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Electronic Commerce Outline Computing Laws Internet and WWW


Electronic Commerce Outline Computing Laws Internet and WWW E-commerce and E-business Rules of E-business Trends E-business patterns/models E-business advantages ... – PowerPoint PPT presentation

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Title: Electronic Commerce Outline Computing Laws Internet and WWW

Electronic Commerce
  • Computing Laws
  • Internet and WWW
  • E-commerce and E-business
  • Rules of E-business
  • Trends
  • E-business patterns/models
  • E-business advantages/disadvantages and CSFs
  • Online industries

Computing Laws
  • Moores Law
  • Every 18 months computing power doubles while
    cost is constant
  • Metcalfes Law
  • Networks increase exponentially with power with
    the addition of each new node or user
  • Gilders Law
  • Aggregate bandwidth will triple annually

  • Agrarian
  • Land cheapest resource
  • Industrial
  • Steam power cheapest resource
  • Information
  • Phase 1 computer cycle cheapest resource
  • Phase 2 network capacity cheapest resource
    (because of Gilders Law)

Internet and WWW
  • Internet
  • Public worldwide network of networks, connecting
    many small private networks
  • Protocol is TCP/IP
  • WWW
  • Documents that are linked

Napier, et al., 2001
Brief History of the Internet
  • Originated in the 1960s US DOD developed a
    network of military computers called the ARPANET
    (advanced research projects agency network)
    (Next, researchers at colleges/universities began
    using it to share data)
  • 1971 The first email message was sent from one
    computer to another.
  • 1980s the military portion became a separate
    network called the MILNET and the NSF began
    overseeing the remaining non-military portions

Napier, et al., 2001 Oz, 2002
Brief History of the Internet
  • Thousands of other government, academic, and
    business computer networks began connecting to
    the NSFnet
  • Late 1980s the term Internet had become widely
    used to describe this huge worldwide network of
    networks and TCP/IP becomes the standard network
  • 1987 Internet has 10,000 hosts
  • 1988 Internet has 60,000 hosts 6,000 of the
    hosts are disabled by the first computer virus
    (worm) to hit the Internet
  • 1989 Internet has 100,000 hosts

Napier, et al., 2001 Oz, 2002
Brief History of the Internet
  • 1990 Tim Berners-Lee develops HTML and the WWW.
  • 1991 NSF lifts ban on commercial traffic
    E-commerce on the Internet begins.
  • 1992 Internet has 1,000,000 hosts 50 of them
    use HTML to form the Web sites Jean Armour Polly
    coins the term surfing the Internet.
  • 1993 Internet has 10 million hosts Internet2
    project is announced.
  • 1998 Internet has 36.8 million hosts 4.2
    million of them are web sites.
  • 1999 Retail sales on the Internet are estimated
    at 7.8 billion.

Napier, et al., 2001 Oz, 2002
Internet Domain Servers
Oz, 2002
Number Online
September 2000
Napier, et al., 2001
Oz, 2002
E-commerce vs. E-business
  • E-commerce
  • Buying and selling products/services
  • E-business
  • Conducting of business electronically

Rules of E-Business
  • Technology is the cause/driver of business
  • If any entity in the value chain begins doing
    business electronically, companies up and down
    the value chain must follow suit or risk being
    substituted or excluded from the chains
  • Structure and flow of info is powerful and
  • Move from industrial age to information age
  • Changes in the business structure branding,
    customer relationships, supplier integration
    creates need for info-centric business designs

Christensen, 2000
Rules of E-Business
  • Inability to overthrow the dominant, outdated
    business design often leads to business failure
  • companies must live in a state of perpetual
    transformation, continuously creating fundamental
    change, improvement, and innovation.
  • Must anticipate and respond quickly to changing
    customer demands
  • Listening to customers through e-commerce allows
    companies to become the cheapest, the most
    familiar or the best
  • Speed of service, convenience, personalization,

Rules of E-Business
  • Technology should be used to enhance the entire
    experience surrounding the product
  • Amazon.com
  • The future business design uses reconfigurable
    e-business models to best meet customers needs
  • Business webs link businesses, customers, and
    suppliers and compete with other business webs
    (not individual companies)
  • Amazon.com, CarPoint, Travelocity, etc.

