Is RSS A Disruptive Technology?

First coined by Clayton Christensen, disruptive technologies are deemed to:

• Be technologically straightforward
• Consist of off-the-shelf components
• Be simpler than previous approaches

As implied by its name, Really Simple Syndication (RSS) certainly meets the first criteria; it is designed to distribute content from web sites to users who have previously stated an interest in the given topic. Secondly, it is based on XML- the mark-up language that provides a “text-based means to describe and apply a tree-based structure to information” [1] and thus the second criteria is also satisfied. To enable an RSS-feed, the user must subscribe to a newsreader service (i.e. Blogger) and then click on the RSS symbol on relevant websites- this is a very simple approach to filtering news to the individual users’ preferences. By Christensen’s reasoning, RSS is undoubtedly a disruptive technology/innovation.

In his 1997 book “The Innovator’s Dilemma”, Christensen asserts that technology can be considered to be sustaining or disruptive. Sustaining technology is designed to make incremental improvements to already established technology. On the other hand, disruptive technology is thought to lack refinement and be inherently problematic because it is new. Whilst the RSS/XML symbols (allowing users to subscribe to RSS feeds) appear on the majority of websites, it is thought that less than 5% of the web community actually subscribes to them [2]. This begs the question whether or not the use of RSS is extensive enough to merit being tagged a ‘disruptive technology’. However, I suspect that Microsoft’s decision to include RSS features in Internet Explorer 7 will drastically increase the use of RSS and subsequently amplify its disruptive influence.

As RSS is already prevalent in the weblog community and news site syndication, the development of it within these markets is more sustaining, rather than disruptive. It should be considered that improvements made to these markets as a result of further RSS development may have a disruptive influence on unrelated markets. For instance, RSS was originally designed to filter the plethora of information being made available on the web so that users would not waste time perusing irrelevant articles; this function has been extended so that many feeds now include full text and graphics, essentially bypassing the users need to visit the actual website. Whilst this advancement in technology saves time for RSS users, it is extremely disruptive to the online advertising market as revenues are directly linked to the number of official hits each site receives (I shall elaborate on this later on).

Despite Christensen’s commonly accepted definition of a disruptive technology, John Dvorak questions whether such a thing actually exists by suggesting that there are merely new ideas/inventions (that achieve varying success). Unquestionably, the discrepancy lies in the two authors’ definition of disruptive technology-Dvorak differentiates by claiming that [3]:

“A disruptive technology is defined as a low-performance, less expensive technology that enters a heated-up scene where the established technology is outpacing people's ability to adapt to it. The new technology gains a foothold, continues to improve, and then bumps the older, once-better technology into oblivion”.

According to this definition, RSS is not a disruptive technology. Whilst functionality has been significantly altered since first inception (see the history of its development [4]), I suspect that even the earliest forms of RSS facilitated a browser’s ability to discriminate irrelevant articles far more efficiently than a run-of-the-mill search engine. Consequently, the requisite of being ‘low performance’ is not met.
Dvorak attempts to substantiate his rationale by drawing reference to the effect (or lack thereof) of Linux on Microsoft. As Linux is a free, open source operating system, many perceived that it would disrupt Microsoft’s monopolistic control. Despite this threat, Microsoft’s wealth grew more than thirty-fold in the twelve years following the inception of Linux- “some disruption”[3], boasts Dvorak. Then again, who’s to say that such growth was not actually obstructed by Linux? To illustrate this perspective, consider the analogy of a trip to the cinema:

Whilst attempting to focus on the latest blockbuster, the dialogue is constantly interrupted by two nuisance viewers perched in front of you. Despite their incessant muttering, at no point do these viewers physically replace you by sitting in your seat. Thus, you are able to decipher the main themes/plots of the film regardless of their disruptive influence on your enjoyment of it.

In context, Microsoft was affected by the initiation of Linux- yet it prospered regardless of the disruptive technology.

RSS is revolutionising the way browsers harness the capabilities of the internet. It extends the arm chair culture prevalent in today’s society, as this mechanism interrogates sites on behalf of its client. Frequently visited sites can be subscribed to so that any new activity is relayed back to the RSS aggregator creating a centralised and current data source for the busy browser. However, is this useful little innovation causing havoc for the established technologies it resigns to the bench? If so, how long will it take for RSS to take over? Proponents such as VAN DER POOL [5] claim this development is imminent:

"I think this will become commonplace within a year to 18 months".

The ramifications of this realisation concern several established industries.

Online Advertising

Advertising is the primary means of monetising many websites- if RSS takes off in the manner currently predicted, then this will seriously affect the volume of hits on web pages, as people are effectively able to bypass the often pesky or irrelevant adverts and are transported directly to the content they desire. With less hits, this form of marketing may become uneconomical for the sponsor who may end up withdrawing their funding, leaving the site precariously searching for additional means of revenue.

On the other hand, another train of thought exists which suggests that RSS instead of threatening advertising, in fact creates an opportunity for a more efficient approach. Browsers who use RSS to stay informed generally feed from a variety of sources; this diverse selection may allow for an insight in to the profile of the individual. If advertising agencies could tap this database they could more accurately surmise the interests/personal preferences of the user. From these images they can better tailor more effective advertisements. For example, if you want to advertise to computer game players, then an RSS feed of computer game news provides a focused channel to a specific audience.

“So, as more consumers realize the timesaving benefits of being able to scan numerous Web sites for new content quickly via an RSS reader, it's no surprise that advertisers are clamouring for new ways to reach these eyeballs”[8].

Pheedo is one such internet start-up intent on capitalising on this new possibility as they place adverts within the content of RSS feeds. I personally use the Pheedo aggregator to view new F1 articles; the way this site pushes adverts on the user is by first directing them for 10 seconds to their sponsor’s page before the article is displayed. Adopting this technique, there are many counter measures to enhance the existing role of internet advertisements.

However it is not just internet advertisements that the emergence of RSS is having repercussions for. The classified ad within the common newspaper was once said to be a “river of gold” for the industry. However the flow is all but dried up as sellers have resorted to the wider net cast by internet markets such as eBay or Craigslist. RSS has not directly initiated the decline, as these sites were present before the adoption of RSS. However it has enhanced many features of these sites causing them to be even more user friendly and certainly more likely to attract an expanding piece of the pie diverting business from its paper-based adversary.

Traditional ‘Classifieds’

The demise of the newspaper is approaching: Philip Meyer [7] predicts that the last conventional newspaper will circulate in 2043.

The rise of the internet becoming the dominant information reference has created an unhappy paradox for the news reporter. Never before has information been so easily accessed. Journalists no longer have to weather perilous conditions to get a scoop; almost everything worth researching is to be found only a few mouse clicks away. However, increased availability is a double edged sword for the tertiary reporting sector. The availability of more streamlined channels has enabled consumers to conduct an increasing proportion of their own research. No longer bound or spoon-fed biased perspectives they are able to investigate in whichever fashion they deem appropriate.

“When the sources speak directly to the customer, and the customer can access the sources 24 hours a day, there is no one in the middle.” [7]

Harnessing RSS is almost like editing/amalgamating your own personal newspaper. Constituted of everything you may ever want to read about and delivered to you in condensed form able to be accessed and referred back to at any time, RSS outshines the process it is set to displace in almost every respect therefore has this new technology earned its right as disruptive?

