Casa del Libro Dot.Com

Grupo Planeta owner of the bookstore Casa del Libro, the second largest bookstore in Spain after Corte Ingles decided to enter the dot.com market with the online store cadadellibro.com. The new venture created from scratch invested in a top of the line technological platform to support the webpage and its future growth. The newly appointed CEO in a few months build the company needed to face the projected aggressive growth but a few months later the dot.com sector crashed and future perspective changed dramatically. The Unix based technological platform set up since the beginning was expensive and with very high maintenance costs and I hadn’t properly worked just yet. A new Microsoft platform was proposed as a new option to substitute the old one. This new platform was cheaper and easier to implement. The CEO had to decide whether to use the new platform or keep using the previous one.

In my opinion, the CEO must choose to switch to the new Microsoft platform, since it is less expensive and easier to use. This will help casadellibro.com to get operational faster an face the crisis with less costs and more adaptability. For instance, if they keep using the same platform, any further complication of the future crisis would severely damage the performance of the new company due to the high costs of the current platform and how this will compromise its liquidity and still there is no certainty on when they will be ready to launch successfully the platform. I believe that the most relevant criteria for this decision are the risk of facing a more severe crisis, the ability to launch faster the product, the potential to reduce costs.

Casa del Libro Dot.Com

Grupo Planeta owner of the bookstore Casa del Libro, the second largest bookstore in Spain after Corte Ingles decided to enter the dot.com market with the online store cadadellibro.com. The new venture created from scratch invested in a top of the line technological platform to support the webpage and its future growth. The newly appointed CEO in a few months build the company needed to face the projected aggressive growth but a few months later the dot.com sector crashed and future perspective changed dramatically. The Unix based technological platform set up since the beginning was expensive and with very high maintenance costs and I hadn’t properly worked just yet. A new Microsoft platform was proposed as a new option to substitute the old one. This new platform was cheaper and easier to implement. The CEO had to decide whether to use the new platform or keep using the previous one.

In my opinion, the CEO must choose to switch to the new Microsoft platform, since it is less expensive and easier to use. This will help casadellibro.com to get operational faster an face the crisis with less costs and more adaptability. For instance, if they keep using the same platform, any further complication of the future crisis would severely damage the performance of the new company due to the high costs of the current platform and how this will compromise its liquidity and still there is no certainty on when they will be ready to launch successfully the platform. I believe that the most relevant criteria for this decision are the risk of facing a more severe crisis, the ability to launch faster the product, the potential to reduce costs.

ERP and Companies

An Enterprise resource planning (ERP), derived from MRP, is a software system created to integrate various administrative areas of a business such as financials, distribution, human recourses, manufacturing, logistics, supply chain management, project management, data services or product lifecycle management among others, to better manage all its resources and control the inputs and outputs of its components.

According to Wikipedia, software to be considered as an ERP system it must comply with four important components. First, it must be able to operate in real time, integrating all the components. Second, all the data must be concentrated in one place and all applications must be able to access it to run its processes. Third, there must be an homogeneous presentation and functionality through all its components or modules of each area. Fourth and lastly, the system must allow its users to access the any data without further specialized developments from the IT department.

Implementing a ERP into a company requires training and adaptation from the users of the company in the way they organize and manage their operations. Companies usually rely on consultants’ help for training, implementation and support. Most of the time consultants are the most reliable resource and usually this translates in an expensive necessity but very effective at the same time. Consultants are in charge of selecting, planning, training, testing, implementation and delivery of any of the modules to be integrated in the companies’ ERP system.

The greatest advantage of ERP’s is that connects all the resources of the company in one place and makes possible to forecast more accurately, manage inventories, improve communications, track status on processes, update and keep track of the financials, etc.

One of the main problems that ERP has is that its options for adaptability and change are limited and basically the companies must adapt more to ERPs than the other way around. This can represent a real challenge for companies that decide to incorporate this kind of systems. Due to the complexity of the ERP it is difficult to create a solution that can easily adapt to a company completely without the company’s need to make mayor adjustments. An ERP that could be able to do this in the future would have an outstanding competitive advantage because this will be seen with great eyes among companies. Nevertheless this does not seem to be feasible.


