Project Proposal
The past few decades have revolutionized the way businesses operate and the strategic methods adopted by managers to accommodate changes and adjust to the dynamic business environment. Globalization has resulted in a new era of development supported by advancing technology and innovation in the field of information exchange. Entrepreneurs are redefining their business strategies and adopting market expansion practices through the Internet. E-commerce has made a deep impact on the way organizations are reaching out to their customers.
The purpose of this paper is to highlight the ways in which technology and innovation has influenced business practices and what steps are being taken by the managers to gain a competitive advantage in the market. For this purpose we have selected a cosmetic surgery clinic that provides body shaping services to its niche clients in California. The Marina Plastic Surgery clinic is run by an entrepreneur who has extensive experience in the field of customer service and sales. Patients can consult well known cosmetic surgeons and practitioners visit the clinic on prior appointment. The appointments are fixed over the phone by the customer service representatives. The clinic currently has 3 reputed surgeons attending the patients. The clinic has all facilities that include consultation rooms, operation theatre, recovery rooms and a well trained team of nurses to assist the doctors.
Last year the clinic decided to have its own website that will provide the customers with online booking facility, online assistance for potential customer queries on the process, cost, and risks associated with the surgery. The online customer relationship management application system doubled the booking figures and the clinic had huge number of queries coming in on a daily basis. The paper identifies the challenges and strategic issues faced by the clinic while implementing the changes in the organization, how it affected various departments and what steps can be taken to resolve these problems. The paper also provides an in-depth understanding of the business advantage that can be achieved through the use of such technology and innovation.
Methodology
The paper uses secondary sources of information to accumulate facts and theories that affect the business environment and organizational performance. For the purpose of this paper academic sources have been used to gain an insight into the impact of technology and innovation on management practices. Online journals and articles are also used for the analyzing the role of new technology on the company performance, market competition, and business growth.
Learning Outcomes
A study of the impact of technology on the business performance of the Marina Plastic Surgery clinic will provide a deeper understanding of the way organizations think and decide on implementing a new technology. The cost benefit analysis and speculated customer advantage are the primary objectives behind such efforts. The paper will also specify the strategic methods adopted by managers to implement changes, the business advantage of applying such technology, and the impact of technology on operational procedures and functions. Among other areas of learning, the paper also highlights the employee behavior and response to these changes at the initial stages and the steps that management can take to resolve such situations. Overall the paper reflects the process of building an innovative enterprise that is aimed towards gaining competitive advantage and expanded consumer base.
Project Report – Cosmetic Surgery Clinic – expanding operations through the application of e-commerce and ERP.
Executive Summary
E-commerce is fast becoming a medium for information interchange. This is one of the greatest contributions of e-commerce that allows the companies to buy, sell, or trade information and services. Companies usually launch their own website that gives customer specific information that briefs the consumers about the products and services offered by the companies. This is the initial step to E-commerce. The prospective consumer needs to fill in his personal details and specific queries he may have. The company responds to the consumer query and passes on additional information that suits the consumer needs. Web based customer relationship management has effectively integrated all modes of communication – web, email, chat, video, voice to serve and support the customers to enhance the total customer experience.
The project report provides a comprehensive study on the implementation of innovative approach to the cosmetic surgery business using e-commerce technology integrated with Enterprise Resource Planning application. The project analyses the existing business operations and strategies used by the management to drive market demand. The study highlights the potential advantages and benefits that the use of intended technology will bring to the business and how the management proposes to implement the proposed business solution using effective change management process.
The case study
Marina Plastic Surgery Clinic is located in Marina del Rey California. The clinic provides cosmetic surgery services to a niche market segment comprising of wealthy individuals. The Marina Outpatient Surgery Centre is located in the UCLA building in Marina del Rey, California. The clinic is a 10 minutes drive from the Los Angeles International Airport and provides its patients with a lift and drop facility.