Business Information Systems

The RSS format may also lend itself as a mode of communication replacing the intranet or office memo. “One of the biggest complaints I hear about intranets is that it's hard to drive traffic.”[5]. Using a news reader important notices can be pushed upon them, with a centralised mechanism for all information employers can be more confident that the aggregator is more frequently visited than the internal network so that employees at the very least have been able to glance at a summary of the notice.
As RSS develops and taps into the mobile devices market its purpose may become more pronounced. There is evidence of the use of RSS to convey general information such as library opening times. While utilising its capabilities in this way is not directly affecting any technology it just happens to be that RSS is best suited to providing this service cheaply and effectively.

Financial Reporting

Real Time accounting is a very recent proposal which can only have been facilitated through RSS. RSS was built upon the XML format to relay information; to incorporate Real Time reporting this has evolved into XBRL. This revised format allows companies to enter financial information in a meaningful way enabling it to be recalled automatically by stakeholders. Instead of static quarterly reports prepared often long after the event, companies can simply publish their transactions as and when they occur.

A company’s stakeholders can gain an instant and accurate insight into the organisation financial state at that moment in time. The job of the financial analyst is made almost redundant as investors are provided access to the same current information while the analytical procedure can also be partially conducted by the computer as it seeks out the appropriate labels, e.g. in evaluating the performance of a company a Net profit ratio may be applied, the constituents of the formula can then be entered into the computer where it then returns the information to allow the calculation. This also offers stakeholder greater scope to assess a company not only can the interrogation be repeated numerous times but the content can also be adapted to meet the particular requirements of the user, using criteria which they deem most important. The term “wake” accounts have emerged as investor can manipulate the figures to provide a representation of the company which is most useful to them.

“XBRL will likely lead to more knowledgeable and inquisitive shareholders and analysts who will pepper earnings calls with hard-hitting questions, said Greg Adams, chief operating officer and CFO of EDGAR Online.” [8]

Whilst RSS in its purest form is decidedly remote from these changes it has had a hand in revolutionising the business world as we know it.

In conclusion, I believe that RSS is a technology likely to cause significant disruption to the traditional newspaper industry. Consequently, it also has far-reaching implications for the existing advertising model currently deployed by organisations. Whilst some discrepancy lies in Dvorak’s definition of disruptive technology (accepting this would render the discussion futile), Christensen’s is more widely accepted and thus more relevant to scope of this discussion. As is the case with many disruptive technologies, RSS improves several customs inherent within contemporary society i.e. aggregators may ensure that a higher proportion of employees take notice of the traditional office memo. Lastly, this technology resulted in the inception of XBRL; adopting this, the traditional roles of financial reporting and analysis are significantly affected as accounts can potentially be updated on a real-time basis. Therefore, financial accountants will be more responsible for dictating the structure of the accounts and less so for interpretation of standards and subsequent calculations- perhaps diminishing the claim for professional status.




References;


[1] http://en.wikipedia.org/wiki/Xml
[2] http://www.computerweekly.com/Articles/2006/11/15/219910/why-web-developers-will-need-to-know-their-rss.htm
[3] http://www.pcmag.com/article2/0,1759,1628049,00.asp
[4] http://blogs.law.harvard.edu/tech/rssVersionHistory
[5] RSS Connects PR Shops With Journalist Desktops, Lisa Van Der Pool March 21, 2005 Ad week
[6] Feed the Need: The State of RSS Advertising, Geoff Daily. EContent. Wilton: Nov 2005.
[7] “Who killed the newspaper? - Who killed the newspaper?” The future of newspapers, The Economist U.S. Edition, August 26, 2006
[8] XBRL Will Keep Investors Wanting More; Sarah Johnson, CFO.com, Se

Case Study – Compound

As Compound UK is the selling division of a multinational pharmaceuticals company, sound communication technology is imperative to ensuring effective inter-firm collaboration. Justifiably, senior management felt that the company could become more competitive by facilitating the sharing of information. Hence, Lotus Notes was introduced in 1996- but was this installation successful in achieving management’s desired outcome? As is the case with most software implementation (ERP for example), there are ways in which this process could have been improved.



Firstly, to encourage the application of the strategic selling function, a league table based on the quantity of strategic selling sheets and contact records was introduced. The caveat of this is obvious- by focusing on the volume of different records generated, emphasis on quality is significantly diminished. Whilst this problem was later identified by strategic selling managers, blatant attempts to manipulate the current reward structure in the interests of personal gain were rarely punished. To avoid such a scenario, Compound should have installed an independent Quality Review Panel. The duties of the panel would include flagging records with insufficient amounts of data (i.e. “.”) and quantifying the quality of the records maintained by each sales representative. In doing so, this would allow Compound to form a hybrid league table which takes account of the volume of strategic selling records maintained and the quality of information contained within such records.



Evidently, review of every single entry would represent a waste of resources and is not recommended. However, the panel could identify a sample of files created by each employee and grade it accordingly. The one drawback associated with sampling is that some representatives may feel that extraordinary performance in some instances would go unrewarded; thus, employees will be encouraged to cite files they are particularly proud of and feel merit attention. The flip side also exists as entries lacking in such quality may be left unnoticed, although employees will likely realise that consistently insufficient entries will be identified eventually.



In addition, the e-mail component of Lotus Notes was also used as a political resource for some employees. Primarily, this was because many 'cut throat' employees wanted to increase exposure to their superiors and were happy to be considered 'yes men’ if this would have a positive effect on career progression. As many messages received by management were deemed to be pointless, I recommend that a filtering system be applied to the email facility which prioritises mail in terms of urgency/importance. When sending any piece of mail, the creator would be required to state the associated level of importance; consequently, these individuals would be encouraged to consider the relevance of their message prior to actually sending it. If they attach a misleading label e.g. “URGENT” to a trivial e-mail, the employee may be reprimanded for wasting precious managerial time.



To reward effective collaboration, Compound attempted to motivate sales representatives by offering financial bonuses on top of their base salary. However, Kohn (1993) asserts that “rewards punish”. This belief stems for the idea that highly attractive rewards contingent on certain behaviours generates a feeling of control. If employees endeavour to succeed and subsequently do not receive a reward, this is indistinguishable from a punishment. Indeed:



“by using rewards, managers are creating a workplace where people feel controlled and this is not an environment conducive to exploration, learning and progress”[1].



Compound's staff were apprehensive towards the introduction of Notes; whilst it was promoted to more effectively pool the resources of the company, many cynics questioned the underlying intention. This concern was warranted by the big brotherly supervision which ensued.



The greatest advancement towards this collaborative objective did not come from the technology itself; it was the novel approach of James Black. He appreciated the intricacies which hinder the free flow of knowledge. Fundamentally that there must exist a trusting ethos where employees, expected to share their knowledge or experience, feel comfortable in doing so. Alexander Ardichvili conducted a study in to this area, using Caterpillar Inc as his subject. The most important barriers to sharing, identified by this study, were that participants are wary of publishing information, fearing reprisals if the data was flawed, a "fear to lose face". An element of this is apparent from the Compound case. Once the medical director began to participate in a previously fruitful forum of discussion, the contribution was seen to significantly drop off. This implies a lack of trust or cooperation throughout the company. I feel that this is the first aspect which needs to be rectified before the full benefits of the new technology can be realised.



