Modeling business representational activity online: A case study of a customer-centered business

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Abstract

What kinds of content—information and interactive mechanisms—should businesses put online? Existing online businesses are driven largely by metaphors of the web as ‘online catalog brochure’. Clearly, such a limited approach under-utilizes the interactive capabilities of online technologies. In this paper, we argue that successful businesses have likely evolved non-obvious ‘offline’ practices that can be translated to online practices. We show how such practices can be uncovered by observing representational activity in a business. Specifically, we introduce a distributed-cognition based method for analyzing representational activity in terms of the movement of information across media, which enables us to systematically explore the space of potential interactive mechanisms. We demonstrate our method on a successful small business that would not at first appear to benefit from online content beyond that provided by the catalog metaphor. The analysis revealed several novel interactive mechanisms, including a product expert that personalizes a combination of products based on customer-specified problems, and a mechanism that automatically calculates product consumption rates, sending customers e-mail reminders to repurchase products near the end of their life span.

Introduction

The growing number of online consumers suggests that businesses might do well to focus efforts on developing online mechanisms that improve business–customer interactions. However, businesses often fail to exploit the interactive capabilities of online technologies.1 For example, in a survey we conducted of a large web shopping mall, 88% of the businesses used the web only for advertising or for eliciting e-mail feedback on products (see Fig. 1). Although some highly interactive online businesses exist, they are the exception rather than the rule. Two metaphors drive the development of online content for businesses: ‘Web as electronic paper’ and ‘Web as online catalog’. Yet these metaphors clearly under-utilize the interactive capabilities of online technologies. A paper catalog is passive, containing static content that gives customers relatively delayed transactions with businesses. In contrast, online technologies can be developed to be both active and proactive, with dynamic content that provides customers more immediate transactions with businesses. Unfortunately, for businesses seeking ways to use online technologies, strategies for exploiting interactive capabilities are underdeveloped.

One strategy for developing online content is to copy what other businesses have done. For example, if one business puts a chat room online, a ‘copycat’ business would do the same. Through such a strategy, a business might eventually add enough interactive content to provide effective customer service. Until reaching this point, however, it runs the risk of presenting an incomplete and incoherent view of its customer services. Moreover, by using the copycat strategy, a business becomes a ‘technology follower’, and cannot use online technologies to build a competitive advantage through differentiation. Ideally, a business should use a systematic approach to discovering online mechanisms that customers perceive as valuable and that are consistent with existing organizational objectives and practices.

The strategy we advocate is based on the notion that reality is far more complex than even the best multimedia web site. To discover innovative ways of using online technologies to serve customers, a business ought to start by understanding its offline, real-world customer-service activities—rather than the online activities of other businesses. A successful business undoubtedly has good customer-service activities already in place, and these activities, or at least portions of them, may be translated online. Furthermore, small businesses will likely have developed better customer service strategies than large ones, as their survival typically depends on providing good customer service. At issue is how to characterize a business's existing offline customer service activities so that one can identify those activities that can be beneficially placed online. Our approach is to characterize the representational aspects of a business's existing customer service activities and to use the resulting model to explore ways of supporting these representational activities online.2

Consider that the standard ‘web as catalog’ metaphor is simply a special case of placing a business's representational activities online. In this case, the easily identified representational activities around customer searching, browsing, and buying products in a paper catalog can be translated ‘word for word’ into online technologies. Yet there are many more representational activities that businesses and customers engage in that are not so obvious. To illustrate this, we present a case study of how a small business interacts with its customers. The business we studied—Hair Crafters,3 a regional chain of hair salons—provides an interesting context for analyzing business-customer interactions because it is simultaneously a service provider (cutting hair) and a goods provider (manufacturing its own line of hair care products). Moreover, based on the physical nature of its goods and services, it might not seem that any of Hair Crafters' business or customer activities can be handled appropriately online. However, through detailed analysis of the representational activity surrounding customers as they interact with employees and other resources in the business, we show that there are many representations and representational activities that can be translated into representations and activities online.

We begin by arguing that a business is a kind of supra-individual cognitive system, and then outlining an approach to studying a business as a cognitive system. We next present our case study of Hair Crafters, which illustrates the application of our three step approach: (1) identify the business's products, (2) model the representational activities that constitute or support the construction of the products, and (3) diagnose computational opportunities—places where a business can use computational technologies to support business-customer interactions. Our analysis of Hair Crafters revealed several interactive mechanisms, including a product expert that personalizes a combination of products based on customer-specified problems, and a mechanism that automatically calculates product consumption rates, sending customers e-mail reminders to repurchase a product near the end of its lifespan.

Section snippets

Businesses as cognitive systems

To begin, we must view a business as an intelligent or cognitive system4 to determine how to use information technology to benefit the business. But is a business really cognitive? In their classic treatise, ‘A Behavioral Theory of the Firm’, Cyert and March [1], argue that a business is a coalition in which the ‘members include managers, workers, stockholders, suppliers, customers, lawyers, tax collectors, regulatory

Analyzing a business as a cognitive system for information technology purposes

Distributed cognition researchers have analyzed the representational activity in a number of different cognitive systems performing a variety of tasks, including air traffic control [7], aviation [8], [9], computer-mediated work [10], connectionist language learning [22], fishing [11], guitar song imitation [12]; helicopter piloting [13], large ship navigation [14], puzzle solving [15], side-by-side programming [16], and video-game playing [17]. Common to all these analyses is a model of the

Business background: Hair Crafters

Hair Crafters is a chain of eight salons in Western Pennsylvania, the largest salon chain in that region. Each salon houses as many as 20 stylists who cut hair. Hair Crafters positions itself as an innovative and trendy hair salon: their advertisements depict young male and female models between the ages of 18 and 30 showcasing different hairstyles. In addition to haircuts, Hair Crafters manufactures its own hair and body care product line, consisting of 35 products. It divides these products

Step 1: identify products

To understand the representations and representational practices that support the business, we start by identifying the products of the business. A product is operationalized as anything the customer leaves the business with that he or she did not have upon entering. This includes any knowledge the customers acquire as a consequence of interacting with employees, tools, or other artifacts within the business. The institution's notion of a product is already apparent from the first step (in this

Step 2: model representations and representational activity

Given the products, the next step is to characterize how the products are created, with particular attention to task-relevant representations. In doing this, the researcher is performing a kind of business process analysis. A business process is typically defined as ([19]; c.f., [20], [21]):

… a related group of steps or activities that use people, information, and other resources to create value for internal or external resources.

One problem with this definition is its vagueness. What

Step 3: diagnose computational opportunities

Despite the physical nature of Hair Crafter's goods, our model revealed an abundance of representations and representational activity supporting their creation and delivery to customers. We can use this model to discover ways of developing online content that go beyond those suggested by the ‘web as electronic catalog’ metaphor, which dictates the creation of web pages with product descriptions and prices, along with an online ordering mechanism. In this third and final step, we show how to

Conclusion

Deciding what to put online is a key issue facing today's managers. Decisions about content are often driven by a Web as catalog metaphor. Though this approach can result in workable sites, it underutilizes the interactive capabilities of online technologies. Moreover, it is not clear how this approach makes a business more effective. We argued that a business should study its offline representational activities for insights about what content should be placed online—effectively expanding the

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