The organization is a small sized business outfit employing 30 people. The owner runs the whole setup, managing and supervising the sales team, customer service team and the team of assistants who take care of patient recovery. The organization has a flat structure that enables operational staff and management to interact freely on all issues related to business development. This form of organizational structure promotes decentralization of power and decision making process. Employees feel more empowered in this kind of organization structure. The organization has two distinctive departments – the sales team that is responsible for lead generation and bookings, and the patient facilitators who are responsible for assisting the patients from the booking stage to post recovery stages. Each of these departments has a manager in charge of the departmental functions who send daily reports to the owner and chief operating officer. Additionally, there are two more people employed to take care of the financial department. The head of the patient facilitator is also responsible for interacting with the doctors who visit the clinic on the basis of appointments.
The clinic caters to wealthy clients in and around California. There is some competition from other local service providers in this market segment but owing to the exceptional customer service record the clinic has a distinctive market advantage. It currently enjoys a 40 percent market share in the region. The company currently promotes its services through print ads and sponsored articles in leading magazines and newspapers. It also runs a small advertisement on the local television channels. Besides the print and live media, company relies on word of mouth recommendations from its existing clients.
The services provided by the company include liposuction, breast augmentation, nose reshaping, eyelid surgery, laser skin resurfacing, face lift, and tummy tuck. The mission of the organization is to provide the patients with a one stop comprehensive solution for all kinds of cosmetic surgery needs in a state of the art facility that ensures complete consumer satisfaction. “We pledge to provide the finest personal service and facilities for our patients who will always enjoy warm, relaxed, yet refined ambience” (Marina Plastic Surgery.com, 2009).
The clinic has a manual patient booking system through telephones and emails. This process is time consuming. The management decided to incorporate an online enterprise resource planning application that will not only generate more leads but also automate the various processes that involve patient inquiry form, response to patient query, online booking system, online collaboration and interaction with patient facilitators and doctors in the post recovery period.
Industry Analysis
The cosmetic surgery industry in the United States is a relatively new market that is slowly gaining popularity to such an extent that everyone wants to get a makeover done to hide physical deformities or signs of advancing age. Women’s magazines and articles carry extensive information on this form of surgical treatment that can help people look better and boost confidence levels. This kind of medical practice was availed only by celebrities earlier but within the past decade people from all economic backgrounds want a cosmetic surgery done at some point of time. This social trend has increased the demand for cosmetic surgeons and facilities that provide such treatment. This industry has been experiencing strong growth in the US markets with survey reports figures reaching more than 1.8 million procedures in the year 2007 alone (American Academy of Cosmetic Surgery, 2008).
Based on the nature of surgery the industry is categorized into four distinct sectors: non-surgical cosmetic procedures, fat reduction and body sculpting, breast enhancement, and face lift. Among these sectors the fat reduction and body sculpting and breast enhancement procedures are in greater demand (Cosmetic surgery market report, 2007).
The cosmetic surgery industry is rapidly gaining prominence owing to the surging demand for this kind of services. There are number of cosmetic surgery centers mushrooming in different parts of the US to tap the booming market demand. Hence the industry faces stiff market competition.
The customers seeking cosmetic surgery services are mostly in the age group of 42 to 64 years. The American Academy of Cosmetic Surgery reports that nearly 28 percent of the national population falls in this age group that is the driving force behind the increasing demand in cosmetic surgery. The report also observes that among the patients treated, 80 percent were female and 20 percent males. Of all the cosmetic procedures performed in the year 2007, 23 percent were surgical and the remaining 77 percent were non-surgical procedures (AACS, 2007).
The suppliers of the US cosmetic surgery products cater to diverse product categories that include equipment, injectables, and implants. There are large numbers of companies catering to this market segment in the US but most of these companies specialize in one or more product categories.
The cost of cosmetic surgery depends on the nature of surgery or procedure required by the patient, the complications and risks associated with the procedure or the patient medical history. However, these procedures are expensive and beyond the budget of middle income family groups.
The industry is greatly influenced by economic progress of the country and the increasing number of affluent people that triggers demand for services of this type. People will resort to spending on such services when they have the money to spend. Hence increasing affluence and economic growth are primary drivers to the cosmetic surgery industry growth.
