BSC (Hons.) Business Information Systems, BSc (Hons) Computing and Information Systems. Cohort: BIS/09/FT, BIS/08/PT & BCISR/11/FT

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1 BSC (Hons.) Business Information Systems, BSc (Hons) Computing and Information Systems Cohort: BIS/09/FT, BIS/08/PT & BCISR/11/FT Examinations for / Semester 2 MODULE: E-Business MODULE CODE: ISM3102 Duration: 2 1/2 Hours Instructions to Candidates: 1. Answer all questions. 2. Question 1 is based on the case study. 3. Questions may be answered in any order but your answers must show the question number clearly. 4. Always start a new question on a fresh page. 5. Total marks 100. This question paper contains 4 questions and 6 pages. Page 1 of 6

2 Case Study: Imarketkorea Established in 2000, imarketkorea (IMK) is South Korea s largest e-marketplace (exchange) specializing in MRO (Maintenance, Repair, Operations) items for various industries and direct materials for the electronics industries. IMK s e- catalog includes over 1 million items. In 2008, sales revenues were $722 million, with 180,000 monthly purchase orders. IMK was originally established as the online procurement sourcing company of Samsung Group in 2000; since then it has expanded its customer groups to various industries, including manufacturing, finance, retail, universities, and hospitals. Since its inception, the company has grown rapidly (an average annual growth rate of 23 percent). From a market for Samsung s 45 affiliated companies, IMK has grown to serve approximately 350 companies in Currently, 70 percent of customers are Samsung related, whereas 30 percent are non-samsung related. Many of the newly added customers are not Samsung affiliates, including some from outside South Korea. The site offers Korean, English and Japanese options to registered users. Initially IMK concentrated on acting as a procurement agent to the Samsung companies. By 2007, however, the company shifted its mission to become a B2B procurement service provider, providing end-to-end procurement and logistics services for a variety of industries. Among its most popular services for buyers are payments, deliveries, purchasing, budget management, internal approval processes, inventory management, storage and more. In addition, IMK helps to smooth its customers supply chains (e.g., process improvement and workflow management). IMK also supports connectivity to enterprise systems (e.g. ERP, legacy systems). The system architecture and the major participants are shown in figure 1. IMK s business model is interesting because IMK does not charge fees for its services, but rather shares the reduced costs with its buying customers. In this Page 2 of 6

3 manner, IMK removes the risk from the customer side. IMK pursues a 3S leadership strategy: sourcing, service and system leadership. Figure 1: IMK System Architecture, (accessed April 2012) The strategic sourcing suites that IMK provides include SRM (Supplier Relationship Management), sourcing DSS, and e-catalog collaboration tools. They include features such as the following: Tools to calculate total cost of ownership (for purchasing) Strategic sourcing processes A scorecard grading system tool to perform a formal evaluation of suppliers (assessment, selection, monitoring) Knowledge sharing and best practices of procurement B2B auctions (forward and reverse, either as supporting the entire process or in helping customers take charge for the major activities, helping only with procedural matters during the auction) Spend management analysis and control tools Collaborative e-sourcing tools Decision support and optimization models for buyers. Contract management features Page 3 of 6

4 Decision support and optimization models for buyers Contract management features Integration of suppliers by selecting those who are reliable and sound and who are able to provide value (price matters, too, of course) leading to long-term strategic relationships (win-win situation) Risk assessment and management Item standardization for inventory and cost reduction at the suppliers level, enabling better cataloging and faster and easier search (e.g. simultaneous search of many items) Analyzes replies to RFQs quickly, considering large amounts of computerized information and knowledge The following are some recent IMK initiatives: An alliance with the Japanese Sumitomo Corp. (a top online trading company), kicking off global business expansion. IMK is already exporting MROs to 12 countries. IMK exported over $87 million in MROs in 2008, plus $18 million in direct materials (a 37 percent increase over 2007) In collaboration with Woori Bank, IMK opened B2C and B2B2C channels for selling gifts over the Internet to the bank s employees. The results speak for themselves. IMK s customers have experienced the following benefits: On-time delivery has increased from 72 to 94.5 percent. Average lead time has been reduced from 5.3 to 3.31 days Catalog search speed has increased 40 percent. 12 to 18 percent savings in purchase prices 30 to 50 percent savings in process costs 5 to 15 percent savings in inventory management costs. 40 to 60 percent savings in inventory managements costs All these have contributed to the success and growth of IMK. Sources: compiled from imarketkorea (2006), Lee and Lee (2007), and imarketkorea.com (accessed Nov. 2009) Page 4 of 6

5 ANSWER ALL QUESTIONS QUESTION 1: (40 MARKS) Please refer to the IMarketkorea case study (a) How do the support services benefit the exchange? Support your answer with examples. (b) Write a summary of the benefits of the exchange to buyers. (c) Write a summary of the benefits of the exchange to sellers. (d) Much of IMK s success is attributed to the understanding of the Korean culture and business environment. Given that imk wants to expand internationally, what could be some of its stumbling blocks? (e) According to you, how would IKM evolve strategically to sustain its leadership in this competitive market? Page 5 of 6

6 QUESTION 2: (20 MARKS) (a) Justify and explain with the help of examples, the five components which relates to Infrastructure of the E- Commerce Framework. (15 marks) (b) Compare brick-and-mortar and click-and-mortar organizations. QUESTION 3: (20 MARKS) (a) (i) How do social networks provide viral marketing? (ii) Give two examples of companies who have successfully use this strategy. (b) How can we observe customers movement online with the aim of tracking their online activities? QUESTION 4: (20 MARKS) (a) Briefly describe the five value-added attributes of m-commerce. (b) Describe the connection between learning and social networking. (c) Give three examples of how L-commerce can be beneficial to individuals. ***END OF QUESTION PAPER*** Page 6 of 6