain, generalized understanding of the technology to a more determinate and specified interpretation [Clark (1985]. The customer, evolves in ways that are interrelated to firms innovating a new technology. The source of competitive advantage lies in the interplay between firms adapting and the environment selecting.
Creative and strategic management of how customers understand and use a technology should be an important competitive factor in the industries. Customers can change how they value a technology through learning new uses, then firms have an incentive to re-engage in product innovation after technical standardization. Customers may interpret the technology differently or may adapt it to their local conditions and requirements, generating variety in how users actually deploy products.
Moreover, as customers use new products, they may learn new ways of using the technology, which affects their future purchasing and deployment decisions. In order to educate the customer about the new technology being used and its after effects it is very important that the customers are correctly informed and educated about it by the company and its public relationship department. A triangular relationship exists between communication channels, companies, the customer.
The choice of communication technology is the key to building a successful brand relationship with any given existing or prospective consumer. This decision of promoting the technology however also needs intervention of the marketing department in order to creatively bring the brand to market. This allows the sale of the technology along with the product it is associated with. Once of the significant trends in consumer marketing is the advent of multi-channel marketing of products and services.
This is exactly where the communication technology comes into picture. Given this the new technology, channels of communications are evolving at a speed that no one can keep up with. Organizations are using direct channels such as the Internet, catalogue channels and other channels such as brick-and-mortar environments, either to seamlessly integrate their offerings across all channels or to use these different channels to segment consumers and implement differential marketing strategies.
Revolutionary innovation of the technology like e-mail, e-commerce, Internet and websites, cell phones and laptop have opened up a new world of marketing communication. A fundamental change has occurred and marketers need to rethink their promotional strategies. Today the customer has the opportunity make a suitable choice, by accessing the website or sending an e-mail. All relevant information must be made accessible and user friendly so the customers are easily able to acquire what they seek.
Many market research companies are now-a-days using the wireless devices and interactive voting systems to obtain an instant feedback from their customers. These wireless devices are also used for dynamic promotion and pricing – for example electronic coupons as consumers shop, quantity discounts, auction pricing for certain items or bidding against other shoppers are common strategies of obtaining high end immediate response of their product.
Interactive voting is one of the most successful revenue generating Interactive TV applications. Voting can be used to encourage the first time users to interact with programs and advertising, thus helping viewers become familiar with Interactive TV. Voting changes the dynamics of the viewer’s experience from a passive, one-way communication to a two-way exchange that draws in the audience by allowing viewers to interact with and influence the program.
Thus, it has been proven that the use of advanced technologies to complement the more traditional channels can lead to much more efficient and effective market communication techniques at significantly reduced cost. The technological development and its incorporation first in the organization and then finally impacting the customers of the business has been explained below with two actual examples.
The foundation for the purpose of this research has been created by a prospective study to explore the impact of application of e-commerce on the Iranian insurance industry. In order to fulfill the purpose of this study, a frame of reference has been emerged based on a vast literature review. With the focus at quantitative research as a general approach and descriptive research as the type of research in this study, a structured questionnaire was used as the data collection instrument.
To accomplish this, a survey of 258 people (in almost all active insurance companies in Iran) has been carried out. The respondents from almost every department within the targeted insurance companies were randomly chosen. We have focused on the perception of insurers regarding the subject of study, and thus, the perception of other stakeholder such as insurance agents/brokers and even their customers have been suggested for future research, due to limitation and demarcation of this research.
This dissertation has been organized in the seven chapters. An introduction this study, problem statements and research questions were presented in chapter one. The second chapter was devoted to literature review. The emerged frame of reference was provided in the third chapter and our research methodology was discussed in the fourth chapter. Data presentation and analysis were done in accordance with the research questions and the frame of reference in chapter five and six, respectively.
Finally, in the last chapter findings and conclusions were drawn by answering the research questions. With respect to the findings, we conclude that the Iranian insurance companies were positively looked at e-commerce and its application in their companies. Their attitude and views toward e-commerce was positive so that they found that e-commerce would be an opportunity rather than a challenge or even a threat for insurance industry. They highly believed that e-commerce would affect on insurance companies and, thus, their companies should embrace e-commerce.
Lack of skilled staffs in e-commerce application and scarcity of IT experts were the most infrastructure requirements which they found that the Iranian insures were suffering from. Whereas they were well equipped with hardware and networking as well as general and professional insurance software required in e-commerce applications. Lagging of other supportive sectors (e. g. , e-Banking and Telecommunications), lack of appropriate legislation and regulation (e. g. copy right, digital signature), low Internet usage and fewer users, traditionally attitudes and views over the companies and scarcity of skilled staffs were the five top major obstacles which would hinder the Iranian insurers to embrace e-commerce. E-commerce is potentially applicable to marketing and sales as well as R&D with respect to insurance value chain. On the other hand, as far as insurance products concern, auto (motor) insurance, marine and aviation, life insurance and fire insurance were highly perceived to suitable to e-commerce (sale online).
Finally, the Iranian insurance companies were chiefly believed that in the case of e-commerce application they would get these top five benefits: brand and image promotion (as a pioneer and modern company), extended corporation with partners (specially in the reinsurance cases), lower invest for establishing the sales and after sales services network, cost reduction in value chain management (e. . product/service development) and decentralization and no restrictions imposed by national borders [Aarabi and Bromideh, 2006] Information technology was also a core element of the turnaround of Union Pacific Railroad. The overall goal was to eliminate layers of unnecessary middle management, increase their efficiency, and improve customer service radically.
Accomplishing this goal would not have been possible without the technology implemented in their revised, centralized operations. All customer service functions were consolidated into one National Customer Service Center in St Louis, where customers could b e given up to the minute information on their shipments and UP’s schedules. This in turn, is made possible by the world’s largest computer controlled dispatching facility located in Omaha, Nebraska.
In this facility, a 100 yard long screen displays all of the railroad’s trains and 10,000 miles of track and constantly monitors the movements of each by means of electronic sensors on the train cars [Kupfer, p. 142] Their success at implementing this technology along with the other accompanying changes, both formal and informal, enabled UP to make a dramatic turnaround. From this discussion and the examples given, it is apparent that technology is a critical element of organizational transformation and customer decisions..