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Digital Entrepreneurship in Malaysia


DigitalEntrepreneurship in Malaysia

Digitalprocesses in e-commerce are intricate and complex in Malaysia as it is anywhere in the world. A simple transition may involve tradingpartners spread all over the world. These complex processes maytrigger action in other business processes. These complex processesand interdependencies of business are often handled in businesssystems that knit different companies together as long as theyembrace an electronic environment of carrying out transactions.Digital commerce appreciates a business cycle that incorporateselectronic transactions in all facets. The application of digitalsolutions in e-commerce occurs in core processes that constitute theentire production cycle. There are various processes that can beaffected through digital applications in business. They includemanaging multi-channel businesses such as B2B, B2C, and B2Ebusinesses where the business uses digital technology to effect allbusiness all business transactions, digital marketing, formingcollaborations with other market players, mobility of business,communication and enhancing customer experience through businessproducts.

Multi-channelingand digital business

Applicationof digital business for B2B, B2C, and B2E businesses

Businessesadopt digital solutions to reduce the costs of doing business. B2Bbusinesses have a smaller market that B2C and B2E businesses. Digitalapplications do not differ too much apart from the target audience.It is, however, expected that B2C businesses are more aggressivebecause they deal with final consumers in the market. Digitalsolutions involve processes such as internet marketing, data storageand processing software, branding and information communicationstechnology. For example, online advertising is an example of digitalsolution that replaces complements and later replaces traditionaladvertising methods. B2B businesses are continuously fining it easierto foster their brands through digital solutions. Some of the onlineadvertising modes are banner ads, paid search advertising, andcookie-based.


Digitalmarketing has emerged through e-marketing techniques. In e-marketing,all the traditional marketing principles are followed but throughelectronic media. Specifically, the internet is a platform forexecuting digital marketing (Pride, Hughes &amp Kapoor 2005, p.40).It involves direct response and indirect response marketing featuresthat apply different technological applications to connect a businessto another and to its customers. It has been enhanced by thedevelopments in information communications, technology throughinnovations in personal computers, smart phones, Ipads, and manyother gadgets that have improved access to the internet. Digitalmarketing techniques have high returns on investments thantraditional marketing methods. It enables businesses to reachmillions of people in a short span of time. It redefines theinteraction of business entities and customers.


Digitalcommunications networks have access points that enable businessprocesses to be moved. Each business access point has a particulararea of reach that a device must enter to connect to the network inthe area of coverage. Digital commerce has transformed marketmobility form physical movement of merchandise to movement ofproducts and services through access points in particular coveragearea. Mobility reduces the cost constraints associated withtraditional commerce. Digital mobility is facilitated by multipledistinct communication networks with varied access point densities.


Digitalsolutions in business facilitate collaboration of business brands tobuild successful brands. This is done through technology leveragingand innovations. Different devices and software have developed, andthe mobility of these technologies has facilitated real timecommunication between business entities. Collaboration is donethrough processes such as video conferencing, telepresence,messaging, telephony, mobility, and document sharing among firms.Collaboration creates business models that connect people to work atany place through technological devices that have made communicationeasy. For this reason, business enterprises are redesigning theirmodels that facilitate tools of collaboration and software in moreeffective ways that make it possible for them to share businessprocesses for mutual benefits.


Digitalcommunication applies information communications technology inaccessing, collecting and dissemination of information. Theresponsibilities of business managers and should be appropriate toachieve the benefits of ICT in business. Today, enterprises have toplan the ICT infrastructure for the maximum anticipated load and theincremental increases and reductions in capacity. Others areoutsourcing ICT services from more experienced and large providers.This is due to the cost of acquiring and adopting ICT models ishigher than buying the services from specialized firms. The cost ofadopting and installing ICT infrastructure from an external provideris added to another non-ICT cost of the product.

Impactand implications of current and emerging developments in ICT on:


Theimpact of ICT in business communications is tremendous. The impactresults in implications that affect both management and processes inbusiness because the firm has to make the necessary internaladjustments. End-user organizations will incorporate ICT intostrategic management of businesses. A change in the qualification ofmanagers has drastically occurred to include ICT literate persons.Managers are now required to apply ICT in developing new products andacquiring new customers (Montana Office of Tourism Awards E-MarketingGrants to Eight Tourism Organizations 2014 February 13, p 11). Thosemanagers who understand these processes will have increasingly becomethe indispensable members of the top management team of mostorganizations. Employees too have had to demonstrate theirunderstanding of ICT on various business processes. They have tooffer new ways of providing new solutions in business through ICT.Employees directly involved in ICT processes, in organizations, havegone down because of the increasing need to outsource. Everydepartment has to employ an employee whom to deal with ICTchallenges. Integrative and innovative roles of ICT have grown inorganizations especially in ICT driven industries. ICT processes arenot like the general support processes such as accounting andpurchasing they have immediate effects on core business processes.