Company SWOT Analysis
SWOT analysis is an analytical tool provided to managers to analyze the company’s strengths, weakness, opportunities and threats. This assessment is used to assess the current viability and future growth potential of a business unit. The facts and information gathered in this process provides the base for understanding the business environment, identify strengths and weaknesses, potential internal risks and external threats that might affect the business growth and revenue prospects. The management can thus concentrate its efforts on minimizing the risks, overcoming its weaknesses, and capitalize on market opportunities.
The SWOT analysis of Marina Plastic Surgery clinic given below provides the framework for evaluating the current business strategy and organizational performance and scope of expansion:
Strengths:
Specialized services in the field of cosmetic surgery
Panel of two reputed cosmetic surgeons
Well equipped facilities that provide patients with all amenities and comfort
Well-trained patient facilitators to look after individual patient needs and assist them in preparing for the cosmetic procedures through the post-operation stage
Exceptional customer service record that has greatly promoted the services provided by the clinic through word of mouth recommendation
A dynamic management team that is willing to adopt new technology and practices to increase revenues and market share
Weakness:
Susceptible to image loss due to deterioration in services
Doctors may change clinics or set up independent practice
Opportunities:
Expanding to new markets and territories beyond California through branches or franchisees
Accessibility to wider markets with the help of innovative means such as online patient booking facility
Threats:
Economic downturn that can restrict business growth since customers facing the credit crunch will not be able to splurge on luxuries like cosmetic surgery.
Increasing market competition vying for consumers.
Change in social perceptions about cosmetic surgery in future.
Based on the SWOT analysis the management has the choice to expand market shares and operations through the implementation of online Enterprise Resource Planning application system. This system will enable the users to make online bookings and access relevant information related to the cosmetic procedures they wish to take.
An overview of the technology based innovation proposition
Businesses across the globe today are adopting innovative ways to reach their target customers. Business enterprises have come a long way from the times when barter system was used to trade commodities and services. Presently the business environment is guided by the widespread growth of multinational companies operating in markets that defy geographical boundaries. The increasing popularity and usage of Internet and e-commerce technologies in business has led to formulation of new market penetration strategies and customer service practices. Entrepreneurs are re-engineering their business strategies to accommodate advancing technology and innovation in the field of information technology and e-commerce. Technology has equipped the workforce with increased speed and accuracy that has significantly increased the overall productivity and efficiency of the organizations.
The globalization of markets as a result of increasing penetration of Internet has provided businesses with the competitive edge to expand their scale of operations. Access to service details and product specifications through the website to consumers across the globe is one of the distinctive features of Internet. This has led to greater awareness and a more knowledgeable consumer base that have in-depth information and details on the service or product they are going to buy.
The new e-business models emerging on the Internet is still in its evolution phase. There are many innovative business models that are continually being launched on the web and are making a mark in the history of e-commerce. Kenneth P. Morse, a senior lecturer and managing director of the MIT Entrepreneurship Centre in Cambridge observes, “Businesses need to make more money than they spend. The new model is the old model, but technology is essential to maintain competitive advantage, and cash flow is more important than ever.” The Internet commerce has led to new kinds of business models and most of these are tried and tested model.
Businesses across all industries are establishing their presence online that provides their customers with instant access to information on their products and services, detailed specifications of the desired service and instant interaction through web-enabled tools like live chats and user forums. Consumers can now bank online, purchase travel tickets, make hotel bookings and reservations, process financial transactions, besides purchasing consumables ranging from clothes, books, CDs, electronic products among a list of others. E-commerce has opened new vistas of marketing management and strategic planning that enable extensive consumer reach and unlimited potential for entrepreneurs. Being an evolving avenue the e-commerce remains vastly unexplored in terms of business potential and revenue generating strategies.
Business owners are driven by the market demands for instant information and customer service request processing. Online environment and enabling technologies have enhanced the speed with which the customer requests can be processed and delivered. Cosmetic surgery is a relatively new concept for many people who seek detailed information. Prospective consumers are curious about how the procedures are carried out, what are the benefits of such procedures, what complications can result from these procedures, is it safe and the expense associated with such procedures. The Internet has a vast reserve of information that can satisfy these consumer queries. There are many clinics that have made their online presence and carry out consumer transactions online. This has given them the competitive advantage over the other establishments providing similar services.
