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© Jonathan Reynolds, 2005
E-business:Strategy, skills and careers issues
Dr Jonathan ReynoldsOxford Institute of Retail Management
Saïd Business School & Templeton College
University of Oxford
© Jonathan Reynolds, 2005
Outline
• What do we mean by ‘e-business’ skills?
• Trends in in demand and supply• Understanding eBusiness skills
needs: the example of the retail sector
© Jonathan Reynolds, 2005
The rationale• ICT as a major driver of
economic growth– Development of new
products and services– Productivity improvement in
existing tasks and processes• Concerns about ‘e-skills’ an
important element of policy at all levels of government
• Supply of “properly qualified” people seen as lagging behind demand
• One perceived contributor to the extent of outsourcing/offshoring being undertaken
© Jonathan Reynolds, 2005
A definitional reminder• E-skills often interpreted as
“ICT skills” - incorrect• ICT skills
– Basic/advanced/professional (OECD)
– User/practitioner (e-Skills Forum)
• eBusiness skills– Strategic in nature– ‘skills needed to exploit
business opportunities provided by ICTs’
– Contribute to development of new products & services and business efficiency improvements
• Our interests focus on ICT professional & eBusiness
Sources: RAND Europe; e-Skills UK, 2005
© Jonathan Reynolds, 2005
But just what are eBusiness skills?• “Few attempts to
qualify/quantify specific set of skills” (RAND Europe)
• Agreed that need to go beyond pure technical matters
• Business, creative and technical skills partially learnt in:
– “Business studies, commerce, multimedia, multimedia, information systems, fine art, librarianship, journalism, film studies, photography ….” (Irish Expert Group, 2000)
– Useful?• Those skills needed by
– “Internet business strategists– Internet-dependent
professionals” (IDC/EITO, 2001)
© Jonathan Reynolds, 2005
Shortage, gap or mismatch?• Shortage (recruitment need)
– Not enough people to perform ICT/eBusiness jobs
• Gap (retraining need)– Competence shortfall amongst
ICT professionals • Mismatch (curriculum need)
– Difference between observed and expected ICT professional competences
• A dynamic workforce– New developments require new
skills– Periodic curricular updates
required to remedy mismatches
– CPD needed to mitigate skill gaps
Sources: European e-skills Forum, 2004
© Jonathan Reynolds, 2005
Origins & destinations of IT graduates
• Overestimation of skills needs in 2000 (Internet bubble/millennium)
• Graduate entry into the IT workforce fell by 36% between 2000 and 2002
• The slowdown affected Computer Science less than other subjects
• But the recruitment of graduates into professional roles is still higher for non CS subjects than for CS
• Also gender issues• How does this hold for e-business
occupations?• More recent evidence?
Source: e-Skills UK, 2005
© Jonathan Reynolds, 2005
Supply: UK and Europe• ICT skills and skills gaps have
ample attention in the UK (RAND Europe, 2005)
• Nordics and UK have highest proportion of professional e-skilled employment
• European curricular concerns (CEDEFOP, 2004)
– Lack of common definition of skills and skill levels relevant for employment
– Lack of qualification definitions/levels relevant to ICT
– Few common approaches to skill & training standards and assessment/certification
– No way to validate training
Computer professionals as % of employees
© Jonathan Reynolds, 2005
Demand: UK• 65,000 vacancies amongst
41,000 establishments• 34% of establishments
(15,000) finding these vacancies hard to fill
• 9% business units in the UK reported skills gaps (ie retraining need)
• Focussed on development/implementation skills
• This constitutes only 3% of all ICT professionals employed
© Jonathan Reynolds, 2005
The example of the media sector• “During the first Internet boom,
there weren't enough talented, skilled people because it was such a new industry, but then the reality was that clients knew nothing anyway. You could put someone with one or two years' experience in front of them; interactive was easy to blag.” (Tribal DDB)
• "Clients now have six, seven or eight years' experience in interactive media, so if you put a junior person in front of them, then the skills gap becomes clear very quickly.” (Tribal DDB)
• Chronic shortage of skilled people
• Hiring outside digital arena
© Jonathan Reynolds, 2005
The example of the retail sector• 1980 – Tesco’s Shopping &
Information Service, Gateshead• 1987-8 – Teleshopping Consortium• 1995-05 - Oxford Retail Futures
Group• 2000 – Marketspace technology
monitoring• 2002 – Retail technology scenario
planning• 2004 – Retail IT project
management research• 2004 – IT and retail productivity
research• 2005 – Retail technology
roadmaps
© Jonathan Reynolds, 2005
Retail attitudes towards ICT in the 1990s
• “Retailers are conservative• Are adapters rather than innovators• Use ICT to support existing
operations• As a result it confers little
competitive advantage• But can raise rudimentary barriers to
entry”
Source: CEC/IRS, 1992
© Jonathan Reynolds, 2005
Retail attitudes towards ICT in the 1990s
• “Successful” retail ICT for many– doesn’t involve long term R&D– provides visible financial benefit– no extensive capital commitments– low risk, staged implementation
• Exceptions for a few– Use IT to deal with large, strategic issues– Use IT to seek integration– Undertake their own R&D– Use IT to enable a new strategic mission
• Who were the few?