Rules of E-Business
  • The goal of new business designs is for companies
    to create flexible outsourcing alliances
  • Individual companies cannot do everything well
  • Dont forget about the application infrastructure
    it is critical for success
  • Failure is a mgmt problem, not a technology
  • Need strong leadership to align business
    strategies, processes, and applications
  • Leader must understand the products/service
    delivery channels

Customer-Oriented Trends
  • Faster service
  • Self-service
  • ATMs, Travelocity
  • More product choices (personalization)
  • Amazon.com, Wal-Mart
  • Integrated solutions
  • Microsoft Office Suite, Wal-Mart, Toys R Us
  • Privacy

E-Service Trends
  • Integrated sales and service (customization and
  • Consistent and reliable customer service
  • Flexible fulfillment and convenient service
  • Increased process visibility
  • Order status (package tracking), product pricing,
    product availability

Organizational Trends
  • Outsourcing
  • An external provider performs a business process
    in order to improve overall business performance
    in a particular area
  • Contract manufacturing
  • Focus on what the company does best and contract
    out other manufacturing
  • Virtual distribution (intermediaries)
  • Aggregate buyers and sellers by using Web

Employee Trends
  • Hiring the best and brightest
  • Keeping talented employees

Enterprise Technology Trends
  • Integrated enterprise applications
  • Multichannel integration
  • Store, phone, Web, wireless, etc.
  • Middleware
  • To create multichannel integration
  • Legacy Appls
  • Significant value in legacy but integration can
    be daunting

General Technology Trends
  • Wireless web applications
  • Handheld computing and info appliances
  • Mobility
  • Infrastructure convergence
  • Phone, cable, wireless, computer data networks
  • Application service providers
  • Hosts and manages business applications on behalf
    of a client

E-Business Design
  • Diagnosis difficult to gain perspective on
    where you really are
  • Reversing the Value Chain what do customers
  • Narrow focus discipline of market leaders
  • Operational Excellence risk of being blindsided
    by a disruptive technology
  • Product Leadership risk of innovating for
    innovations sake and how do you incorporate
    innovations developed elsewhere
  • Cost Intimacy risk of listening to what
    customers want today and not preparing to deliver

Treacy and Wiersema, 1995
E-Business Structural Patterns
Begins as a Channel, But Extends to Total
Transformation of Business
e-Portal (B2C)
Pure E
Click and Brick
e-Market-Makers (B2B)
  • Basic efficiency,
  • effectiveness enhancements
  • as the selling become
  • e-enabled
  • Selling goods/services
  • Payment/settlement
  • enhancements
  • Traditional business
  • transferred to the Net
  • Rise of new intermediaries
  • New forms of supply chain
  • integration
  • Consolidation/transformation
  • of intermediary industry
  • Customer expects E
  • everything
  • Fundamental redesign of
  • business
  • New structures to allow market
  • making, trading, and virtual
  • warehousing

E-Channel Pattern
Transaction Enhancement
E-Channel Compression
E-Channel Expansion
E-Channel Innovation
Click-and-Brick Pattern
  • Brick Mortar
  • Localized inventory
  • In-store shopping
  • experience
  • Immediacy (try, buy,
  • take home)
  • Service (returns,
  • repairs, exchanges)
  • Click
  • Infomediation
  • Speed
  • Direct, one-to-one
  • experience
  • Personalized content
  • Automation
  • (assistants, alerts)

Click Brick
E-Portal Pattern
  • Intermediary/middleman offering an aggregated set
    of services for a specific well-defined group
  • Superportals AOL, Yahoo!, Amazon.com
  • Auction portals eBay, Amazon.com, Yahoo!
  • Megatransaction portals Travelocity

E-Market Maker Pattern
  • Exchanges
  • Buyers and suppliers negotiate prices
  • Virtual distributors
  • Takes control of AR but not physical inventory
  • Lead generation
  • Derive revenue from ads, commissions, or fees for
    leads to suppliers
  • Catalog aggregators
  • Helps normalize info coming from diverse sources
  • Auctions
  • Reverse auctions

E-Business Advantages
  • Sellers
  • Increased sales opportunities
  • Decreased transaction costs
  • Operate 24-7
  • Reach narrow market segments that may be widely
    distributed geographically
  • Access to global markets
  • Increased speed and accuracy of info exchange
  • Bring multiple buyers and sellers together
  • Buyers
  • Wider product availability
  • Customized/personalized info and buying options
  • Shop 24-7
  • Easy comparison shopping and one-stop shopping
  • Access to global markets
  • Quick delivery of digital products and of info
  • Participate in auctions, reverse auctions,
    knowledge exchanges

Napier, et al., 2001
E-Business Disadvantages
  • Sellers
  • Rapidly changing technology
  • Insufficient telecommunications
  • Difficulty integrating existing systems with
    e-business software
  • Problems maintaining system security and
  • Global market issues language, political
    environment, currency conversions
  • Conflicted legal environment
  • Shortage of skilled technical employees
  • Buyers
  • Concern over transaction security and privacy
  • Lack of trust when dealing with unfamiliar
  • Desire to touch and feel products before purchase
  • Resistance to unfamiliar buying processes,
    paperless transactions, and electronic money