“Research shows that there are numerous reasons individuals could have for sharing their knowledge with other members, ranging from self-esteem boosting to egoistic and conformist considerations” (McLure and Faraj, 2000)... Furthermore, Osterloh and Frey's (2000) research on intrinsic and extrinsic motivation for knowledge sharing suggests that intrinsic motives are much more powerful enablers of such sharing than are extrinsic (e.g., monetary or administrative) stimuli”[2]



The best results ensue where members actively want to pass on information, like the comprehensive and accurate filling of a Reps database, wholly for the good of the company. It is not effective to force this data from them through ill-defined incentives which only serve to skew the intentions of employees towards a more egoistic framework.



Compound does not exhibit such a proactive community nurturing the dispersal of knowledge. There is a distinct segregation within the Sales workforce, fatalists who have longs since given up their chances for progression and the career orientated who only aim to impress their superiors. There is fierce resentment towards group, who have instilled an air of competition in to the former’s job. This derogatory perspective is coupled with the Lotus Notes system which facilitated the comparability of performance.



I feel that increased monitoring is a by product of the software not deserving the attention it receives at Compound. The more functional aspects of Lotus Notes should remain at the fore, buttressing the companies market position. Perhaps the performance measurement could be shifted toward this facet, where each individuals contribution toward the corporate objective is rewarded, overruling the primitive quantitative achievements in place currently.


References;



[1] "Why Incentive Plans Cannot Work", Kohn, A.,Harvard Business Review, Sept-Oct 1993.

[2] "Motivation and barriers to participation in virtual knowledge-sharing communities of practice", Alexander Ardichvili, Vaughn Page, Tim Wentling. Journal of Knowledge Management, 2003.

Will offshoring affect UK accountants?

Virtually any knowledge work that can be carried out remotely, is geographically independent and distributable through a modem can be outsourced. [2]
There is now no effective distance between any two locations worldwide. Communications systems are so advanced that they are becoming useful in conducting more and more complex business procedures; casting a threatening shadow over the professional services of the developed world.

“A few years back outsourcing accounts work involved shipping over boxes of records and accounts with the very real possibility of them getting lost in transit. [1]
This is no longer a legitimate concern; technological evolution is a main facilitator of the offshoring phenomenon. Documents can be digitalized by scanners and then transported anywhere to be further scrutinised any number of collaborators. The communication network integral to the system is also perpetually becoming every cheaper and faster, creating a virtual presence where absolute proximity is not called for.
India is becoming a favoured destination for many UK firms toying with the concept. Its benefits include a highly educated workforce, average salaries at a tenth of the UK, widely-spoken English and an Anglo-centric culture. [2] Even the disparity in time between these two locations has been utilized. India functions approximately 5.5 hours ahead of the UK. This can be made favourable; if an urgent case arises it can be first dealt with by the Indian depot and if at the end of their day the work remains uncompleted the 2.5 hour overlap allows time to brief the staff in the UK so that the flow of work can be almost continuous, moving towards the provision of a 24hour service.

The offshoring notion is applicable to varying degrees within the range of Accountancy services. It is said to be more suited to repetitive and highly structures work – the tedium. Subjects such as tax and preparing financial statements can in this modern age be easily shipped from domestic soil. In fact it appears that many of the new location appear better equipped to tackle tasks at offer, JSA’s primary reason for moving part of its back office operation to Mumbai was because “even if we could find the quantity and quality of staff we needed in our home town of Watford we were unable to retain them long enough for them to become effective because of the routine nature of the work required.” [3]




The graph above displays the recent volume of US Tax returns completed in India, the exponential growth shown in the 3 years of empiric data has been linearly traced in 2009. On the face of it the trend depicts a worrying outlook for the future requisite of US and UK practitioners.

However this concern is qualified as Middleton believes that “the depth of the accountant-client relationship means the vast bulk of accountants' work is here to stay. If I look around our business and ask what kind of tasks might go to Bangalore, for example, the answer is probably not a great deal. A lot of what we do requires proximity to clients.” [2]

Instead of a threat to UK accountancy, many benefits may be realized through the changes. “Research by Cranfield School of Management has shown that outsourcing not only reduces measurable costs, but also heavily cuts indirect costs.” [3] Through streamlining the service provision enables the company to more effectively and efficiently direct the full attention of its available resources at the value adding services.
The role of the Accountant, in the UK at least, is evolving to encompass a more strategic and specialised approach, “helping their clients grow their businesses instead of just dealing with the often monotonous compliance work.” [3]

On global terms it appears that offshoring may be a good thing for everyone, helping to develop the economies of less fortunate regions of the world, whilst allowing UK firms to tailor their services towards the more rewarding aspects of the profession, presumably resulting in a cheaper and more comprehensive product for the client.
Whilst it is predominantly good that emerges from the process of offshoring; in order to retain the equilibrium; UK redundancies in the labour intensive, number crunching function are inevitable. To further illustrate the point the Abbey bank has plans to replace Four hundred of its UK positions with Indian equivalents. It is these factors which may cap the colossal growth recently evidenced. Political backlash is a major concern for multinationals. They maintain a fragile interdependency with national government and in many cases would be reluctant to upset this balance. The benefits will have to be substantial to embrace the risk, a risk which may deter many companies completely from embarking on an offshoring proposal; ensuring that a certain degree of the pure accountancy function is conducted domestically.


References;
[1] Special Reports: Outsourcing - Don't get left behind Michelle Perry. Accountancy. 2004
[2] Analysis: Offshoring - Offshore Accounting; Liz Loxton. Accountancy. 2004
[3] Analysis: Outsourcing - The Indian solution, Victor Stanton. Accountancy. 2006

Google Maps Mashups

The association between geography and the internet may at first seem unlikely, but their collaboratory efforts have given rise to many intriguing new applications.

A particularly useful selection from the plethora of these was;

• Starbucks Coffee Finder
• HeadlineMap
• Racetrackinginternational


Many of these innovations are inherently simple in nature, Starbucks Coffee Finder is little different. This site basically does exactly what it says on the tin, mapping the entirety of outlets across a region or city. While the product, coffee, may not hold global significance the concept may have far reaching effects regarding the way a company markets its service.

Linking information of a firms output to a designated position enhances its value for the casual browser. The potential relevance of a passing snippet can be assessed and therefore given more thought, etching the image of company firmly in the consumers mind. Were you interested in the product but found out that it was too far away to warrant further enquiry or it turned out to be just around the corner and thus worth checking out? Either way this tool offers a very cost effective way for businesses to both promote and observe their dominance within an area.

HeadlineMap “combines current stories from many world news sources with a mapping interface.” Contrary to the traditional news protocol the user first encounters a map where they can select the news items of specific locations. For businesses to react appropriately to emerging threats such as; natural disaster, new investment proposals, changes in legislation or even a local fair they must first be fully aware of their presence. Through the use of this site this monitoring process could be centralised for the entire organisation exploiting cost advantages. It may also be exercised by managers or investors who desire grounding in the external environment impacting upon the range of operations. Personally, it allowed me to research the on goings of an area where one of my friends was serving.

A more flippant map was found at racetrackinginternational.com which charted the progress of the Baja 1000, an off road race held in Mexico. For the avid fan, how else could they retrieve almost real time (maps are refreshed every five minutes) and continuous commentary which could be accessed at any point throughout the entire event? The relative standings of each competitor is portrayed by icons on the map displaying a comprehensive summary of the race.

