From ECommerce to EBusiness The Convergence of Business and Technology

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From E-Commerce to E-BusinessThe Convergence of
Business and Technology
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• John A. Foster
• Principal E-Business Architect
• Eastman Kodak Company
• john.foster_at_kodak.com

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Key Questions

• Did e-commerce start with the Internet and the
  Web?
• Whats the difference between e-commerce and
  e-business?
• If the Web is so great, why did all those
  companies fail?
• Are web services the next big thing in e-business?

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Electronic Commerce (narrow definition)
Conducting business transactions through
market-facing systems.
CUSTOMERS
Order-to-Cash
Delivering services on-line
Selling products on-line
Procurement
EDI orders from customers
Purchasing goods and services electronically
SUPPLIERS
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Electronic Commerce (expanded definition)
electronic business
Conducting business through market-facing
systems.
CUSTOMERS
Order-to-Cash
Delivering services on-line
Selling products on-line
Procurement
EDI orders from customers
Purchasing goods and services electronically
SUPPLIERS
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The Beginning of E-Commerce
1980s
B2B
B2C
B2E
System to Individual
Phone System Automation
Phone System Automation
Phone System Automation
1980s
System to System
Electronic Transactions
1980s
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and the Supporting Technologies
B2B
B2C
B2E
System to Individual
IVR
IVR
IVR
1980s
System to System
EDI
1980s
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The Elements of EDI

• A strength of EDI is its transport
  infrastructure
• But it came with a price

Expensive
EDI

• Standard documents
• EDI standards
• very extensive

• ANSI X12
• ISO 9735
• UN/EDIFACT

Vocabulary

• Purchased transport
• highly reliable
• very secure

• Private network
• VANs

Transport

• Some middleware
• commonly purchased
• map from one standard to another

• Middleware
• Brokers, translators, maps

Infrastruc-ture
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Electronic Data Interchange
Connect with private network Translate documents
EDI standard documents
Middleware
Middleware
Translator
Translator
Enterprise A
Enterprise B
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Integrated Voice Response Applications
Install specialized system Connect to phone
network
Telephone
Corporate Phone Network
IVR System
Data servers
Make core systems accessible by IVR system
Middleware
Translator
Core Business Systems
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Evolution to E-Business
1990s
B2B
B2C
B2E
System to Individual
Phone System Automation
Phone System Automation
Phone System Automation
1980s
Employee Self-service
Marketing Info E-Tailing
Marketing Info Customer Self-service
1990s
System to System
Electronic Transactions
1980s
Customer Relationship Mgmt
1990s
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and the Supporting Technologies
B2B
B2C
B2E
System to Individual
IVR
IVR
IVR
1980s
Intranet/Web
Internet/Web
Internet/Web
1990s
Internet/Web
System to System
EDI
1980s
Internet/XML
1990s
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The Elements of Internet E-Business

• Many choices, but also more challenge and
  responsibility

Inexpensive ???
Internet
HTML for presentation XML for content
representation

• A few XML vocabularies
• cXML (Ariba)
• xCBL (CommerceOne)
• RosettaNet
• ebXML

Vocabulary
Core set of base standards Must address
security and redundancy and
Transport
https, https, SSL, ftp Firewalls, PKI
Many options built or purchased
Infrastruc-ture
Middleware (RPC, MOM, msg. brokers, TP
monitors) Web servers, app servers, routers ISPs
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Internet System to System
Connect with Internet Add robustness, redundancy,
security Connect with other enterprise Translate
documents
XML documents
Middleware
Middleware
Translator
Translator
Enterprise A
Enterprise B
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Web Applications
Browser
Web server
The ubiquitous web browser
Commerce application server
Data servers
Make core systems accessible by apps on app server
Middleware
Translator
Core Business Systems
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Internet economy poses opportunities and threats

• Transform traditional business models using IT as
  enabler
• Compression of time space
• 30 of BancAmericas online customers are outside
  of traditional geographic area
• Adaptec reduces manufacturing cycle from 12 to 8
  weeks, slashing 10M in inventory costs
• Always open
• Friction reduction creating new sources of
  economic value
• Intermediation premium (e.g. brokers fee) ?
• Manual sourcing by fax and phone ?
• Cost of brick mortar ?
• But adding market turbulence
• The Internet will change everything.

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Market TurbulenceTravel, Brokerage, Books
Customer Space (Physical World)
Traditional Competitor
Merrill Lynch
Travel Agencies Local Bookstores
Courtesy Cisco Systems
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The Ultimate Impact

• The Internet dramatically lowers the cost of
  communication

Potential Revolutionary Impact
Likely Incremental Impact
Financial Services Entertainment Health
Care Education Government
Retailing Manufacturing Travel Power
But Privacy issues Need for additional
technology (e.g. broadband, on-line bill
paying) Who controls the information
Why? physical factors overrule virtual Top of
the line web site ? 15-25M Warehouse
distribution system ? 150M
Courtesy Business Week
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New Tools for the Old Economy

• Tremendous tools for old economy companies to
  apply to business processes.

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Challenge Process Improvement

• E-Business is like putting a magnifying glass in
  front of your core processes

from to
Legacy Business Operational Processes
Legacy Back Office Systems
New Business Operational Processes
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Challenge Systems Development

• Product software development and information
  systems development are becoming intertwined

from to
Product Software
Information Systems
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Challenge Commercialization

• Product commercialization must become business
  commercialization

Innovation Phases
Commercialization Phases
Discovery Innovation
Definition
Design Implementation
Mfg./Operations Implementation
Production
Opportunity Selection
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Why Did the .com Companies Fail?

• Flawed business model
• Companies view the technology as their business,
  rather than having a business
• Lose money on individual transactions
• Amazon.com loses almost 3 per order on
  multi-product orders
• Lack of control over supply of what they sell
• Priceline.com
• All the good ideas duplicated by established
  concerns with deep pockets and staying power

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Likely Winners
NOT
?
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Web Services the Future?
2000s
B2B
B2C
B2E
System to Individual
IVR
IVR
IVR
Intranet/Web
Internet/Web
Internet/Web
Internet/Web
System to System
EDI
Internet/XML
Web Services
Web Services
Web Services
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Web Services

• Built on the foundation from Internet e-Business

???
Web Services
New standards but built on XML.
WSDL, UDDI for service interaction But
business, security,
Vocabulary
Built on a ubiquitous core but is it robust
enough?
XML-based (e.g. SOAP) Over http, https,
Transport
Much the same as for Internet e-Business
Infrastruc-ture
Middleware (RPC, MOM, msg. Brokers, TP
monitors) Web servers, app servers, routers ISPs
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Web Services ready for prime time?

• Favorable Signs
• Takes component foundation
• Reuse culture
• Semantic agreement
• and leverages Internet technologies
• http
• XML

• Challenges
• Cross-vendor interoperability
• Simplicity
• Security
• Pre- and post-transaction processes
• Trading partner agreements

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Core Services
Who does this service?
Deploy Service

• Directory Services
• UDDI

Provider
Requestor
Request Service
Deliver Service
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Helper Services
Requestor

• Who does this service?
• Products
• Price

Deploy Service

• Directory Services
• UDDI

Provider
Request Service
Deliver Service
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Summary

• E-business has been around for 20 years, but the
  opportunities have been accelerated by the
  Internet and the web.
• Business is still business
• The Internet hasnt changed that though for a
  while many thought it might have.
• Web services may be the next big thing, but
  EDI, IVR, etc. will probably still be around.