Napier, et al., 2001
E-Business Models
  • B2B (business-to-business) and EDI
  • The relationship between two or more companies
  • Can be applied to simple relationships between a
    single buyer and a single seller, as well as to
    complex distribution and fulfillment systems that
    link hundreds of suppliers and manufacturers
  • Click-and-Mortar
  • A traditional businesses online presence that is
    used to enhance its brick-and-mortar operations

Deitel, et al., 2001 Oz, 2002
E-Business Models
  • B2C sells products/services directly to
  • Amazon.com, Autobytel.com, Pets.com
  • B2B sells products/services to other businesses
    or brings multiple buyers and sellers together in
    a central marketplace
  • VerticalNet, HoustonStreet.com, CATEX
  • B2G businesses selling to local, state, and
    federal agencies
  • eFederal, iGov.com
  • C2C consumers sell directly to other consumers
  • eBay, InfoRocket, American Boat Listing
  • C2B consumers name own price, which businesses
    accept or decline
  • Priceline.com, ReverseAuction.com

Napier, et al., 2001 Oz, 2002
  • Intranet
  • Allows employees to view and use internal Web
    sites that are not accessible to the outside
  • Extranet
  • Two or more Intranets connected via the Internet,
    where participating companies can view each
    others data and complete business transactions
    such as purchasing

Napier, et al., 2001
  • Storefronts
  • Provide businesses with purchase, order
    fulfillment, and other value-added services
  • Staples, Office Depot
  • Vertical markets
  • Provide a trading community for a specific
  • MediSpeciality.com, HotelResource.com,
  • Aggregators
  • Provide a single marketspace for business
    purchasing from multiple suppliers
  • Chemdex, MetalSite, VIPAR

Napier, et al., 2001 Oz, 2002
  • Trading hubs
  • Provide a marketspace for multiple vertical
  • VerticalNet
  • Post and browse markets
  • Provide a marketspace where participants post buy
    and sell opportunities
  • CATEX, CreditTrade, TechEx

Napier, et al., 2001
  • Auction markets
  • Provide a marketspace for buyers and sellers to
    enter competitive bids on contracts
  • e-Steel, HoustonStreet.com, Altra, FreeMarkets
  • Fully automated exchanges
  • Provide a marketspace for the automatic matching
    of standardized buy and sell contracts
  • PaperExchange.com

Napier, et al., 2001
E-Business Models
  • Internet-only Establishments
  • Convenience of home shopping and often reduced
    costs for the consumer
  • Face the challenges of name recognition and
    customer satisfaction
  • Storefront
  • Combines transaction processing, security, online
    payment and info storage to enable merchants to
    sell their products online
  • Buyer and seller interact directly
  • Uses shopping cart technology, online shopping

Deitel, et al., 2001
E-Business Models
  • Auction
  • Forum through which Internet users can assume the
    role of either the seller or the bidder
  • Portal
  • Give visitors the chance to find almost
    everything they are looking for in one place
  • Dynamic-Pricing
  • Methods that may not be possible without the
  • Name-your-price comparison-pricing
    demand-sensitive pricing bartering rebates
    free products/services

Deitel, et al., 2001 Napier, et al., 2001
Dimensions of Ecommerce
Web Server
  • Cyber
  • Low Friction
  • Dynamic
  • Logistics is not a
  • core competency

  • Physical
  • High Friction
  • Capital Intensive
  • Logistics is a
  • core competency

Office Factory
Legacy Transaction System
Poirier and Bauer, 2000
E-Commerce CSFs
  • Add value to products/service
  • Convenience, info value, disintermediation,
    reintermediation, price, choice
  • Focus on a niche and then expand
  • Maintain flexibility
  • Segment geographically
  • Get the technology right
  • Manage critical perceptions
  • Presence, brand, trust
  • Provide exceptional service
  • Create effective connectedness
  • Understand Internet culture

Huff, et al., 2000
Online Industries
  • Retailer
  • Communicate easily with suppliers, shipping
    companies and customers
  • Bill customers and accept payment
  • Compusa.com, Victoriasecret.com
  • Medical
  • Case studies, medical journal articles, doctors
    answering questions
  • Webmd.com, Sickbay.com

Deitel, et al., 2001
Online Industries
  • Travel
  • Internet helps the commercial airline industry to
    fill more seats and reduce costs
  • Travelocity.com, Cheaptickets.com
  • Transportation and Shipping
  • Track shipments as they pass checkpoints en route
    to their final destination
  • Ups.com, Fedex.com
  • Keep trucks fully loaded and ensure timely
  • Trucking.net, Gf-x.com