Reference: http://en.wikipedia.org/wiki/Enterprise_resource_planning

Dell Hell

The writer and creator of the blog BuzzMachine, Jeff Davis lived a bad customer service experience when he bought a Dell computer back in 2005. Jeff Davis paid for a 4-year warranty and service that included home assistance to address any technical problem that the computer could have. A few days after the expected delivery date, Jeff received his new computer. To his and Dell’s misfortune, the device didn’t work. Concerned and unsatisfied by the product he called customer service and asked for assistance to get his computer repaired and a technical expert was sent to his home to fix the computer. Unfortunately the computer malfunctioned every time and Dell’s inability to solve this problem unleashed a series of angry complaints that escalated in color and aggressiveness towards Dell.

Jeff Davis descrived his experience as Dell Hell and his post in his blog rapidly gained followers who found a space to upload a concerning stream of heavy complaints and destructive criticism against Dell. Through his blog, Jeff escalated his complaints through various levels in the organization until he finally addressed directly to both Michael Dell and his son. Nevertheless, he didn’t received a response and a satisfying solution to his problem and continued attacking the companies inability to solve a problem. This situaton continued gaining momentum until the point that media started to notice the problem and start publishing it in its pages.

Dell failed to identify the magnitude of the problem. At the moment one computer over more than three million might not seem significant and one complaint more was merely statistics. Unfortunately, when Dell realized, this unattended customer had created a snowball that strongly hit their reputation. Dell reacted among other things by hiring a professional blogger with a long history of work in the company to add PR balance in the blog media and offer a channel for new ideas of improvement and a voice of the customer to the company.

This has helped to improve the image of Dell but definitely there where things that they could have done in very early stages to prevent the problem to convert to Dell Hell. Back then there was not a defined culture regarding how to address complaints and issues raised through Internet communities but definitely a if back then Dell had followed the growth and gradual escalation of the problem through the web and the progressive impact in the media that followed to connect probably they might have seen the threat and acted accordingly to address the problem with more resources.

Dell might have learned an important lesson but many other companies too through someone else’s experience. Companies must broaden their territories to Internet in terms of awareness of their popularity, acceptance and perception in words of their customers and media. The ones that fail to do so will lose opportunity to communicate with their customers in a new environment where blogs offer a forum for people to say what they feel or think and if there is no one of the company to answer, someone will.

Facebook take two

Today, Facebook is one of the most popular social networks in the Internet. Created by Mark Zuckerberg in 2005, today Facebook has more than 400 million users in its worldwide network. Google and Microsoft have been interested in putting their hands into this website but in the end it has managed to find its way through to stay independent.

People from all nationalities, genders, ages and interests use Facebook. This platform offers a network where anyone can sign in and start connecting with friends to share photos, messages, wall posts, gifts, games and applications. Friends can follow up each other’s activities through their posts in their walls and photos.

A lot of information is posted in the website regarding all kinds of interests and preferences of its users. All this information according with the legal agreements signed by all users is property of Facebook. The use of this information for commercial purposes has raised concerns in its users in terms of privacy issues. Although this has become a general problem in mainly all the social networks available today, the threat is bigger in the ones with the most influence in the net and with great potential of commercial revenues through advertising. Many users have opted to terminate their accounts, others reduced their activities but many others are not aware of this risks. Time will say how privacy will affect the performance of Facebook but in the meantime it is definitely an issue that sensible for the company and will affect the way they plan their future steps in the evolution of their business model.

The future of Facebook in the next couple of years is promising. It has a network full of profiles, updated every day with information about its users that can be exploited commercially in many different ways. Giants as Google and Microsoft have been interested in this potential market. Its users spend hours every day in this portal accessing many of its pages opening all the possibilities that can be used for directed advertising that is of great value to all companies eager to sell and advertise products through internet.