Digitalcommerce has resulted in improved collaboration across the entiresupply chain of organizations with a positive impact on a variety ofbusiness processes in the same supply chain. Costs reduce, and theprofitability of the organization goes up when it adopts digitalmeans of completing business transactions (Barratt &amp Davis 2009,p.130). Cross-enterprise collaboration has implications in thefollowing product and business process applications.

Productdesign: Collaboration facilitates the integration o suppliers into anew product design process that significantly reduces the length of aproduct`s design cycle. It increases the quality of a new productwhile reducing the manufacturing cost of the product. It has enabledcollaborating business to meet customer preferences.

Forecast:Sharing forecast information and other supportive data betweenbusiness partners help in building a more accurate forecast of thebusiness environment. Digital processes have made this a lot easierthan before (Colby 2004, p.6). Information from both collaboratingparties will facilitate comparisons and reconciliations to get a morerealistic forecast of the environment. For example, retailer who hasa better understanding of consumer trends shares the information withmanufacturers before any planned sales promotion is initiated. Themanufacturer, on the other hand, shares information about the productabout aggregate demand obtained from other retailers to acollaborating retailer hence enabling them to detect changes inconsumption patterns. The internet has facilitated thesecollaborative processes to happen in good time between businesspartners through emails, teleconferencing, and telepresence(Desharnais &amp Radhakrishnan 2002, p.280). Reactions are,therefore, real time hence reducing the cost of arbitrage.

Production:Collaboration provides a linkage between manufacturers and theirsupply chain partners. Digital processes have widened the scope ofmaking production processes more efficient and more profitable. Inshort period partners can provide feedback on the errors they noticeon products and manufacturers correct immediately. Losses resultingfrom production inefficiencies have drastically reduced. Digitalbusiness avails timely information to manufacturers and theirpartners across the supply chain. Resources are managed moreefficiently to avoid the accumulation of idle resources. Firms inthis digital age have designed collaborative management systems thathave made businesses enterprises more related and linked than everbefore.

Procurement:Enterprises can effectively and on a timely basis share sales,inventory information, demand forecast, and procurement scheduleswith their suppliers (Chaffey 2009, p.67). Suppliers have increasedtheir ability to plan for operations better to meet future demand.Manufacturers also get their materials in good time. Managers ofdigitally-compliant organization benefit more on collaborations thanthose who have less digital investments. Information sharing onprocurement issues should be real time so that effective measures canbe put in place before any damage is done.

Performancemanagement: Problems in interface activities between collaboratingorganizations has become a significant part of every business.Collaboration has prompted organizations to look beyond theirinternal performance measurement systems to identify interfaceactivities. Interface activities are those activities that are cutacross multiple companies. Interface activities may not be visible inorganizations internal performance measurement systems henceconcealing vital information that may be needed in strategicmanagement.

Impactand implications of digital trends in marketing

Socialmedia has gradually taking over as the main e-marketing tool inbusiness. Even mainstream marketing tools such as television andprint media have made their interactions with the public morepersonalized in the dynamic digital environment. FaceBook pages,twitter accounts and email accounts are advertising sites (Martin2000 April 1, p.8). This is happening due to three key reasons: Theneed to transmit information faster to the target population, theneed to reach a wide geographical area, and the need to participatein data analysis about the effectiveness of marketing tools.

Digitalmarketing has had a great impact on the role of social media inadvertising. Marketing is becoming personalized where people can getinformation about different products through social mediainteractions with firms. Some organizations are engaging in directmail advertising where they send information about product featuredirectly to prospective customers or simply feature them on thesearch engines such as Google ad yahoo. Firms are required tocustomize their digital technologies. Firms are increasinglydifferentiating their customers based on the online channels they useto visit the firm`s website while considering their online browsingbehaviour (Rajput 2000, p.89). Some customers use smart phones, otheruse PCs, MacBooks, and tablets. Organizations collected data aboutconsumer`s browsing behaviour and use the predictive analytics tounderstand customer preferences. Once they ascertain that theycustomize their services and products in such a manner that isdesirable for their customers. Technology based on predictiveanalytics helps organization to design offers such as discounts forfirst time users of the product.