Proposed System Details
Entrepreneurs apply innovation using technology in business operations to maximize gains and profits through increased market share. The management team of Marina Plastic Surgery clinic wanted a business solution that will enhance their performance and increase market shares extending their revenue earning capacity. After a detailed study of the benefits and business advantages of using an ERP application system, the management of Marina del Rey clinic decided to implement a customized system suited to their business needs. The team decided to install an Enterprise Resource Planning application that will automate the entire organizational operations such as payroll, inventory, customer service management, finance, online bookings and sales. The ERP system is favoured business solution owing to the flexibility of information and data that it can provide the senior managers within the organization. One of the basic needs in today’s business environment is the integration of front office and back office operations for online transactions. The proposed ERP application model will provide efficient integration of back office and front office operations for online bookings and transactions.
The ERP application will feature an online web based system that provides the users with extensive information on the relevant and related cosmetic procedures, facilitate online bookings with the help of a patient facilitator who will assist the customer through the entire process. The user can fill in their needs and requirements through an online submission form with their personal contact details and preferences. The system will enable the patient facilitator to access the customer inquires through the back end query management system. The patient facilitator then responds to the queries submitted by the user through the email provided by the user or telephone. The patient facilitator then guides the user to procedural information and confirms the booking date for cosmetic surgery with the available doctor on the panel list. Besides email and telephone the users can also access the patient facilitators through live chat tool supported by the system. Once the booking is confirmed the user can pay advance or whole amount through online payment gateway provided by the system. The patients will be informed of the details of their surgery date, time and mode of transport, pick-up facilities, recovery rooms, and things to avoid before the surgery and post surgery care instructions.
Based on the booking information and details the system will generate following reports for the management team:
Booking chart for individual doctors on a weekly, monthly or user-specified time period.
Patient facilitator-wise booking reports – how many leads were converted to actual bookings by each of the patient facilitator within a specified time period.
Patient facilitator-wise earning reports with commission earned for bookings in a given time frame.
Total revenue report of the clinic in a given time frame.
Doctor earning report
Besides the above mentioned system generated reports the application will also keep track of the source of lead generation – how many customers contacted through phone, Internet, or word of mouth recommendation and the percentage of leads that were converted to actual bookings.
Aggressive marketing campaigns and sales promotion has changed the way companies are vying for consumer attention over the Internet. The knowledge that most consumers use search engines like Google and Yahoo to zero down their preference has triggered a need for Search Engine Optimization tools to increase their Net presence. Ad revenues to these Search Engines are on the increase. Companies are training employees to understand the mechanism of the sponsored ads and web site optimization tools. The relevance of keywords and web site design dynamics is increasingly being noticed and studied by the companies.
The key to increase conversion rate over the Internet is to adopt sales optimization tools online that include increasing sales through enhanced visual impact, improved navigation system, accurate product information and details. These measures are taken by online retail stores to increase conversion rates and sales.
The website will make use of search engine optimization techniques to get ranking within the first five pages of Google search through the effective use of keywords. The management will outsource the work of ERP application development to a software development company that has extensive experience in building such prototypes. The software development company will be responsible for designing, developing, implementing and training the staff on the technology. It is estimated that the cost of developing and implementing this system will be nearly USD 20,000. However the long term potential benefits in terms of increased market share and revenues is anticipated to be much higher.
The system also seeks feedback on its service and quality through an online feedback form. This enables the company to evaluate the areas that they need to upgrade or amend in order to meet customer expectations. Besides, an online testimonial section will provide the potential users with an overview of the services and facilities supported by the clinic.
Benefits of adopting e-commerce application
E-commerce has influenced all aspects of business processing with the use of appropriate technology and trends. Improved connectivity and increased accessibility has redefined the way businesses communicate with the external environment. It has led to increased automation of work processes, integrated software applications and systems using tools and technologies that enable businesses to provide efficient customer service, prompt responses to queries and feedback.
