IMAT5211 E-commerce Systems: Disruptive Innovation and Migration

This report delves into the realm of e-commerce systems, beginning with an original research question concerning future disruptive innovations in the industry, particularly focusing on the impact of technologies like machine learning and blockchain. It then presents a detailed migration plan for UGO organization, a retail business, to develop its e-business capabilities from scratch. The report analyzes the impacts of e-commerce on the organization, weighing the benefits such as overcoming geographical limitations and gaining new customers against potential drawbacks like security and privacy concerns. It further outlines the major benefits of e-commerce, including cost reduction and increased market reach, suggesting how these benefits can be measured. The report uses extensive literature review to support its arguments and recommendations, providing a comprehensive overview of the e-commerce landscape.

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1. An original question in e-business that would be worth further research
In the current technology pervasive world where we live in, technology has become a
necessity for businesses. As such, its adoption in the e-commerce sector is no longer an option
but a matter of compulsion; this has been the reason why there have been competition in major
five key determinants in business including communication, convenience, cost, time and quality.
The five aspects of business are also critical when it comes to competition in the current
competitive business environment (Yoo, Henfridsson and Lyytinen, 2010, pp.724-735). It is
essential for every e-commerce to stay current as far as the technological innovation is
concerned.
The e-commerce has experience paramount innovation since it begun. It started with the
innovation of a simple “click here” link to invention of cloud computing to mention a few.
However, that seems to be just but a start. The sector is yet to face a disruptive innovation in the
ever changing technological innovation environment. This is also based on the fact that
customers have become tech savvy and as a consequence, business have to keep the pace of
technological innovations to meet their customers’ needs (Govindarajan, Kopalle and Danneels,
2011, pp.121-132). As such, this area has captured the attention of many researchers. However,
many research majorly focus on the sustainable innovations in the e-commerce industry; the
disruptive innovation has been rarely looked at. This has precipitated the need to venture into this
critical aspect of the technological innovation.
In this rationale we propose a research question for the study. The question include: What are
the future disruptive innovation in the e-commerce industry? Studies convey that businesses,
especially in the e-commerce sector are yet to be disrupted by a new wave of innovation. This
innovation promise to open up better ways of improving customer experience and reduction of

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the operation cost. The changes also promise to create more opportunities for new business
dimension, new market as well as new products. The innovation of machine learning and block-
chain technology are paving the way for a more cost effective business approaches that assure
improvement in customer experience (Baur, Bühler, Bick and Bonorden, 2015, pp. 63-80). This
hints that this is an area that is worth research. We therefore look to explore the disruptive
innovations that promise a better future in the e-commerce sector.
Methodology.
In order to achieve solution to the question above, we will do literature search in various
libraries/reference management applications. The proposed libraries include ACM library,
google scholar, EndNote and IEEE library. In the search process, we will key in various terms in
the library database. The proposed terms that would be searched in the database include “Current
Disruptive technological innovation”, “the disruptive technological innovation on e-commerce”,
“Future e-commerce” “blockchain technology”, and “Machine learning technology.” the
keywords will be limited to the publications ranging from 2010 to 2019. The returned results will
be filtered through inclusion and exclusion criteria so as to remain with the relevant sources
which are peer reviewed and coherent with the subject of study. The articles retrieved will be
read and reviewed and further filter the most relevant sources which will then be analyzed for the
study.
2. A report to a senior manager of UGO organization on migration plan to develop e-
business capability from scratch.
Introduction

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E-commerce have been adopted by many business in the current technology ubiquitous
environment. However, Ugo Inc. has been lagging in implementing the technology. This retail
has been one of the rapidly developing business in the United Kingdom since it got developed.
Ugo retail was developed in the year 2011 and already the business acquire twenty medium size
physical retail in the country (Soult, 2011, pp. 01). If the organization can dominate these regions
with physical retail, it can be inferred that migrating its operations online could lead to
paramount reputation in the entire country and even worldwide; the organization would have
been competing with the current reputable e-commerce stores like Alibaba, Amazon and E-bay
among other globally known e-commerce giants. This is due to the immense impacts which
results from migrating a business online.
Impacts of e-commerce on Ugo Organization.
E-business has a notable impacts on the productivity and cost of the business. The
technology has a chance to be widely adopted by many organizations because of the simple
applications that it promise to businesses. As such, e-business can offer great economic impacts
on the Ugo business. This technology can offer the business an opportunity to buy and sell
products and even share information through the internet as well as other online platforms
Ramanathan, R., Ramanathan, U. and Hsiao, 2012, pp.934-943).
The technological innovation in the 21st century can suggest that the economy in the today’s
world is truly global. The business can significantly reduce the unnecessary overheads,
investments, capitals and costs by outsourcing to another organization which specialize in a
given function. This give the business a lot more room for its operations and concentrate in
providing its consumers with a value products that lead to success of the business.