Organizationaland managerial implications of competing in a global networkedeconomy

Rapiddevelopment of information technology is capable of providing withthe tools to manage their affairs efficiently and compete on thenational stage. Organizations are linked through a network ofbusiness processes that affects all cross-border investors Al-Ani2009, p.46). Firms should be involved in designing a globalinformation system that can enable firms to gather, manipulate anduse information to make decisions that can improve their competencein the global economy (Hsieh &amp Tseng 2004, p.163). Organizationshave a huge challenge of globalizing their operations. They can dothis by first identifying critical issues on information technology,consolidating them, and resolving them to support the organizationtowards globalization (Cohan 2000, p.5)). The implication now is todevelop a framework that can help the organization meet challengesthat come with globalization. A globally networked economy needsseveral adjustments by the organization:

Identifyand acquire global information Technology infrastructure

Theseare the system hardware needed to connect the organization to therest of the world. These are equipment and facilities that supportglobal information systems. An organization operating in the digitalage where organizations and people are widely interconnected througha network of information systems needs to elevate its long terminvestments to acquire these global infrastructures (Gupta 2006,p.81). Global IT infrastructure is classified into four categoriesthat any globally competing firm must adopt:

Computerhardware- Organizations that want to compete globally in this digitalage must acquire this basic computer hardware. Computer hardwareincludes workstations with desktop computers, mainframes, servers,digital cameras, printers, and scanners.

Networkfacilities- network facilities includes materials such as gateways,modems, cabels, routers, hubs, bridges, converters, adaptors,concentrators, repeaters, switches, transceivers, and multiplexers.

Backup equipment- these are storage facilities such as tapes, discs, anduninterrupted power supply (UPS) devices.

MobileEquipment- These are notebooks, computers, personal digitalassistants, mobile phones, and wireless facilities.

Identifyand adopt global business applications

Theseare the systems software needed to connect the business to the restof the world. Global business applications are the instruments thatfacilitate business operations. They are business functional andsoftware applications in the global business environment. Themanagement of organizations has to ensure that management andutilization of these applications is applied in the construction andoperation of global information systems. The organization has tocarry out system integration, maintain software applicationavailability, and apply the standards to manage and implement globalinformation systems.

Identifythe global telecommunications network

Itrefers to digital communication networks that will make it possiblefor an organization to collect data and use it to make criticaldecisions (E Commerce 2000, p.45).

Improvingthe information systems to be more secure

Thisdeal with data and information of a global nature in terms ofsecurity. As more information gets into a globally connected networkand organization through cyberspace, the organization has to face anincreased number of security threats (Glover, Liddle &amp Prawitt2001, p.56). This means that management has to come up with asecurity strategy especially in the transition process. A securitystrategy has important elements that the management should notoverlook. The elements are connection with the organization`ssecurity, business strategy, and authentication, privacy policy,authorization, recovery,administration

Connectionwith business strategy- the organization must come up with afiltering strategy that ensures that all the communication passesthrough its structures and business model. Organizations with aglobal organization structure should have a security plan thatincorporates all foreign business units and subsidiaries.

Aprivacy policy- security and privacy policies must be codified,communicated and updated on a regular basis. The policy should bespecific without ambiguities. Important items that may be included inthe organization`s security are data access, application access,network access, software access, software, privacy, businessresumption planning, systems design and development, and riskassessment (Mauro 2000, p.40).

Authentication- password systems should be used in a globally networked system.They should be efficiently developed and controlled to ensure thatapplications or systems owned by the organizations from being easilyaccessed by unauthorized persons (HYE 2009 December 27, p.12).Firewall is an important aspect any globally connected organizationshould consider when planning an authentication strategy for itsinformation systems.

Authorization-after users has been authenticated to access the information systemthey need to be monitored according to a predetermined authorizationpolicy. Access to networks, applications, and databases need to beprescribed (Laudon &amp Traver 2002, p.112). User should be aware ofthe steps to take once they get into each site of the informationsystem.

Administration-This is the management of all security and privacy policies. Themanagement needs to ensure that the methods, tools, techniques, andprocesses follow the administrative procedures of the organization.