I really look forward to se how Facebook will evolve in the following years and how it actually take advantage of its potential streams of revenue.

Google minus 3

Google without any doubt is the global leader in search engine services that include many Internet products and services. It is the global leader in Internet advertisement and most of its income is based on it.

Google was founded in 1998 and in 2010 its worth around US$40.5 billion and has a revenue of US$23.6 billion. AdWords and AdSense are Google’s most important advertising applications spread among the entire web. Its rapid growth has positioned Google as a reference in the Internet industry for its innovations in its products and services. Google uses advanced algorithms to rank and prioritize the relevance of the information searched through its engines and have proved to be the most used alternative by Internet users.

Among its services we can find Google Search, Google Earth, Google Voice, Google Desktop, Google Chrome, Google Analytics, Google Video, Google Maps, Google News, Google Books, Google Calendars, Google Translate, You Tube and recently they have launched HTC phones like Nexus One and Droid Eris.

Nevertheless, the following paragraphs will present three issues that are interesting to think about and reflect on their impact on Google.

Issue #1 Privacy

Privacy is one of the main concerns of many regulatory players such as the Public Information Research’s Google Watch , the United States Department of Justice, Consumer Watchdog, European Union (EU) data protection officials, The Data Inspectorate of Norway, the Italian Personal Data Protection Code keepers and Privacy International. Google has been questioned many times time why it keeps the private information of its users for a longer period of time than the market in general. Google has detailed and somehow intimate information of its users profile and behavior and it is concentrated in one source. Many concerns in the potential improper use of this information have created reactions and users are complaining about their right to keep their privacy to themselves. Google has reached a point where control over the stream of information flowing through its engines may face some limitations to guaranty the privacy of its users. If this issue continues escalading and regulations become stricter in this matter, Google will face a complicated situation.

Issue #2 Sales Risks

According to Wikipedia almost 99% of the revenue of Google revenue comes from advertising in 2006. Google uses AdWords and AdSense for advertising distribution in the web. Income is generated depending on CPM, CPC or CPA/CPL modes agreed with the interested companies. Google have specialized controls to prevent the illegal clicking, which is basically click on advertisement to generate money for the website without being interested on it or to use programs to do this task automatically. Unfortunately, it seems that there are still relevant complaints about this matter out there. In 2006, some customers that paid for advertisement in Google complaint on its inability to prevent click fraud, representing considerable losses due unfairly earned advertisement. This issue seriously affects the reputation and the reliability of Google. For sure, Google makes the necessary adjustments to prevent this kind of illegal activities. Nevertheless, as the web becomes more complex and bigger, also the controls leave room for error. The effectiveness of Google to handle this threat will play in its favor or against depending on their performance in the future.

Issue #3 Real Relevance of the Information

Lastly, the relevance of the information delivered after a searching through its engine may have some degree of manipulation in the long run due to commercial purposes. There are ways to “optimize” a webpage to increase its chances to appear in the first pages after a search. Therefore the relevance of the information can be adjusted to the needs of a company or a supplier to promote their product or service in the first place. This means that “sometimes” when looking for non-commercial information and using Google’s search engine, the links and information displayed can be manipulated or biased so that the results may still display relevant information with commercial weight, lowering the effectiveness and real/actual relevance of the information from the point of view of the person that performs the search.

References:
http://en.wikipedia.org/wiki/Google
http://en.wikipedia.org/wiki/Criticism_of_Google
http://finance.yahoo.com/q?s=GOOG

The Future of Microsoft

The future of Microsoft is not written, just as the one of any other business. Nevertheless, based in the history and the past success I believe that Microsoft will become in the future in one of the leading corporations that will bring technology and information to the next level, by bringing services, data and our needs to the reach of our hands in a very high tech performance environment. Here is a glimpse of the vision of the future of Microsoft.

Future Vision Montage

Health Future Vision

Banking Future Vision

Retail Future Vision