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With the increase in the use of the internet technology, business without online platforms will
find themselves being outweighed by smaller learner organizations and even startups
associations which are based on the e-business model and that will be the end of Ugo
Corporation if it still lag in adopting this fundamental innovation. This model will provide an
opportunity for e-business to grab a hold of a larger market share that is currently grabbed by
physical retails very quickly (Sila, 2013, pp.199-236). This is based on the fact that the
businesses does not consider inventories in many occasions and thus they don’t have to deal with
large overheads as physical retails.
The e-business can enable the organization to emphasize on the intangible more than the
tangible and bring them in the front line which ultimately changes the value into income. It will
also make communication between the organization and suppliers as well as its customers easy
and cheap thus enabling the intangible assets to get leveraged across a buyer base which is quite
larger compared to the physical retail (Ghobakhloo, Arias-Aranda and Benitez-Amado, 2011,
pp.1238-1269). As such, if Ugo could leverage all these benefits that have been brought about by
the internet. The organization could be full steam ahead in its business.
However, despite the immense positive impacts that e-commerce promise to businesses, just
like everything else, this technology is also accompanied by its drawbacks. One of the major
concern that have been associated with the e-business technology is concerning security and
privacy. Customers’ need an assurance that their personal information which they share in
organization’s online platforms remains confidential and not shred with any third party for
marketing reasons (Grandón, Nasco, and Mykytyn 2011, pp.292-298). Other customers, on the
other hand are trying to keep off technologies that monitor and record their personal data
including purchase of a product. There is also fear among customers that the websites they visit

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may not be offering the required security services and hence they may be penetrated by hackers
which might lead to loss of personal information.
Additionally, the e-commerce today is going with the pace of the technological innovations.
Many innovative technologies are now implemented by various organizations. The technologies
including machine learning and internet of things are currently adopted by many business
organizations (Choshin, and Ghaffari, 2017, pp.67-74). In order for the corporate to be among
the best in the competitive environment, the organization has to follow the trend. As such, there
will be need for installing various IT infrastructures for implementing the technology. For
instance, in order adopt e-commerce, the infrastructures for cloud computing, machine learning,
internet of things may be of high cost and the organization may not have a good financial base
due to the reason that it is just a startup business which started in the year 2011. As such, this
may be a considerable negative impact on the business.
The major benefits of the e-commerce with the suggestion of how to measure them
E-commerce promise overreaching benefits to organizations which implement it. One of the
most important benefit is overcoming the geographical limitation. As Ugo only have currently
have physical store at present, the organization is limited by the geographical area in which it
serves. Establishment of an e-commerce platform, the organization will have the whole world as
its playground (Ahmad, Abu Bakar, Faziharudean and Mohamad Zaki, 2015, pp.555-572).
Moreover, the mobile commerce (m-commerce) innovation has further dissolve all the remaining
geographical limitations. As such, if the business competitors adopt these strategies ahead of the
organization, the business may end up knocked out of the race by its competitors. This can be
measured by the number of internet users in the world today. The Internet World Stats as at
March 2019, reveals that out of over the seven billion world population, the internet users are

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over four billion which account for more than fifty percent of the world’s population. And most
interestingly, the growth rate is ambiguous; from this, it can be inferred that almost 90% of the
total world’s population will be using internet in the next ten to twenty years. This is enough to
show the direction where people are headed. It can therefore be seen that through e-commerce,
many organizations are going to conquer the geographical limitations as have been demonstrated
by a few organizations like Amazon and Alibaba among other giant e-commerce who are almost
dominating the world.
Another noteworthy benefit of the e-commerce is gaining the new customers through the
utilization of the search engine visibilities. The Ugo physical retail is only driven by
relationships and branding within the UK. E-commerce, on the other hand combine both of the
two plus the traffic which originate from search engine. Moreover, there are innovations which
facilitate the searching process including artificial intelligence and machine learning. The e-
commerce can utilize these innovations to provide automations which ultimately reduce the
human task. The innovations like chatbots can help in handling some tasks that would be
otherwise done by human beings thus reducing the cost. Additionally, the application of artificial
intelligence and machine learning can enable the business to predict the future which has a
considerable contribution towards the business success (Sun, 2010, pp.07; Hannak, Soeller,
Lazer, Mislove and Wilson, 2014, pp. 305-318). These additional opportunities can be a tipping
point for an e-commerce business. This benefit can be measured by the lead generation and
conversion rates by the online businesses. Organizations like Alibaba which operates online have
a profound lead generation due to their online presence and the use of the above mentioned
strategies for attracting more customers.

