The EManager

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The E-Manager

• Design and implementation of the Six Internet
  Faces (Web Store/Marketplace, brochureware,
  Customer Relationship Management, Extranet, and
  Intranet, Global) Web Site
• Develop a customer-centric Internet capability
• Link front-office and back-office processes
  to Web activities
• Re-design existing business processes to
  leverage Internet technologies
• Link Web processes to legacy systems
• Continuous monitoring and improvement of the
  e-business/e-commerce strategy
• Linking the business plan to the
  e-business/e-commerce strategy
• Environmental scans to identify opportunities
• Process Management

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Defining E-terms

• Electronic Management leverages technology to
  effectively operate and manage a business or
  public sector service. (Can we do it faster,
  cheaper, or better?)
• Electronic Commerce is the process of buying and
  selling goods and services electronically
  involving transactions using the Internet,
  networks, and other digital technologies.
  Includes customer service and after-sales
  support. Can be Business-to-business (B2B) or
  Business-to-consumer (B2C).
• Electronic Business refers to the use of the
  Internet and other digital technology for
  organizational communication and coordination and
  management of the firm.

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The Six Faces of the Internet

• Virtual Storefront
• Marketplace concentrator
• On-line exchange
• Information broker
• Transaction broker

• Auction
• Reverse auction
• Aggregator
• Digital product delivery
• Content provider
• On-line service provider

Public Side
Web Business Models
Brochureware
Global Sites
Customer Relationship Management
Extranet(SCM)
Intranet
Private Side
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• Introduction to Electronic Commerce

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Learning Objectives

• In this module, you will learn about
• The basic elements of electronic commerce
• Differences between electronic commerce and
  traditional commerce
• Economic forces that have created a business
  environment that fosters electronic commerce
• The ways in which businesses use value chains to
  identify electronic commerce opportunities
• The ways in which businesses use SWOT analysis
  and evaluate business opportunities

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Traditional Commerce and Electronic Commerce

• To many people, the term electronic commerce
  means shopping on the part of the Internet called
  the World Wide Web. Stats Can reported that 3.2
  million Canadian households spent 3B through
  Internet shopping in 2003. Up 25 from previous
  year.
• Although consumer shopping worldwide on the Web
  is on the rise, electronic commerce is much
  broader and encompasses many more business
  activities than just Web shopping.
• Internet usage for business to business (B2B) is
  were the action is. Click here!

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Traditional Commerce and Electronic Commerce

• Electronic commerce refers to business activities
  conducted using electronic data transmission via
  the Internet and the World Wide Web.
• The three main elements of e-commerce are
• Business-to-consumer (B2C)
• Business-to-business (B2B)
• The transactions and business processes that
  support selling and purchasing activities on the
  Web
• Other categories include consumer-to-consumer
  (C2C i.e. eBay) and constituent-to-government
  (C2G).

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Electronic Commerce
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Electronic Commerce

• Electronic Funds Transfers (EFTs) have been used
  by banks for many years.
• Electronic Data Interchange (EDI) occurs when one
  business transmits computer-readable data in a
  standard format to another business.

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Electronic Commerce

• Businesses who engage in EDI with each other are
  called trading partners.
• The standard formats used in EDI contain the same
  information that businesses have always included
  in their standard paper invoices, purchase
  orders, and shipping documents.
• Firms, such as General Electric and Wal-Mart,
  have been pioneers in using EDI to improve their
  purchasing process.

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Value Added Network (VAN)

• A value added network is an independent firm that
  offers connection and EDI transaction forwarding
  services to buyers and sellers engaged in EDI.
• VANs are responsible for ensuring the security of
  transmitted data.
• VANs charge a fixed monthly fee plus a
  per-transaction charge to subscribers.