Source: CEC/IRS, 1992
© Jonathan Reynolds, 2005
Lack of innovation?
Source: DTI, eBusiness W@tch, 2005
Food retailingGeneral retailing
Retail
-1,5
-0,5
0,5
1,5A
B
C
D
Max Average Retail
European E-Business Scoreboard 2004. Index for the e-business intensity in four categories:A = Connectivity of the enterprise. B = ICT use for internal business process automation. C= E-procurement and supply chain integration. D = E-marketing and sales.
© Jonathan Reynolds, 2005
Major achievements
• “For all the technologies we’ve seen developing over the past 25 years, the two that were really embraced by retailers were the introduction of the barcode and point-of-sale terminals” (Retail Week, 2005)
• So where do we go from here?
© Jonathan Reynolds, 2005
Why?
• Risk averse retailers? – Scale, cost and
complexity of transformational technology projects
– Organisation of IT investment
– Project management problems
– Lack of training• Customer need?
– Lack of products delivering genuine and measurable customer benefits
© Jonathan Reynolds, 2005
(1) Scale and complexity of transformational ICT projects
• “Aging technology investment and aging stores are the primary limitations to productivity” (US retailer)
• “We celebrated our 30-year anniversary this year, and so did our systems. It means that the system is capacity-constrained, things that you do are not particularly sexy, and also you cannot do many things you want to do. ” (UK non-food retailer)
• “At any one time we may be actively considering between 75-150 technology-related projects across the business” (UK mixed goods retailer)
Source: OXIRM, 2004
© Jonathan Reynolds, 2005
(2) Organisation of ICT investment
“The companies I looked at in the UK tended to have the in-house IT departments because it was seen as being a key competitive advantage. In the US, the systems companies tend to develop retail company systems more generally which then every retailer took up.
It would appear that internal IT capacity was not seen by US retailers as the key competitive advantage – hence everyone became efficient at the same rate. In the UK, on the contrary, retailers had to replace their systems at different speeds and thus have different systems capabilities and they retain in-house IT systems – which may be extremely costly.” (US non-food retailer)
© Jonathan Reynolds, 2005
(3) Project management
© Jonathan Reynolds, 2005
How are UK retail projects doing?
ALLPROJECTS
Schedule Budget Spec
ON/AHEAD 48%
BEHIND 46%
ABANDONED 6%
ON/BELOW 42%
ABOVE 6%
ON/ABOVE 23%
BELOW 19%
ON/BELOW 23%
ABOVE 23%
ALLPROJECTS
Schedule Budget Spec
ON/AHEAD 48%
BEHIND 46%
ABANDONED 6%
ON/BELOW 42%
ABOVE 6%
ON/ABOVE 23%
BELOW 19%
ON/BELOW 23%
ABOVE 23%
Source: OXIRM, Computer Weekly, 2004
© Jonathan Reynolds, 2005
(4) Training in the retail sector• Only 34% of those working in
retail are qualified at Level 3 or above (compared with 52% of the whole economy).
• At management level, 13% are without any qualifications at all (75,000), while only 22% are at Level 4 and above (compared with 39% of the whole economy)
• Key skill needs:– Customer services– Management and leadership– Information technology
© Jonathan Reynolds, 2005
(5) Lack of products delivering genuine and measureable customer
benefits• There’s a lot of it out there
– 22,000 screens being used for promotional purposes by UK retailers (POPAI)
– “we’re still writing the book on this. Most (retailers) still have more questions than answers.”