The scope and diversity of mashups is immense with every additional creation re-asserting Google’s unrivalled power within the virtual world.

References;

http://googlemapsmania.blogspot.com/
http://www.findbyclick.com/coffee_s.html
http://www.headlinemap.com/
http://racetrackinginternational.com/tracking/

Community Walk - map

CommunityWalk Map - F1 - 2006

How could this website be improved? - http://www.icas.org.uk/site/cms/contentChapterView.asp?chapter=2

“What makes a great website? The short answer is 'one that achieves your goals.' It should also be useful and easy to navigate.”
[Tanja Lian Sablosky, 2003]

My first impressions from entering the site were that the home page was cluttered, instead of initially directing the various cross sections of its users, it attempted to immediately satisfy their craving, posting adverts and announcements which in the main would be irrelevant.

“One of the Web's strengths is the volume of information available. That is also one of its weaknesses.”
[Tanja Lian Sablosky, 2003

I feel that there is much which could be learned from the Strathclyde University homepage. Here the web surfer encounters a more refined, user lead page, where the quest for information begins logically. First the user is identified, according to their particular status they select the most appropriate label allowing the resultant content to be more specifically tailored to their assumed interests. While there exists a tab down the right hand side of the page, however it functions more like an index. It does not segment the potential stakeholders and may often be missed or obscured by the central adverts which are given priority.
"People are drowning in information, but are thirsty for knowledge."

A website such as this should be perpetually updated, as it is a reference point for many graduates seeking employment or practitioners confirming the most current accounting treatment. The lasted revision of the “statement of guidance” was made on the 02/09/2004 is this two year dormancy adequate? The site is deficient of an RSS feed which would also enhance its value for users. A limited number of vacancies are published on the site, however if this was the only aspect that you were interested in then this information would be much more efficiently communicate via an RSS aggregator which the site has failed to acknowledge yet.

“Great Web sites share everything they learn and hear (that's relevant of course) with their users. Give behind the scenes accounts of your latest site features, go open source, start a newsletter, and you'll get more than you give.”
[Tanja Lian Sablosky, 2003

There is currently no supplements or handy downloads that may to entice new browsers, this is also evidenced by the relatively low number of hits returned form a Google link search only 116 other site directly feed into the ICAS page. Returning to the aspect of “sharing” currently only one way communication is possible with the website via the “contact us” link. Interactivity is yet another missed opportunity. This facet would be particularly useful given the subjective nature of accounting. Providing a mechanism for discussions may enhance clarity and iron out gremlins, where the findings can be easily referred back to by people suffering similar woes. It may also raise further deficiencies which can be adhered to by the ICAS web designers, evolving its current offering to best serve the needs of its users.

References;
• http://www.icas.org.uk/site/cms/contentChapterView.asp?chapter=2
• Rating your Website, Tanja Lian Sablosky. ABA Bank Marketing, 2003

What might be the "next big things" on the internet?

The internet has facilitated many monumental changes in the traditional business function. Its wind of change is now firmly fixed to rock the boat for the steadfast bean counters. An un-relinquishing thirst for knowledge has been exposed by the internet as a consequence of the ease of research. This has prompted these changes which are currently being pushed by the combined efforts of the largest accountancy firms;

“In their Utopian fantasy, out would go quarterly reports loaded with complex historical figures and rules-dictated footnotes. Instead, readily accessible updates on a company's state of health would be posted in (almost) real time on the internet.” [3]

This recent announcement, if it pans out in the way which has been proposed will completely revolutionise the current accounting practice and pose significant implications concerning my future prospects. This is the reason I chose to concentrate on this emerging challenge.

Investors and other groups of stakeholders feel that the current static reporting is inadequate within today’s fast track business environment. The widespread adoption of ecommerce has “made it possible to gather more data significantly faster than before.” [1] Current processes to record these rapid transactions are not fit for the challenge requiring an entirely new system.
Many of the essential components required for the transition to “Real Time” reporting are already in place. Since the beginnings of the 21st century many large companies have toiled with the implementation of Enterprise Resource Planning (ERP) systems. A full blown ERP system may be wholly uneconomic for the small to medium sized organisation. In response slim lined versions are becoming available from firms such as; AccTrak21, to accommodate the revisions for all.
This technology is designed to centralise the information output of every distinct activity within the organisation. The goals of this software are comparable with the intentions behind the real time proposal, namely to un-obstructive the data collection and interrogation process. By effectively posting this information online via the companies website, replacing the archival of financial reports. Up to the minute results become assessable for any interested party to analyse and interpret.
“It wasn't too long ago that corporate accountants could take their time assembling, analyzing and packaging financial data for executives. It took a while to massage the numbers, and that wasn't a problem because the competition was moving at the same sluggish pace”. [3]
Whilst eventually every organisation would be subject to these new requirements, so that the information advantage would be cancelled out. It does raise concern for the early adopters. Competitors would gain insight into the current sales patterns and mark up. From this knowledge they may be able to adjust their policy to counteract these observations appropriately.
The also exists a suitable format to display this information, XBRL, eXtensible Business Reporting Language. This is a derivative of the present XML / RSS technology. Not only is un-molested data presented immediately to the user, it is also made vastly more interrogatable through the use of these tags. The job of the analyst is seriously under threat from the enhanced capabilities of the new system. Individuals can more readily filter specific data they may require, the creation of “wiki” accounts.
This is the predominant facet that makes managers less than cooperative to join. As information is published in near real time there is little opportunity for managers to be selective in their announcements, there may also be a distinct lack of narrative to explain or qualify the results.
While this real time was intended to empower investors, “the development of such access would create major problems for both management and the financial world - more problems than it would solve.” [1]

Real time reporting is bound to favour select industries or company practices. Variants across the results may lead to in appropriate conclusions being drawn. For example; the seasonality of some business may not be reflected well by the new system which may induce investor prejudice and short-termism amongst the markets. In theory the requirement of keeping accurate information should benefit the company however this may not materialise is it is not comprehended correctly by investors.


Bibliography;

• [1] Real-Time Accounting, Paul Ashcroft. The CPA Journal. New York: Apr 2005

• [2] Harnessing technology: Real time, real problem? Abid Shah, Andrew Higson. Accountancy. 1997

• [3] Real-Time reporting, Maria Trombly. Computerworld. Framingham: May 8, 2000

• [4] Opening the books; Auditing firms, The Economist, 2006

• [5] http://www.acctrak21.com/ecommerce.shtml

Identify the key points in this case. What is the hidden agenda?

Omnexus


The case involves five large plastics manufacturers amalgamating to form an online market for their produce. Through offering a concoction of the differing attributes and resources from each of the founding members it was hoped to expand the retail division, opening up the market to potential customers where previously there existed no service that satisfied their needs.

It was conceived as a neutral marketplace to remedy the inefficient way the plastics industry had operated previously. Moving online, the administration function could be dramatically revitalised reducing the input required from counterparties to the transaction. The quest for a suitable material was also made significantly more straight forward, through browsing capabilities and ease of comparisons.

The work of the founders was not entirely onerous, there existed motivation not directly interoperable that lead them to undertake such a cooperative venture. The project was not solely implemented by the plastics firms; there were many other organisations that had a significant hand in its development. One of the partners was Accenture, formerly Anderson consulting. They muscled themselves into this role pushing out McKinsey & Company shortly after their appointment. Although the critics to this appointment were effectively fobbed off stating that Accenture were the recognized global leader therefore better placed to develop the e-market. Possibly amidst all the collusion, a malleable ally was required to choreograph the unison. Anderson, prior to it collapse under contentious circumstances, may have served a selection of the founding suppliers. This lucrative relationship may have been hoped to have extended through Omnexus.