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Activities as Business Processes

• Business processes refer to the group of logical,
  related, and sequential activities and
  transactions in which businesses engage,
  including
• Transferring funds
• Placing orders
• Sending invoices
• Shipping goods to customers

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Comparing Traditional Commerce and Electronic
Commerce Buyers Side
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Comparing Traditional Commerce and Electronic
Commerce Sellers Side
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Business Process Suitability to Type of Commerce
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Electronic Commerce

• Commodity item product or service that is hard
  to distinguish from the same products or services
  provided by other sellers, making them especially
  well suited to electronic commerce.
• Shipping profile collection of attributes that
  affect how easily a product can be packaged and
  delivered.

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Advantages of Electronic Commerce

• Electronic commerce can increase sales and
  decrease costs.
• Web advertising reaches a large amount of
  potential customers throughout the world.
• The Web creates virtual communities for specific
  products or services.

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Advantages of Electronic Commerce

• A business can reduce its costs by using
  electronic commerce in its sales support and
  order-taking processes.
• Electronic commerce increases sale opportunities
  for the seller.
• Electronic commerce increases purchasing
  opportunities for the buyer.

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Disadvantages of Electronic Commerce

• Some business processes are difficult to be
  implemented through electronic commerce.
• Return-on-investment is difficult to apply to
  electronic commerce.
• Businesses face cultural and legal obstacles to
  conducting electronic commerce.

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International Electronic Commerce

• About 60 percent of all electronic commerce sites
  are in English, therefore many language barriers
  need to be overcome.
• The political structures of the world present
  some challenges.
• Legal, tax, and privacy are concerns of
  international electronic commerce.

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Economic Forces and Electronic Commerce

• Business activity today occurs within large
  hierarchical business organizations, referred to
  as firms or companies.
• Transaction costs are the total of all costs that
  a buyer and a seller incur as they gather
  information and negotiate a purchase-sale
  transaction.

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Transaction Costs

• Transaction costs are the total of all costs that
  a buyer and a seller incur as they gather
  information and negotiate a purchase-sale
  transaction.
• Another significant component of transaction
  costs can be the investment a seller makes in
  equipment or in the hiring of skilled employees
  to supply the product and services to the buyer.

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Economic Forces and Electronic Commerce
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Economic Forces and Electronic Commerce
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Economic Forces and Electronic Commerce
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Network Effects

• As more people or organizations participate in a
  network, the value of the network to each
  participant increases.
• Example An email account that is part of the
  Internet is far more valuable than an email
  account that connects only to other people in the
  company.

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Value Chains

• Electronic commerce includes so many activities
  and transactions that it can be difficult for
  managers to decide where and how to use it in
  their businesses.
• One way to focus on specific business processes
  as candidates for electronic commerce is to break
  the business down into a series of value-adding
  activities that combine to generate profits and
  meet other goals.

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Value Chains

• A strategic business unit is one particular
  combination of product, distribution channel, and
  customer type.
• A value chain is a way of organizing the
  activities that each strategic business unit
  undertakes to design, produce, promote, market,
  deliver, and support the products or services it
  sells.

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Strategic Business Unit Value Chains

• The support activities of a value chain for a
  strategic business unit include
• Finance and administration
• Human resources
• Technology development

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Industry Value Chains

• Value system describes the larger stream of
  activities into which a particular business
  units value chain is embedded.
• Industry value chain (IVC) refers to value
  systems.
• IVC is used to identify opportunities for cost
  reduction, product improvement, or channel
  reconfiguration.

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Value Chain for Strategic Business Units
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SWOT AnalysisEvaluating Business Unit
Opportunities

• Most electronic commerce initiatives add value by
  either reducing transaction costs, creating some
  type of network economics effect, or a
  combination of both.
• In SWOT analysis, you list the strengths and
  weaknesses of the business unit and then identify
  opportunities presented by the markets of the
  business unit.

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SWOT AnalysisEvaluating Business Unit
Opportunities
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The Role of Electronic Commerce

• Electronic commerce can play a role in
• reducing costs
• improving product quality
• reaching new customers or suppliers
• creating new ways of selling existing products

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The Role of Electronic Commerce

• By examining elements of the value chain outside
  of the individual business unit, managers can
  identify many business opportunities, including
  those that can be exploited by using electronic
  commerce.