• There is a continuing need to– “sell the benefits, not the
product, to create more interesting interiors and captivate shoppers’ attention.” (review of Multi-channel trade show)
• To what extent do we still see ‘solutions in search of problems’? E.g. 3G
© Jonathan Reynolds, 2005
(5) Lack of products delivering genuine and measureable customer
benefits• “How come not much of the wizardry in non-customer facing technology has made its appearance in front of customers? As usual, we have been short-changed with a lacklustre series of electronic knick-knacks” (Bernard Dooling, 20/20)
• What does the customer want?– E.g. Self checkout
• “Today, I confront 40,000+ items in my grocery store -- and I get nowhere near Amazon.com-like levels of help when I walk in the door. The first retailer, producer, or marketer who figures out how to do this cost effectively has me, and my self-directed, price-insensitive, high-margin brothers and sisters, for life.” (Andrew Zolli, Foresight Strategist, FMI Washington, 2005)
© Jonathan Reynolds, 2005
“The Few”: Tesco.com• First trialled in 1996• £577mn+ 2003/4 turnover
(+29%); (£401mn H10506)• 65% online market share• £28mn profit (£21mn
H10506)• 270 outlets• 96% population• 170,000 orders per week• Average customer spend
+7% over past three years• Range extension• Multichannel data insights
© Jonathan Reynolds, 2005
“The Few”: Argos• Leading UK general
merchandise catalogue store retailer
• Low cost/value positioning• 2004 £3.3bn sales (+12%);
£297mn profit (+23%)• 561 stores, multi-channel• 13,000 products in main
catalogue (17k Argos Extra)• 2/3 households collect
catalogues from stores• 34 mn catalogues produced per
year (2 issues)• Argos Direct 20% sales
(including 2.6mn telephone orders)
© Jonathan Reynolds, 2005
High level of system & process integration
• Early adopter of ICT• Website launched 1995• SMS service launched 2002• Argos Direct home shopping
infrastructure• UPS Supply Chain Management
solution consolidates deliveries• 15,000 full vehicle loads (comp
up to 55,000 part loads)• Delivers to 1 in 7 UK homes• Gains from supply chain
initiatives re-invested in lower prices, which are down 5 per cent on last year.
Click and CollectReserve items at your local store online!
Shop online at argos.co.uk and you can either:
- Order for home delivery, and pay online.
- Reserve items* at your local store, and pay in store when you pick up your order.
Text and take home
Vodafone Live!A new way to browse our catalogue on the move
© Jonathan Reynolds, 2005
What does the future hold?CIES CIO IT Priorities, May 2005
1. Improving Business Processes
2. Gaining Competitive Advantage
3. Demonstrating Value of ICT Projects which help Drive Business Growth
4. Cost Control 5. Faster Innovation
© Jonathan Reynolds, 2005
Management & Information Systems• Data fusion
– Extracting meaningful data from multi-sensor acquisition
– Data standardisation, especially at the product level
• Data mining– Information management– Reward and loyalty
schemes– Customer profiling and
scoring– Personalisation– Intelligent agency
© Jonathan Reynolds, 2005
Imaging
• Imaging Intelligent CCTV– Self-learning systems– Theft prevention– Customer/employee
monitoring and tracking– Trajectory analysis
• Brain Science– Improving awareness of
social behaviours– Brain scanning,
neuroeconomics and neuromarketing
– Beware the ‘cognitive paparazzi’
© Jonathan Reynolds, 2005
Design simulation and modelling
• Store design & layout– Immersive visualisation
and 3D design applications
– Customer flow modelling
– Realtime walkthroughs– Layout optimisation– Promotional placement
• Energy efficiency– Store environment
simulation
© Jonathan Reynolds, 2005
Security: e.g. biometrics
• Incremental– Employee access control to
stores, time and attendance at work
– Management of customer records, control of fraud
• Significant– Voice recognition, bank
transaction authorisation, electronic point of sale, secure operation of ATMs
– Sustainable, differentiating market offerings e.g. Fully Automated Seamless Shopping/Travel
Source: Heracleous & Wirtz , 2005
© Jonathan Reynolds, 2005
RFID
• Impartial advisory role• Standards development• Costs vs payback modelling• Innovation by suppliers to
match industry needs– E.g. Digital receipt
technology– E.g. Locational positioning
logistics• Dissemination of best
practice for both large and SME retailers
• RFID and the consumer
© Jonathan Reynolds, 2005
Pervasive computing
• “The creation of environments saturated with computing and wireless communication, yet gracefully integrated with human users”– wearable and handheld
computers, – high bandwidth wireless
communication – location sensing mechanisms
• Swiss Army Knife vs Wallet approach
• Social & economic drivers of ubiquitous computing
© Jonathan Reynolds, 2005
of
RESEARCH
EDUCATION PR
ACTICE
Training
Consultancy
Scholarship
Source: Christine Cuthbertson, 2003
How do we decide upon need?
© Jonathan Reynolds, 2005
Conclusions
• What do we mean by e-Business skills?
• How do we tackle gender inequalities and ‘shortages, gaps and mismatches’?
• What are the evolving needs of existing practitioners?
• Don’t forget entrepreneurship
• Sector-specific insights and futures