A further, more complex web of interrelations developed. IBM was also heavily involved in facilitating trade through the e-market. IBM had external ties with Ariba (a rival software company) that were contingent upon the success of Omnexus; while Ariba also had influence over the technological design of the site. The culminated in a family of organisations with both the incentive and capability to scratch each others back. These affiliations did not end here, as the conglomerate nature of Omnexus quickly emerged as it established trade relations with Chemcross and Conferos, similar plastic procurement sites operating in other regions. These mergers were conditional that Omnexus was granted more trade having rapidly tapped into the global market

The site focused only on one division of the Thermoplastic Polymer Processing Market; Injection and Blow Molding which accounted only 25% of the revenue generated by the industry. Whilst it may have been necessary to start on a manageable scale, no significant developments were to be observed thought the entirety of the case. Once again a convincing argument was proclaimed, referencing the significant growth experienced in the US markets. Maintaining my scornful perception, this rationale may too have been tainted as all of the factors above imply an underlying collusion objective. Were it the case that this sector of the polymer market displayed the most pronounced competitive tendencies, then the main suppliers may seek to combine their efforts in a more proactive way, to restrain the antagonism towards each other, through discrete use of price controlling, potentially?

Further entry to supplier status, was restricted, initially by the suppliers themselves. Those who had yet to cotton on to the plan, perceived that participation
“would result in greater price transparency”. Within the year a further nine suppliers were added to the consortia further emphasising the existence of a perfect market. This facet was not taken at face value by many however; comprehensive assurances had to be made to silence the scathing “anti” trust voice.

Concerted efforts were aimed at retaining the independence of Omnexus’s board, which coincidentally consisted of a member from each of the founding suppliers. This created a cosy environment, and plausible alibi for covert discussions to take place before a limited audience.

“Legal counsel had to be present whenever the founding members were in the same room because topics regarding pricing or other consortia related conversations were sure to arise.”

While controls were in place to combat the oligopoly powers from reaching mutual consensus I do not imagine that the presence of minders inhibited discussions completely. A monopoly outcome was advantageous to every one of the suppliers, why else would they actively try to integrate their functions indiscriminately under a single banner? The costs savings addressed in the sales pitch predominantly benefited the buyer. I could see little legitimate reason that would encourage the distributors to pool their efforts in the way that was observed.

While the site appeared to get of the ground without much distress, the Federal Trade Commission is bound to be keeping a watchful eye over future developments.

Assignment - Geneva Case Study

The integration of an Enterprise Resource Planning (ERP) system is generally deemed to improve the fluidity of the order-process cycle. In other words, ERP allows for improved assimilation of all processes inherent within the business. Whilst the rationale for ERP implementation can be substantiated in reference to a variety of factors, we believe that the following three were most vital in the Geneva Pharmaceuticals case:

• Rivals’ products can be used interchangeably
• Need for ‘on-demand’ supply function
• Manufacturing is scientific and requires high levels of cohesion between processes.

As generic drugs are indistinguishable in terms of composition, it is vital that Geneva is able to supply retailers/consumers at a competitive price within a sufficient time-span. Moreover, increased transparency in the amount of surplus output would allow Geneva to take advantage of the emerging internet market for generic drugs. Owing to this realisation, the first two key points are interlinked: if Geneva is to attain a reasonable market share, it must be able to satisfy orders promptly. As previously insinuated, ERP’s ability to improve cohesion between different departments was a fundamental factor in Geneva’s decision to implement the system. The benefits of ERP implementation are related to the complexity of operations- as Geneva’s processes are “scientific, controlled and highly precise”, their mangers evidently deduced that the integration benefits of ERP would allow for greater consistency in production and more stringent monitoring of operations.

Without question, implementation of ERP is a complex and often prolonged process. In order to ensure that operation disruption is minimised, Geneva were faced with several dilemmas. In our opinion, their initial choice of consultancy firm, Whitman-Hart (WH), was a contributing factor to the problems experienced during the first phase of implementation. Granted, WH had prior experience of R/3 execution. However, their distinct lack of familiarity within the pharmaceuticals industry perhaps meant that a significant proportion of their time would have been allocated to discussing a course of best practice whenever a contentious issue was discovered; had Geneva chosen a firm with both technical knowledge and relevant experience, such discussion would not have been necessary. Furthermore, the selection of a more experienced consultancy firm would enhance the competitive advantage gained through ERP implementation; had Geneva been able to hire a firm previously employed by a rival manufacturer, they may have been able to gain an insight into the manner in which their competitors integrate their systems.

According to Somers and Nelson (2001)[1], the most critical factor in determining the success of ERP implementation is the extent to which management staff support the process. By encouraging employees to embrace the fact that their traditional job roles were changing, Geneva was able to ensure that staff were fully committed to the transitional process. Hence, employees developed a clearer understanding of their responsibilities and consequently were able to give a more accurate insight into the detrimental effects of the old system. Without question, this decision is underpinned by the ‘people before process’ mantra inherent within most successful implementations of ERP.



The transition to an ERP system is significant, for any business, in terms of cost, time scale and a change in the overall structure and organisation of departments. The benefits associated with this revolutionary business model are also of a similar scale and are rarely ever achieved as smoothly as proposed during the planning stages. Implementations of ERP have been initiated by many well renowned organisations to widely varying degrees of success. While ERP remains in its infancy, there is much still to be learned regarding how to consistently implant the technology within the business environment.

As may be expected the majority of the issues were encountered during the initial stages; as explained above, the root cause could be traced back to the limitations of the consultancy firm, Whitman Hart.



“SAP’s rapid implementation methodology called Accelerated SAP (ASAP) was selected for deployment, because it promised a short implementation

cycle of only six months!”



Whilst this group were technically proficient, the above statement demonstrates their naivety of the business context. This deficiency severely hindered the progress of Geneva’s ERP system, where little had been achieved four months since the inception of the project. This may seem totally unacceptable but precedent tells us that the application of ERP is not a speedy process, “54% take longer than 2 years to completion”[2]. Contrary to the WH “ASAP methodology”, it was this lack of foresight that encouraged many of the failings of phase 1.

Installation was not differentiated from implementation; little regard was paid to the specific requirements of Geneva. What WH had produced did not fulfil the needs of the corporation. To combat this, ERP guru Randy Weldon was employed to direct further proceedings. His experience had taught him “ERP was fundamentally about people and process”.



The approach to stages 2 and 3 were markedly different to that which WH had pursued- the haste to complete the project was replaced with an unsparing commitment to the development of a useful end product. The diminishment of constraints allowed the remainder of the implementation to flow in a more frictionless manner. The Y2K deadline was given less significance, the project was granted as much time as it required. Staff were also encouraged to buy in to the changes by more proactive training schedules. Focusing on how their role would evolve with the system and less concerning the system itself.