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Most importantly, the lower cost is one of the most tangible benefits of the e-commerce. E-
business can take advantage of the lower cost to offer a great deal of discounted prices to their
customers. This is a very big threat to Ugo business as it may not be able to provide its customers
with such discounts since it is mainly based on physical operations which incur expenses. Many
customers will always prefer the online platforms where they get discount compared to the
physical retails (Hernández, Jiménez and Martín, 2010, pp.964-971). The online business can
only spend some money on the advertising and marketing where they may spend on pay per click
traffics as well as social media traffic which are still cost effective. However, as far as human
resource is concerned, the checkout, billing and payments as well as inventories among other
operational processes are automated, this lowers the population of the e-business employees that
are required in order to run an e-business setup thus save on costs (Tsai, Lee, Shen, and Lin,
2012, pp.36-46). The matters concerning real estates, on the other hand are no barrier due to the
reason that the e-commerce business does not require any physical location to operate. This
contributes an immense savings more than the physical storage. The performance of this benefit,
on the other hand can be measured by the total amount of investment. Where it can be seen that
e-business will have a considerably low investment cost compared to the physical retail.
The major risk involved in e-business and their mitigation strategies
Besides the promising benefits of the e-commerce, the business is associated with various
risks. One of the major risks that is common with the e-commerce is concerning bad guys. The
bad guys may be hackers who may want to penetrate the system to access the customers’
personal information for selfish benefits, they may also include frauds and virus among others.
These types of risks can be mitigated by first of all installing technological solutions to security
risks (Antoniou and Batten, 2011, pp.421). The business can also offer training and awareness to

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its IT security management department in order be aware of risks. Along with this, if the e-
commerce utilize the cloud storage, it is essential to select the vendor with the best security
management features in order to prevent the occurrence of such security risks (Featherman,
Miyazaki and Sprott, 2010, pp.219-229).
However, it may sound somewhat negative, individuals including the organization’s
employees are security threats. Human beings are the weakest link in system security in any
business, however, this may cost the organization considerably if it is not taken to note.
According to Boulton (2017) it is noted by many experts that negligence by employees to
execute their duties including ensuring system security is the biggest risk in information security
in many organizations. There are also chances that the employees may get overwhelmed by a
difficult task of ensuring system security (Zheng, Favier, Huang and Coat, 2012, pp.255; Yen,
2015, pp.145-160). We are all human beings and human beings are prone to making mistakes,
however, these simple mistakes may be exploited by a plethora of some individuals which may
consequently lead to a great financial loss in a business. Such risks can, however be mitigated
through reinforcement of training and awareness to employees. Technical solutions can also be
implemented, however, it does not promise realization of the full expenditure made on the
technical solution. As such, coupling it with the training and awareness would be the most
preferable to ensure a robust security for an e-business.
Conclusion
In conclusion, it can be noted that the impacts of the e-business are far reaching. E-business
promise a considerable impacts. Through e-business, an organization can be able to buy and sell
goods as well as share information at a considerably low cost, thus leading to reduction in the
investment costs. Additionally, the e-business can enable the organization to emphasize on the

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intangible more than the tangible and bring them in the front line thus consequently changing the
value into income. Among these impacts, we could also identify some negative impacts
including security problems. However, security is a major issue in every organization including
the physical retail. Besides, there are various ways through which these security issues can be
mitigated. With these fundamental impacts, it is noteworthy that e-business is an essential facet
that Ugo should not overlook. Along with the impacts, we can also identify some benefits e-
commerce promise to business including overcoming the limited geographical location; we find
that with e-commerce, business can operate anywhere under the sun. Another critical benefit is
the utilization of the search engine visibilities and technologies including machine learning and
artificial intelligence; it is revealed that this aspect is sound in business success. Most
importantly, e-business is more cost effective thus help in saving. Overall. It can be concluded
that e-business should be the way to go for business which seek success like Ugo Inc.

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Reference list
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enterprises in a developing country: Evidence from Malaysia. Information Technology for
Development, 21(4), pp.555-572.
Antoniou, G. and Batten, L., 2011. E-commerce: protecting purchaser privacy to enforce
trust. Electronic commerce research, 11(4), p.421.
Baur, A.W., Bühler, J., Bick, M. and Bonorden, C.S., 2015, October. Cryptocurrencies as a
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Featherman, M.S., Miyazaki, A.D. and Sprott, D.E., 2010. Reducing online privacy risk to
facilitate e-service adoption: the influence of perceived ease of use and corporate
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