The existing business model is much localized in approach and hence the potential and existing client base depends on the number of wealthy individuals living in the specified market area. Moreover, the business relies on advertising campaigns and press media that is constrained to the regional market area. This business solution will enable the clinic to promote its services and expand its market shares to all corners of US owing to the increased connectivity and penetration of Internet into homes and offices.
The overall e-business development requires proper planning and efficient management of resources integrated with real time actual data. The managers need to assess the market opportunity and dynamics along with industrial competitive forces, product-positioning requirements, brand differentiation strategies and risk mitigation strategies.
Once the opportunity assessment is complete the next step involves assessing the resource required to execute the strategy and the overall capacity to invest and execute the business objectives. This is followed by a cost benefit analysis and the returns assessment. Once the feasibility study is over the business needs to develop real time performance monitoring system. (Applegate, 2002)
Challenges faced during implementation
Implementing changes within the organizations can be a challenging task and the successful implementation of an ERP system requires active participation of top management and leadership initiatives from the employees. The whole task of communicating the intended changes in the existing work procedure, training them on the new technology, overcoming resistance from the employees, and motivating them to accept these changes can be challenging and time consuming task.
Due to the rapid changes in the business environment entrepreneurs need to be more dynamic in their approach to human resource management practices. Evolving business climate includes massive changes in the perception of organizational leadership, managerial functions, and employee performance levels. The traditional autocratic leadership style in management is replaced by persuasive and transformational styles of leadership that encourages employee involvement in decision making process and increased employee empowerment within the organization.
The role of the manager is important in choosing the correct alternative, remedial measures, and effective troubleshooting alternatives. In many situations the information collected may not provide substantial grounds for forecasting accurately and the manager needs to speculate about future trends in consumer and competitor activity. The final task in the process of strategy formulation and implementation is to ensure that the moves are timely and everything going as per planned. The manager must decide the key success factors for the organization and provide for the continuous monitoring of results through effective control systems. The experience and business knowledge of the manager comes to test when faced with sudden challenges and putting the plan to work with necessary changes to achieve the desired results.
Change management plays a significant role in the successful implementation of the changes. All organizations and businesses are affected by change that governs the strategies adopted by these enterprises. The ability of the business outfits to adapt to changing conditions and the effective change management process is an important determinant in deciding the profitability and sustenance of the organization. Change management is one of the challenges that managers’ today face on a regular basis and successful implementation of any proposed changes highlights the ability of the organization to increase market penetration.
The change management process involves effective communication of the details of the proposed business solution, how it will resolve existing business issues, its impact on business growth and projected market shares and revenue. The workforce should be clearly communicated the goals and objectives behind the proposed solution. Initially any changes to the existing work processes will be met with stiff resistance from the workforce. The organization needs to identify core members from the workforce having leadership qualities and who can persuade the others in the team to accept the changes. The vision and objective behind the change process has to be shared by everyone concerned. Participative discussions with the team members will ensure their cooperation in the overall change management process.
Training staff members on the technology will boost their confidence levels and also motivate them to use the systems to their strategic advantage.
Constraints and limitations of the system
Technology has been a great enabler of changes in modes of business practice and models adopted by the entrepreneurs to maximize gains. However, it can also pose serious limitations or constraints that can cause distinctive problems for the growth of a successful enterprise. Business owners adopting this medium for growth need to ensure that the system application provides secured mode of connectivity to avoid violation of customer data and privileged information.
Lack of technical know-how and awareness of evolving systems is a great obstacle to successful implementation and maintenance of ERP applications. It is imperative to understand that ERP systems reflect widespread changes in business processes and work flow pattern. The proactive ness of managers and top management staff in communicating these changes to the operational workforce is a pre-requisite to change management process.
Technical constraints in the form of low bandwidth and use of too many graphics or multimedia content on the website can slow down the upload time causing impatience among users and potential clients.
Another significant issue that needs to be addressed by the system is the security and privacy of personal information collected through the application. Instances of fraud and misuse of personal information and confidential data has resulted in paranoia among online users to divulge such information. Online payment transactions using credit card and personal bank account information are also prominent issues influencing user behavior.
Recommendations to the management
The Marina cosmetic surgery clinic is strongly recommended to implement the following strategic plans to implement the change process successfully within its organization:
Communicate the change plans and proposed technology solutions to the workforce.