Theneed to install systems standards

Organizationsin a globally interconnected business environment must initiatesystems standards at three levels: at the project level,organizational level, and the industrial level.

Projectlevels standards- It mainly deals with the analysis, design, anddevelopment the new global information systems (Boone &amp Kurtz2011, p.51). In the design and analysis stage, business functionsare presented in models. The models should be standardized to provideconvenient communication between development teams, users, andmanagers. The modeling technique should be unique and accepted bymost developers, businesses, and industrial users. For instance, theUML (Uniform Modeling Language) is an example of a modeling techniquethat meets the requirement of a globally networked businessenvironment.

Organizationallevel- At this level the organization should align its standardsystems to reflect the needs of global information systems.

Industriallevel- The organization has to develop a standard system that allowsfor industry adjustments.

Theimpact of the networked economy and e-business on an organization

Organizationsthat operating in a globally connected e-business transform theirinternational operations to be toward a flatter and more adaptivestructures. In this case, they establish a market-oriented structurethat is keen on global business dynamics (Burr 2002, p.67). Theseorganizations do so by interpreting data obtained from the globalspecifically in their industry of operation. Instead of thehierarchical systems of the traditional organizations, e-commerceorganizations require more coordination, and the coordination is donein the same way goods are allocated in the market place, throughdecentralized pricing and exchanges. Business units are, therefore,assembled on a supply by market forces (e-commerce crystalball.com2000, p.23). Implementing the e-commerce to the letter reducestransaction costs reducing the boundaries between internal businessoperations and market orientations. E-commerce through web technologyhas a major impact on the coordination aspects of an organizationwhere information, knowledge and decision processes are shared on atimely basis between partners in the supply chain (Walter 2008 May11, p.20). Electronic networks make this process to be successfullycoordinated through rapid configuring and reconfiguring of networksto meet the market demand on the global scene.

Theweb-based supply chain models provide an opportunity to theorganization to work with other organizations in establishing avirtual enterprise (Shaw 2003, p.88). Virtual enterprise worktogether on marketing, quality assurance, product development,customer service, and building an entire supply web that serves allthe affiliated organizations.

E-commercealways brings the need for an organization to adjust internalsystems. It has to integrate systems applications form customerrelationship management to supply chain management (Adam &amp Yesha2006, p.880). This is required to integrate business processes acrossthe supply chain to complete supply chain processes in real time.Processes such as order fulfillment and product development can onlyfit in the new e-commerce if the organization integrates its systems.E-commerce enables organizations to actively get interact with theircustomers on one hand while being ware of the status of the supplychain on the other hand (Altinkemer &amp Yilmaz 2008, p.130). Thegreater the integration and the customization process the faster thepace f value addition on the supply chain.

Illustrationof a business model

Oneof the models commonly involved in digital commerce is the Low-costBusiness model. The objective of adopting a low-cost business modelis to drive many customers at a low cost (Barratt &amp Davis 2009,p.260). Revenue is hence earned through other auxiliary services suchas charges on bank cards, advertisements on stickers attached toseats, running a lottery, flight insurance services, selling traveltickets, extorting charges from those with excess luggage. The modelconfigures business`s processes that drive costs to their minimum. Anexample of organizations with low cost business models is those whodeal with buying oil futures.

Evaluatinga business model

Thereare five aspects that every business model musts posses for it to beeffective: The revenue model, the gross margin model. The operatingmodel, working capital model, and the financing model.


Themodel involves laying down strategies that will maximize revenue.Product promotion techniques must utilize e-commerce toolseffectively (E-marketing masterclass by TV dragon 2008, p.67). Lowcost business models have high revenue models because they seek tokeep costs as low as possible. An organization`s business model musthave propositions about the value of the products, its positioning interms of marketability, effective message conveyance and market toproduct fit. If a business does not a clear revenue model as well asarticulate it to its prospective customers, it may not maximize ondigital marketing.


Lowpricing models keep low gross margins. They, therefore, do noallocate a high mark-up and keep the same pricing strategy. A firmmust have its own gross margin model that will determine its pricingstrategy. Low cost models such organizations dealing in oil futures


Operating models are unique for each business. Some cut on costswhile others focusing on reducing revenues. All decisions in businessare based on the unique business model the business has.

Workingcapital model

Businessesthat run huge stocks of inventory have a high working capital. Thismeans that they must have much money in cash from to fill up theirstores with inventory. Every business has to bear in mind its workingcapital model.


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