The introduction of ERP was treated less as a new software package and more applicably as a colossal culture change for the firm. ERP instils a complete interdependency between the segments of an organization. As the data is centralized, each subsequent department in the chain is reliant upon the accurate input from a previous division. It is essential that employees uphold the integrity of the system. Geneva’s gradual acknowledgement of this facet is evidence from the text. During the preliminary discussion, preceding phase two, much greater involvement was encouraged from the key users. They were given increased opportunity to raise concerns and suggest improvements enabling further progress in a much more cooperative and social fashion. This is the main discovery from the case and is substantiated by the findings from previous implementations of the technology. Successful incorporation is obtained only where the system is unequivocally adopted throughout the entire organization.



References



[1] H. Akkermans and K. van Helden, "Vicious and virtual cycles in ERP implementation: a case study of interrelations between critical success factors", www.palgrave-journals.com/ejis/journal/v11/n1/pdf/3000418a.pdf



[2] Christopher Koch, "The ABC’s of ERP", http://www.cio.com/research/erp/edit/erpbasics.html



Additional Reading



Ben Worthen, "Nestle’s ERP Odyssey", CIO Magazine, 2002

Christopher Koch, "When Bad Things Happen to Good Projects", CIO Magazine, 2004

Will the internet reduce prices?

Will the internet reduce prices?


“The increase in accessibility to high-speed connections and the growth of broadband has made online shopping a more pleasant experience than ever before. Online shopping is open 24 hours a day, without the effort of travelling to a mall and dealing with the hassles of crowded stores with overworked staff.”
[Valerie Merahn, 2004]

I feel that the major impact of ecommerce has been in promoting consumer awareness. The marginal cost of obtaining product information has been slashed. This enables those with a desire to be informed access to masses of information in order to elevate their bargaining power and make much more educated decisions. The web has facilitated far greater disclosure of a product’s entire range of attributes allowing comparisons between products and outlets to be conducted effortlessly. Thus, distributors must perform the same function ensuring that they remain competitive in the markets place. In the main consumers are becoming ever more sophisticated and will vote with their feet where prices step out of line.

Designated websites have established themselves to further ease the consumers’ task, namely; Froogle.com, BizRate.com, mySimon.com, NexTag.com, PriceGrabber.com, Price SCAN.com and Shopper.com. Here the interrogation process is completely outsourced. Once the results return they can be sorted in ascending order of price, presumably with the most attractive option appearing at the head of the queue. This system proves most effective where the object of desired is homogeneous, i.e. price is the only feature that differentiates the prevailing competitors.

Empirical evidence has uncovered that “as price becomes easier to search in comparison to other search attributes, customers may base their choices predominantly on prices”.
[Pingjun Jiang, 2002]

The underlying concept driving the observations above is “IT parity” where modern technology has diminished the information gap between the customer and supplier. Both parties have access to the same resources. Correspondingly, this reduces the consumers’ dependency on the outlet as they can gain broader and more independent knowledge equivalent to that of the in house sales expert to form their conclusions.

Recently I discovered a new artist, overwhelmed with excitement I had to have the album. Below is a list of options and constraints in order to satisfy my craving;


Source Cost Conditions

HMV store £10.00 -

HMV - online £5.99 3-5 day wait, Impulsive and wanted it now!

Illegal Download - Morality issues


The price divergence offered by the same company is plain to see, how do the offline counterparts justify this discrepancy? There are issues with the logistics of purchasing online. How did I value having to wait almost a week to satisfy my craving, incurring the risk that it may be lost in the post and then having to haggle with their customer services department to possibly get another copy sent out only to wait yet another week? Only for it to arrive when I am not in and thus have to walk approx 1 mile to the post office, probably in the rain! In response, I opted for the security of traditional methods this is the comparative advantage physical shops hold and must retain.


Downloading or effectively stealing the album throws up interesting issues regarding the effect of the World Wide Web on the price certain goods. Without the internet, this option would not be possible. Intuitively you may perceive this may have detrimental to record sales, however the opposite is proclaimed true, where “due to sampling: consumers are willing to pay more because the match between product characteristics and buyers' tastes is improved.”

[Jyh – Shen Chiou, Chien – yi Huang, Hsin – hui Lee, 2005]


The internet as a retail base has produced contrasting results, whilst driving the price of online goods through ease of research; it has allowed the offline price to rise in some markets pairing the customer’s desire more closely with the specific product. Therefore evidence confirming the essay question is inconclusive. The online market for many good is extremely competitive with many firms operating precariously close to the margins. Can this continue, not for sustained periods at least. Therefore, internet prices will fall inline with the cost of manufacture.





Bibliography;



• The Antecedents of Music Piracy Attitudes and Intentions; Jyh – Shen Chiou, Chien – yi Huang, Hsin – hui Lee, Journal of Business Ethics, 2005

• Priced to Go: A Quick Search for Soda, Valerie Merahn. Brandweek, 2004

• A model of price search behavior in electronic marketplace, Pingjun Jiang. Internet Research, 2002

• The impact of shopbots on electronic markets, Michael D Smith. Academy of Marketing Science. Journal, 2002

• What’s price got to do with it?, Carl Steidmann, Progressive Grocer, 2006

Competitio.us

Competitio.us; just one of a flurry of innovative products arisen as a result of the increased capabilities of web 2.0. It provides a service monitoring designated web sites, and relays any new publications back to its client.

Your competitors’ web sites have a wealth of information about their products, actions, plans, and strategies. Indeed, according to some researchers, “Track your competitors' web sites, and you’ll be able to track them!”
[Srikanth Chari, 2006]

Using this facility companies can effortlessly keep themselves informed regarding the published information of their main rivals. A deep insight can be extracted form a companies’ website; for most this initial point of reference when conducting research into a companies therefore it is in the companies interests to keep this source in line with current activity. That any alterations which may have a bearing on its potential as an investment candidate are fully disclosed, in a flattering light.

Press releases, News or media coverage, Products and solutions, Events and web seminars, Financial or investor relations, Executive team and board and Job openings are just some of the features targeted by the service. For example the simple vacancy advertisement could suggest much about a company. Revealing a new direction it intends to pursue or if they are strengthening a particular department or hiring people in a new location? Each of the scenarios above would have repercussions for its competition, which can be minimised or counteracted if advanced notice is given. This is the role I see for this technology to raise issues, for further investigation.


Of course companies could track these sites themselves, setting up RSS feeds, where possible, from each of their opponents sites would create a crude version of what Competitio.us offer. Establishing and operating this system, would expend a significant amount of the companies resources and as feeds can only be subscribed to for limited postings it may still require traipsing through all the web pages and documenting anything new or yet still relevant, a value adding process?

There clearly exists a market for this service, however Competitio.us itself has competition. A finding of a simple link search on Google produced the following results;

Firm Links

• Competitio.us 31,600

• Google 319,000,000

• EBay 71,100,000

• Semphonic 536

• Watch 360 822


This provides a primitive notion of public awareness as it measures how many sites indicate to wards the subject’s page. The conclusions which can be drawn from this are that while vastly more sites promote the Competitio.us brand than either of its main adversaries it still lags well behind the heavy weights of the virtual world. This is to be expected as the company is still in its infancy however it does allude to that fact that Competitio.us’s comparative advantage lies within its more renowned name. This attribute would stand it in good stead as a take-over target; significant returns can be sought by investors in web start-ups where their revolutionary idea or creation has been latched on to by a major force such as Google. Examples are widespread; Google’s acquisition of Blogger, Writely and Utube. In addition to expanding its range of tools it also gains valuable user data and statistics. In the case of Blogger this software gave Google a foot in the door in establishing its own version, whilst thinning out the competition and gained access to over 2 million blogs which it could utilise to further more refine its search results. An optimal situation for all parties, especially given the most recent scenario where the founders of Utube were compensated with $1.6 billion Google shares.