Provide a presentation of the system design to the concerned team members in order to illustrate its functions and utility.
Encourage active participation and discussions among the employees while presenting the design prototype of the intended application.
Incorporate necessary changes into the design prototype to ensure that the application meets the business demands and market challenges.
Provide a detailed insight into the benefits of the proposed system on the business operations highlighting the increase in work efficiency.
Train the employees on the technology.
These steps will ensure that the change management process is effective and successful.
Conclusion
The company realizes that improved communication can help in motivating employees, reduce employee resistance, and pursue change mechanism effectively. But it needs to be understood that the communication process is not simply conveying the message. It is a two-way process that needs interaction between the two parties. The management and the employees need to interact on how the plan is going to take shape and what are best possible ways to minimize risks and hurdles in the process. Giving the employees a chance to participate in management decisions not only makes them feel valuable but also ensures their support and enthusiasm in the whole process. Another vital ingredient for successful communication process is consistency. The management policies need to be consistent in their approach to instill trust and confidence in the employees. The whole purpose of selling change to the employees will be lost if the employees do not have confidence or trust in their company management.
Companies often use coaching and mentoring strategy in difficult situations where the employee behaviour affects the team and company performance. Adaptability to change is also seen as a major hurdle in successful implementation of new processes. The employees need to be motivated and inspired to accept the changes. Moreover, the company needs to assure the employees that their role in the organization will be valued in spite of the new technology and changes and they will not be declared redundant. The company will provide necessary training opportunities to equip them with required skills for the new system to work effectively. It is the human resource that forms the most valuable asset to the company and this should be communicated to the existing workforce. The accomplishment of this goal will require a dynamic leader in the company who can steer the ship to success.
It has already been established that the Internet is a powerful medium and the potential it has to offer in E-commerce context is endless. Transparency in consumer transactions and a forthcoming attitude will assure the businesses to high levels of profits and visibility on the Net. With Net Economy seeping into the day-to-day business world new strategies and paradigms are being adopted to boost Net presence and maximize revenue generation. Newsletters, content management, banner advertising, email marketing and search engine optimization are the keywords to a successful E-commerce venture.
References:
Graham Curtis and Cobham (2003) Business Information Systems – Analysis, Design and Practice 4th Edition
Lynda M. Applegate (2002, July) How to fashion your new e-business model – Accessed on Feb 23rd 2009 from – http://hbswk.hbs.edu/item/3007.html
Benefits and limitations of E-commerce – Accessed on Feb 23rd 2009 from – http://www.rocw.raifoundation.org/computing/BCA/ecommerce/lecture-notes/lecture-02.pdf
Morse, Kenneth P. 2000. E-business models. Computerworld article by Richard Trombly. Accessed on Feb 23rd 2009 from http://www.computerworld.com/industrytopics/retail/story/0,10801,54589,00.html
5. Tech-FAQ. 2008. What is ERP? Accessed on Feb 23rd 2009 from Tech-FAQ Web site: http://www.tech-faq.com/erp.shtml
6. PR Log. 2007. Cosmetic surgery Market Report. Accessed on Feb 23rd 2009 from http://www.prlog.org/10013277-cosmetic-surgery-market-report.html
7. Reuters. 2008. Cosmetic surgery market report reveals annual growth rates of between 21.7% and 69%. Accessed on Feb 23rd 2009 from http://www.reuters.com/article/pressRelease/idUS208783+16-Apr-2008+BW20080416
8. Sullivan, Deborah A. 2001. Cosmetic Surgery: the cutting edge of commercial medicine in America. Rutgers University Press
Money Week, 2005. Carving out a profit from cosmetic surgery. Accessed on Feb 23rd 2009 from http://www.moneyweek.com/investment-advice/carving-out-a-profit-from-cosmetic-surgery.aspx
American academy of cosmetic surgery. Facts and reports. Accessed on Feb 23rd 2009 from http://www.cosmeticsurgery.org/
Marina Plastic Surgery. Accessed on 13th March 2009 from http://www.marinaplasticsurgery.com
