EC 589 ECommerce Management

1
EC 589 -E-Commerce Management

• Introduction
• From E-Commerce to E-Business

DePaul University CTI John Fisher
2
Agenda

• Course Overview
• The New Economy
• From E-Commerce to E-Marketplace
• Profile of customers
• E-Business Transformation
• An Example
• Implications for the Association Segment
• Next Class

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Course Overview

• EC 589 E-Commerce Management
• Capstone course for ECT Majors
• Development of e-business strategies
• Approaches and models for business transformation
  using the Web
• The fall of the dot-coms
• Implementation issues in a brick mortar world
  again

4
Course Overview

• Distance Learning Section
• Same assignments
• Same requirements
• COL section will participate in two classes
• Course Format
• Group discussion rather than formal lecture
• Case studies and recent topics in the news
• Guest speakers

5
Textbooks

• Main Text
• E-Business 2.0 Roadmap for Success.  By Ravi
  Kalakota and Marcia Robinson, Addison-Wesley,
  2000.  ISBN 0-201-60480-9
• Supplemental Text (choose one)
• Now or Never How Companies Must Change Today to
  Win The Battle for Internet Consumers.  By Mary
  Modahl, 2000. ISBN 0-06-662012-0
• Enterprise E-Commerce by Peter Fingar, Harsha
  Kumar, Tarun Sharma (January 2000) Meghan-Kiffer
  Press ISBN 0929652118
• Futurize Your Enterprise Business Strategy in
  the Age of the E-customer by David Siegel
  (September 16, 1999) John Wiley Sons ISBN
  0471357634
• Dynamic E-Business Implementation Management
  How to Effectively Manage E-Business
  Implementation (E-Business Solutions) by Bennet
  P. Lientz, Kathryn P. Rea (July 2000) Academic
  Pr ISBN 0124499805

6
Additional Material Resources

• Other reading
• Located in Course Documents section of COL Web
• HBR, McKinsey Quarterly, Gartner Group
• Current news articles In the News
• Other resources
• Class web page, BusinessWeek.com, etc
• See Link page on Class Web
• Your company or one you know

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Assignments

• 1 Industry Impact Analysis 20 (Individual)
• 5 Page paper class presentation (Sept 19th)
• 2 Case Analysis 1 20 (July 9th) (Group)
• 5 Page paper 1 page summary for class
  discussion
• 3 Case Analysis 2 - 20 (Oct 3rd)
  (Individual)
• 5 Page paper 1 page summary for class
  discussion
• 4 E-Business Analysis 25 (Nov 21st) (Group)
• 8 Page paper class presentation
• Class Participation 15
• Discussion groups on web page and class discussion

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Introductions

• John Fisher
• M.S. DePaul University 1989
• CIO and EVP - Smith, Bucklin and Associates
  (www.sba.com)
• Previously CNA Insurance and Continental Bank
• Phone [phone] x3313
• E-mail jfisher_at_cti.depaul.edu or
  John_Fisher_at_sba.com
• Office Hours 500 - 545 Wednesday room 1108
• Class Web Page http//facweb.cs.depaul.edu/jfishe
  r/EC589/
• COL Web Page http//dlweb.cti.depaul.edu/auth/lo
  gin.asp
• 2 Minute Introduction
• Name, Company, Title/Responsibilities
• Web page, e-mail address
• Something else about yourself
• What you expect to get out of this class?

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Setting the Stage
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Evolvement of E-Commerce

• Brochureware
• Consumer E-Commerce (B2C)
• Transaction, Personalization, Service
• E-business (B2B)
• Internet, Intranet, and Extranet
• E-Marketplace (B2B)
• Vertical and Horizontal

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Rise of the Internet Usage

• 100 million people are online in US today, up
  from 36 million in 1996
• Internet service market will grow from 1.3
  billion (1997) to 57 billion by 2003.
• Online retailing (b2c) will grow from 20
  billion (1999) to 188 billion in 2004.
• Online trade (b2b) will grow to 2.7 trillion by
  2004, 53 from eMarketplace.

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The New Economy
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Driving Principles of the New Economy

• Intangible matters more. Information,
  convenience, and time are more important than
  physical products.
• Space has vanished. Global and instant
  connection.
• Time is collapsing. Instant interactivity breeds
  accelerated change.
• People are the prime driving force. Brain power
  and innovativeness determines success.

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Driving Principles of the New Economy

• Growth is accelerated by network.
• Values rise exponentially with market share.
• Efficiency is achieved through infomediaries.
• Markets are driven by consumers and buyers.
• Personalization defines 11 interaction.
• Ubiquity of information and services is expected.

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From eCommerce to eMarketplace
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From E-Commerce to E-Marketplace

• Internet Commerce (B2C)
• Intranets
• Extranets
• E-business integration
• E-Marketplace

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The Internet Value Proposition

• Transform customer relationship
• Customer centered, self service, 11 choices
  delivery to customer location customer needs
• Displace traditional source of values
• Physical vs. digital value
• Economies of scale vs economy of scope
• Mass produced vs mass customized
• Information vs. knowledge value
• Distribution as constraints vs. enabler
• Local vs. global

18
B2C Business Models

• Merchant Model
• virtual merchants
• Catalogue merchants
• Click Brick
• Advertising Model
• Horizontal portal
• Vertical portal
• Personalized portal

• Intermediary (Brokerage)
• Buy/sell fulfillment
• Buyer/demand aggregator
• Virtual mall
• Hypermediary (financial settlement)
• Auction broker
• Reverse auction

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Four Strategies

• Channel Master
• Integrate the commerce value chain with existing
  operations build deeper relationship with
  customers
• Customer Magnet
• Community and knowledge sharing
• Value Chain Pirate
• Digital Distributor

20
The Commerce Value Chain
Get and keep customer interest
Turn interest into orders
Service customers
Manage orders
Attract
Act
React
Interact
Catalog Sales static dynamic
AdvertisingMarketing channels media
Order capture-- Shopping Cart Payment Fulfillment
goods
Customer service Order tracking
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Traditional Value Chain
Customers
Suppliers
MassMarket
Logistics
Operation
RD
Marketing Sales
Customer Service
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B2B Business Models

• Firm Based
• Cisco
• FedEx
• UPS
• Enterprise Systems (ERP)
• mySAP.com
• Marketplace
• Workplace
• E-community marketplaces

• Virtual SCM
• Sun Data uses FedEx
• Marketplaces (Intermediary)
• Vertical Hubs
• E-steel
• Chemedx
• Functional Hubs
• MRO.com
• BidCom
• Marketmakers
• GEIS
• Viewlocity -- High volocity supply chain

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Value Chain Decomposed
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B2B E-Marketplaces

• Catalog Model
• Aggregating suppliers and buyers between
  participants in the hub (Chemdex, MRO.com)
• Auction Models
• Spatial matching of buyers and sellers (for one
  of a kind, non standard, perishable (Auction.com)
• Exchange Models
• Temporal matching of supply and demand, real-time
  bid-ask matching (e-Steel)

25
E-Marketplaces Networking Value Chain
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Next Class

• E-Business Strategy
• Readings in text and Supplemental material
• Come prepared to discuss the topics