This is the scenario hoped for by Competitio.us investors. Currently the service is offered free of charge, almost certainly to accumulate a valuable client statistics to entice the data hungry predators. The other firms offering a comparative product have been successful in monetising by charging for it’s premium service, as much as $1000 per month. Clearly this is an option available to the management of Competitio.us who have already confirmed that they are developing such a hierarchy within their range.


“The basic idea is that it’s a tool for web start-up teams to keep track of their competitors.”

While I think that this is a very useful product, the main drawback I foresee it that companies especially those who are web orientated is that it may not always be that simple to determine who your main competitors are. As much effort may be required in tackling this question as would be involved in keeping abreast of new developments within these. Competitio.us provides a quick and effective solution to the latter which I am sure will appeal to a tremendous volume of companies. Although this goal is not solely pursued by Competitio.us, I am inclined towards their approach, firstly publicising their brand with immediate returns absent from the priorities list, at least form now. I feel there great potential for success inherent within this concept and would not discourage the addition of this into a diversified portfolio of securities.


Bibliography;

• Do You Know Who Your Competitors Are? James Allen, Kara Gruver. Brandweek. New York: Apr 11, 2005.

• Keeping an eye on the competition, Stephen J Mraz. Machine Design. Oct 6, 2005

• http://www.techcrunch.com/2006/10/04/competitous-track-your-competition-online/

• http://www.imakenews.com/scip2/e_article000334573.cfm?x=b11,0,w

• Why track competitors' web sites? Srikanth Chari, SCIP.online Monday, October 30, 2006

Microformats

MICROFORMATS

What are microformats and why might we want them?

Word Count; 593, excluding headings and entries in the Bibliography.


Objective;

To make web site data more meaningful to machines


“Nowadays the volume of the information on the Web is increasing dramatically. Facilitating users to get useful information has become more and more important.”
[Lixin Han, Guihai Chen; 2006]

A critical flaw in the first inception of the web that it was designed primarily with people in mind. Web 1.0 was basically a publishing platform where the end user were the people deciphering the information presented on their screens. As the web grew, immense quantities of documents became available. This shear volume of information created a severe problem - cluttering.

“Users are not satisfied with the low precision and recall. With the emergence of the Semantic Web, this situation can be remarkably improved if machines could ‘understand’ the content of web pages.”
[Microformats Speed Access to Web Data]

This is the solution proposed by microformats, is to build on the existing resources by modifying the visibility of hosted information. In effect, tags are attached documents to aid the speedy recall of more valuable and relevant information.

Microformats are a set of simple, open data formats built upon existing and widely adopted standards. Instead of throwing away what works today, microformats intend to solve simpler problems first by adapting to current behaviours and usage patterns (e.g. XHTML, blogging)
[Microformats: Paving the Cowpaths]

This is a particular format that can equally be interpreted by both man and machine.

Currently search engines such as Google, retrieve information based on the keyword entered into the search bar. They prioritise their findings based on the position of the key word within each result, i.e. presence of word in heading would be deemed significant. The frequency of the search word within the main body of the text in conjunction with the number of hits achieved provides the crude basis indicative of relevance,

“The widespread availability of machine understandable information on the Semantic Web offers some opportunities to improve traditional search. If machines could “understand” the content of web pages, searches with high precision and recall would be possible.”
[Lixin Han, Guihai Chen; 2006]

However, for a while ate least there exists a chicken and egg situation, nobody willing to exert additional effort in annotating posts without the technology in place to utilize them. While the web developers see no need to produce the mechanisms if there is little for them to search, this facility is near at hand although

Micro formatting exists on a limited scale today; bloggers were amongst the first to harness the capabilities of micro formatting earlier this year. Edgeio is a company that has taken the concept and developed it further. In a similar fashion to eBay they specialises in hosting classified adverts posted in the main by individuals. Its comparative advantage lies in the fact that the content of each is made searchable using microformats, enabling much more efficient detection of the item worldwide.

I feel that there is real potential for integration of this facility with the established capabilities of RSS. By setting boundaries or specific attributes regarding a product the user could simply sit back and wait for corresponding matches to be relayed back to their aggregator, as is the case for news items currently, genius! This new invention almost completely removing the efforts required in tracking down that perfect item.

The use of micro formats will structure the information on the web in a greatly more organised manner, making it infinitely more flexible, which in turn opens the door for a creative new array of applications, which can manipulate this data in any desired fashion.


Bibliography;

• The Big Picture on Microformats, John Allsopp, Published on August 28, 2006
• WHEN THE WEB STARTS THINKING FOR ITSELF, David Green. Information World Review. Oxford: Dec 2002., Iss. 186; pg. 37, 2 pgs
• Microformats: Paving the Cowpaths, http://www.windley.com/archives/2005/07/microformats.shtml
•
MICROFORMATS SPEED ACCESS TO WEB DATA, IT Week, September 18, 2006
•
Microformats go mainstream, a shel of my former self, June 24, 2006 Saturday 11:46 PM EST
• http://en.wikipedia.org/wiki/Microformats
• http://blogs.zdnet.com/BTL/?p=3232
• http://en.wikipedia.org/wiki/Semantic_web

The Long Tail Theory

The now unquestionable reliance upon the internet has had significant impact upon the business sector, little more so than in the world of retail. The major outcome being that anyone can find exactly want they are looking for. Providing you are not sufficiently remote that access to the internet is obtainable, the potential consumer has an almost limitless array of drains with which to dispense their wealth.

This new found freedom has had many implications for the traditional retail sector, one of the more major developments is summarised by the “Long Tail” theory. This notion was first proposed by Chris Anderson via a “wired” magazine article in October 2004.

The principle behind this being basically that consumer preference is not suppressed. The boundless reach of the internet ensures that the customer is no longer constrained by what is available in their local “bricks and mortar” store. Unique tastes can be much better catered for, with resulting knock on effects for what were once the staple products for a firm.

“Even if you have one-in-a million tastes, there are still over a thousand like-minded consumers who share your niche tastes.”

[Erik Brynjolfsson, Yu “Jeffrey” Hu, Michael D. Smith; 2006]

This is the central pivot around which the Long Tail theory operates, however requiring the vast audience of the internet to bolster what would once be considered minority interests.

This theory is graphically represented below;

Typical Sales distribution of a “Bricks and Mortar” retail outlet;

[figure I]

Resultant distribution of Sales from an online competitor;

[figure II]

Note the differences;

“In many cases the infrequent or low-amplitude events—the long tail, represented here by the yellow portion of the graph—can cumulatively outnumber or outweigh the initial portion of the graph, such that in aggregate they comprise the majority.”

[Wikipedia, 2006]

The key factor that determines whether a sales distribution has a Long Tail is the marginal cost of inventory. This is where the online firms have a significant comparative advantage. The physical limitations of a shop inhibit the range of products it can display. In order to fully utilise its resources it elects only to stock those products that are destined to turnover most readily.

The online firm can choose to locate anywhere it likes as the customers do not enter the facilities physically the firm does not have to consider its proximity to a local market. In response establishes itself where the comparative cost of rent and rates are lower. Not hindered by the congested buildings on the high street its warehouses can be sufficiently large to accommodate a massively more enlarged product range. It becomes much more economically viable to hold unpopular products for sale.