Deitel, et al., 2001
Online Industries
  • Automotive
  • Research and purchase new and used cars
  • Dealers can search online databases for cars
  • The Internet improves communication between
    departments responsible for automobile production
    and therefore improves the way cars are
  • Form partnerships with competitors
  • Autobytel.com, Autoparts.com

Deitel, et al., 2001
Online Industries
  • Energy
  • The Web offers a standard way for energy
    businesses to communicate, therefore reducing
    operating costs
  • EnronOnline.com, Altranet.com
  • Career Services
  • Job seekers Monster.com
  • Employers HotJobs.com, CareerPath.com
  • Career JobsOnline.com, HotJobs.com,
    Monster.com, HeadHunter.net
  • Contracting Guru.com

Deitel, et al., 2001
Online Industries
  • Art Dealers
  • The Internet can showcase work and reach a global
  • Art.com, Guild.com
  • Grocery Stores
  • Considered to be a time saver can create an
    electronic shopping list delivery to home
  • Peapod.com, Homegrocer.com

Deitel, et al., 2001
Online Industries
  • Real Estate
  • Brokers can post listings
  • Consumers can buy, sell, and mortgage property
  • Use digital signatures
  • Homes.com, Apartments.com
  • Legal Services
  • Legal representation, lawyers administering
    services, law students improving studies
  • Cybersettle.com, Lexis.com, Nexis.com

Deitel, et al., 2001
Online Industries
  • Government
  • Interact with local and national politicians
  • Email, newsgroups, and discussion boards are
    effective means of communicating about political
  • US government offers documentation, news and
    reports on the Web
  • Whitehouse.gov, FBI.com, Gsa.gov

Deitel, et al., 2001
Online Industries
  • Insurance
  • Inform potential customers about the insurance
    options that exist for individuals and businesses
  • Prudential.com, Getmet.com
  • Children
  • Sesamestreet.com, Educationplanet.com
  • Event Tickets
  • TicketWeb.com, Pollstar.com, TicketCity.com
  • Genealogy
  • Trace lineage
  • Genealogy.com, Ancestry.com

Deitel, et al., 2001
Online Industries
  • Banking
  • Access account info, pay bills and write checks
  • Wellsfargo.com, Directbanking.com,
  • Loans
  • Fill out documents quickly and return loan
    approvals within minutes
  • Eloan.com, Ditech.com
  • Trading
  • Etrade.com, Ameritrade.com

Deitel, et al., 2001
Online Industries
  • Education
  • Elementary, high school, college and adult
  • Gen.com, Ecollege.com, Tutor.com,
  • Publishing
  • Digital creation and distribution of electronic
    content, including printed materials, music,
    video and software
  • Pearson.com, Atrandom.com, Fictionworks.com,
    ESPN.com, Usnews.com

Deitel, et al., 2001
Online Industries
  • Entertainment
  • MP3 MP3.com, Napster.com
  • Independent artist Farmclub.com
  • Interactive Web TV Mtv.com, CNN.com, Webtv.com
  • Web Radio Spinner.com, Real.com, Npr.com
  • Sports Espn.com, Nfl.com, Nba.com,
  • Comedy Laugh.com, Comcentral.com
  • Games Mplayer.com, Flipside.com
  • Hollywood iFilm.com, Inside.com

Deitel, et al., 2001
  • Christensen, C. (2000). The Innovators Dilemna,
    Harvard Business School Press, Boston, MA.
  • Deitel, H.M., Deitel, P.J. and Steinbuhler, K.
    (2001). e-Business and e-Commerce for Managers,
    Prentice Hall, Upper Saddle River, New Jersey.
  • Huff, S.L., Wade, M., Parent, M., Schneberger, S.
    and Newson, P. (2000). Cases in Electronic
    Commerce, Irwin McGraw-Hill Co., Inc.
  • Kalakota, R., Robinson, M. and Tapscott, D.
    (2001). E-Business Roadmap for Success 2.0,
    Addison Wesley Longman, Inc.

  • Napier, H.A., Judd, P.J., Rivers, O.N. and
    Wagner, S.W. (2001). Creating a Winning
    E-Business, Course Technology, Thomson Learning,
  • Oz, E. (2002). Foundations of e-Commerce,
    Pearson Education, Inc., Upper Saddle River, New
  • Poirier, C. C. and Bauer, M. J. (2000). E-Supply
    Chain Using the Internet to Revolutionize Your
    Business, Berrett-Koehler Publishers, Inc.
  • Treacy, M. and Wiersema, F. (1995). The
    Discipline of Market Leaders Choose Your
    Customers, Narrow Your Focus, Dominate Your
    Market, Perseus Books, Cambridge, Massachusetts.
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