For example;

[Erik Brynjolfsson, Yu “Jeffrey” Hu, Michael D. Smith; 2006]

With the inevitable effect that the demand for the most popular products is reduced, creating the much flatter distribution of sales as depicted in figure (ii).

The implications of this may be that with reduced market demand there lies less incentive for firms to produces mass market products. Sparking the end of the corporate giants?

In any case the wheels of change have been set in motion, data from Amazon.com clearly show that a large proportion of its sales consist of “titles that wouldn’t normally be found in brick-and-mortar stores”.

[Erik Brynjolfsson, Yu “Jeffrey” Hu, Michael D. Smith; 2006]

Niche products will receive a dramatic boost as there is now exists a channel for their voice to be heard by the public. A revert back to smaller, more organic organisation made more feasible as the relative costs of distribution has fallen with the widespread application of new technologies.

As regards the Accountants’ interest in this state of flux;

It is apparent that a new form of client will be presented before them. Every likelihood suggesting that they may arise from a less sophisticated environment with access to greatly reduced resources; in comparison to the multinational corporations whose connotations with the creation of “chart toppers” once lay unchallenged.

The profession must evolve to accommodate this less well informed clientele, with appropriate mechanisms in place to allow them to decipher the level of information required from them; while at the same time placing some onus on the specialist to see that the customer understands the process and are not bamboozled.

Such developments in the secondary market, as detailed above, may instigate a similar response in the tertiary sector. In order to fuel the existence of the newly established firms a well structured business plan will need to evolve. Accountants are ideally placed to expand their implementation of this service. To ensure a stable client base irrespective of perpetual changes in business at large.

“Once all of this is in place, the natural shape of demand is revealed . . . . [T]hat shape is far less hit-driven than we have been led to believe.”

[Rick Ferguson, Kelly Hlavinka; 2006]

Bibliography;

From Niches to Riches: The Anatomy of the Long Tail

Erik Brynjolfsson, Yu “Jeffrey” Hu, Michael D. Smith

June, 2006.

Superstars and Underdogs:

An Examination of the Long Tail Phenomenon in Video Sales

Anita Elberse, Felix Oberholzer-Gee

The long tail of loyalty: how personalized dialogue and customized rewards will change marketing forever

Rick Ferguson, Kelly Hlavinka.

The Journal of Consumer Marketing.

2006 Vol.23, Iss.6; pg. 357

The Long Tail

http://en.wikipedia.org/wiki/The_Long_Tail; assessed 11/10/06

EditGrid v Excel

Accounting Information Systems [40428]

Weblog 2

Compare Excel and EditGrid in terms of desktop app v web app, and from the perspective of an accounting user.

Word Count; 703 [Excluding Headings and Bibliography]

Spreadsheets are a primary tool for any business. It is upon this attribute that the Microsoft Corporation has capitalised fully.

Developments instigated by “Web 2.0” are having detrimental effects on the existing reign of the desktop-based application, such as Excel. The dominance of this package is under serious threat from many different contenders; EditGrid, Google Spreadsheets, Zoho Sheet.

“It seems as if the era of Web-based software is upon us.” [Wildstrom, 2006]

While this technology is very much in its infancy, commercial users are reluctant to become dependant upon it, yet.

“The technology supporting them is relatively new, and they have yet to struggle with managing a heavy user load. Their longevity is questionable, especially since they have unknown financial models for long-term support.” [Greg, 2006]

Many of these packages are offered free of charge, this in stark comparison to the ‘measly’ £298.97 for the Microsoft equivalent. This option becomes decidedly more attractive to the personal or small business user on a budget. Whilst insignificantly compromising on the product features, but hey, where you ever really going to use the “HYPGEOMDIST” function in Excel?

It is true that the web-based competitor (EditGrid) still lags behind the likes of Excel in this area, but for the most part, other than highly specialised calculations, it is more than adequate. The interface is also familiar, suspiciously so, for those who have experience in operating Excel.

The web system is far less streamlined and involves communication with servers, so is bound to be less than instantaneous. I experimented with EditGrid to test out this concern and found that delays, if any, were immaterial and did not detract from the utility of the package. Internet speeds are also bound to advance over time, rendering this problem less applicable.

The most remarkable advantage of the web-hosted product it the collaborative facility, where remote colleagues can simultaneously work on the same document. Where previously this was only partially possible via email, which was very cumbersome!

“Communications technology has shrunk the globe so that people no longer have to be in the same location, or even in the same country, to work effectively as a team.” [Gordon, 2005]

Evolution of such features offers up great potential for the business user; no longer constrained by their physical departments. Auditors who may spend much of their time travelling between clients may find it inconvenient to gain assurance from the office. Using EditGrid findings can be proofread and edited by whoever is invited to participate.

That said the principle drawback with the new system is security, although continual advances are being achieved in the safeguarding of information. The fact remains that the physical copy of the file is not saved directly on to your hard drive. Therefore may not be a viable means to publish confidential or highly sensitive data.

“Of the 2,249 new software vulnerabilities documented by Symantec during the six-month period -- the highest number it has recorded -- 69% were in Web applications.” [Richmond, 2006]

For the time being is hard to imagine any dramatic migration from the conventional computer based system. However, I feel that it is a real innovation for the near future. As the server performs much of the processing, the desktop becomes resigned to more of a viewing platform, potentially allowing its physical characteristics to be modified to accommodate this new role. Which the mobile phone is almost sufficiently sophisticated to endorse.

A revert back almost like the outdated mainframe set up where the computing function was carried out centrally and each party has a terminal from which to operate from. This has many implications for the travelling professional, lightening the load is it were.

Form the host companies it may save significant expenditure purchasing, upgrading and maintaining highly depreciating assets. Holding thousands of computers is a security threat in itself. Not only are they a potential target for a thief they may also contain venerable information, prevalent to the owner, clients and suppliers. If this were held internally, access restriction may be easier to enforce.

Currently the relative costs and benefits of each is in near equilibrium, I do not predict it will be long before this balance of power is markedly shifted.

Good Luck Microsoft!

Bibliography;

• The Phone of the Future: Wired To Run Your Life, Tricia Duryee; Seattle Times technology reporter

• Waiting for the Web Kym Gilhooly. Computerworld. Framingham: Dec 18, 2000.

• Do Your Virtual Teams Deliver Only Virtual Performance? Jack Gordon. Training. Minneapolis: Jun 2005.Vol.42, Iss. 6; pg. 20, 5 pgs

• Web-Based Software and the New Desktops on the Web Greg R Notess. Online. Medford: Jul/Aug 2006.Vol.30, Iss. 4; pg. 39, 3 pgs

• Hackers' Use of Web Applications in Attacks Rises Riva Richmond. Wall Street Journal. (Eastern edition). New York, N.Y.: Sep 25, 2006. pg. B.5

• Look Out, Microsoft Office Stephen H. Wildstrom, techandyou@businessweek.com. Business Week. New York: Jul 10, 2006., Iss. 3992; pg. 16

• http://www.amazon.co.uk/s/ref=nb_ss_w_h_/202-6702147-0247067?url=search-alias%3Daps&field-keywords=microsoft+office&Go.x=0&Go.y=0&Go=Go