E-Business and E-Commerce

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E-Business and E-Commerce

• MIS 4133
• Software Systems
• Fall 2005

2
Outline

• Internet and WWW
• E-commerce and E-business
• E-business patterns/models
• E-business advantages/disadvantages and CSFs
• Online industries

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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
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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
  (NSFnet)

Napier, et al., 2001 Oz, 2002
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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
  protocol
• 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
6
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.
• 2003 Internet2 Abilene high-speed network
  achieves 8 Gbps speed in a transcontinental test
  (completed in Feb 2004)

Laudon Traver, 2004 Napier, et al., 2001 Oz,
2002 Zakon, 2005
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Internet 2

• 1996 created to recapture the original
  enthusiasm of the ARPANET (an advanced research
  network)
• It is an experimental test bed for new networking
  technologies has achieved bandwidths of 10 Gbps
• Also used by universities to conduct large
  collaborative research projects that require
  several supercomputers connected at very fast
  speeds

Schneider, 2002
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Internet Domain Servers (Internet Hosts)
Laudon Traver, 2004 Oz, 2002 Schneider, 2002
Zakon, 2005
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Types of Domains Oct. 2003
NetFactual.com, 2003
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Growth of the WWW
Schneider, 2002 Zakon, 2005
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(No Transcript)
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Number of People Online
September 2000
Napier, et al., 2001
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Active Internet Users
Jessup Valacich, 2006
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Time on the Internet
Rayport and Jaworski, 2002
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E-commerce vs. E-business

• E-commerce
• Buying and selling products/services
  electronically
• E-business
• Conducting of business electronically

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E-Business Structural Patterns
Begins as a Channel, But Extends to Total
Transformation of Business
e-Channel
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

Kalakota, et al., 2001
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E-Channel Pattern
Transaction Enhancement
Consumer
Manufacturer
E-Channel Compression
Consumer
X
Manufacturer
E-Channel Expansion
Consumer
Manufacturer
E-Channel Innovation
Kalakota, et al., 2001
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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
Kalakota, et al., 2001
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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!
  Auctions
• Megatransaction portals Travelocity

Kalakota, et al., 2001
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E-Market Maker Pattern

• Exchanges
• Buyers and suppliers negotiate prices
• Virtual distributors
• Takes control of accounts receivable 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

Kalakota, et al., 2001
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Pure E Digital Products Pattern
Kalakota, et al., 2001
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E-Business Models

• Brick-and-Mortar
• A traditional business with no online presence
• Click-and-Mortar / Click-and-Brick /
  Brick-and-Click
• A traditional businesses online presence that is
  used to enhance its brick-and-mortar operations
• Dot Com
• Only an online presence no physical store

Deitel, et al., 2001 Oz, 2002
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E-Business Models

• B2C sells products/services directly to
  consumers
• 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
• P2P enables Internet users to share files and
  computer resources directly without having to go
  through a central Web server
• Napster.com
• M-commerce use of wireless digital devices to
  enable transactions on the Web

Laudon Traver, 2004 Napier, et al., 2001 Oz,
2002
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B2B

• Intranet
• Allows employees to view and use internal Web
  sites that are not accessible to the outside
  world
• 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 Schneider, 2002
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B2B

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

Krishnamurthy, 2003 Napier, et al., 2001 Oz,
2002
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B2B

• Trading hubs
• Provide a marketspace for multiple vertical
  markets
• VerticalNet
• Post and browse markets
• Provide a marketspace where participants post buy
  and sell opportunities
• CATEX, CreditTrade, TechEx

Laudon Traver, 2004 Napier, et al., 2001
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B2B

• 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 Schneider, 2002
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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
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E-Business Disadvantages

• Sellers
• Rapidly changing technology
• Insufficient telecommunications
  capacity/bandwidth
• Difficulty integrating existing systems with
  e-business software
• Problems maintaining system security and
  reliability
• 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
  sellers
• Desire to touch and feel products before purchase
• Resistance to unfamiliar buying processes,
  paperless transactions, and electronic money

Napier, et al., 2001
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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
• Spam
• Requiring registration before browsing site
• Many graphics
• Secondary browser windows
• Lack of FAQ page

Huff, et al., 2000
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Online Industries

• Art Dealers
• Showcase work Art.com, Guild.com
• Automotive
• Research and purchase new and used cars
• Dealers can search online databases for cars
• Communicate between departments responsible for
  automobile production and therefore improve the
  way cars are manufactured
• Form partnerships with competitors
• Autobytel.com, Autoparts.com, Autoweb.com
• Banking
• Access account info, pay bills and write checks
  online
• Wellsfargo.com, Directbanking.com,
  Claritybank.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 Laudon Traver, 2004
Schneider, 2002
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Online Industries

• Children
• Sesamestreet.com, Educationplanet.com
• Education
• Elementary, high school, college and adult
  students
• Gen.com, Ecollege.com, Tutor.com,
  Varsitybooks.com
• Energy
• Standard way for energy businesses to communicate
• EnronOnline.com (former site), Altranet.com
• 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,
  Sportingnews.com
• Comedy Laugh.com, Comcentral.com
• Games Mplayer.com, Flipside.com
• Hollywood iFilm.com, Inside.com

Deitel, et al., 2001 Schneider, 2002
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Online Industries

• Event Tickets
• TicketWeb.com, Pollstar.com, TicketCity.com,
  Tickets.com
• Genealogy
• Trace lineage Genealogy.com, Ancestry.com
• Government
• Interact with local and national politicians
• Email, newsgroups, and discussion boards are
  effective means of communicating about political
  issues
• US government offers documentation, news and
  reports on the Web
• Whitehouse.gov, FBI.com, Gsa.gov
• Grocery Stores
• Peapod.com, Homegrocer.com
• Insurance
• Inform potential customers about the insurance
  options
• Prudential.com, Getmet.com

Deitel, et al., 2001 Schneider, 2002
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Online Industries

• Legal Services
• Legal representation, law students improving
  studies
• Cybersettle.com, Lexis.com, Nexis.com
• Loans
• Fill out documents quickly and return loan
  approvals within minutes
• Eloan.com, Ditech.com
• Medical
• Case studies, medical journal articles, doctors
  answering questions
• Webmd.com, Sickbay.com
• Publishing
• Digital creation and distribution of electronic
  content
• Pearson.com, Atrandom.com, Fictionworks.com,
  ESPN.com, Usnews.com
• Real Estate
• Post listings Consumers can buy, sell, and
  mortgage property
• Homes.com, Apartments.com, eRealty, zipRealty.com

Deitel, et al., 2001 Laudon Traver, 2004
Schneider, 2002
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Online Industries

• Retailer
• Communicate easily with suppliers, shipping
  companies and customers Bill customers and
  accept payment EDI
• Compusa.com, Victoriasecret.com, WalMart.com
• Trading
• Etrade.com, Ameritrade.com
• Travel
• Helps commercial airline industry to fill more
  seats and reduce costs
• Travelocity.com, Cheaptickets.com, Orbitz.com
• Transportation and Shipping
• Track shipments Ups.com, Fedex.com
• Keep trucks fully loaded and ensure timely
  delivery Trucking.net

Deitel, et al., 2001 Schneider, 2002
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References

• 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.
• Eisenmann, T.R. (2002). Internet Business
  Models Text and Cases, McGraw-Hill Companies,
  Inc. New York.
• Huff, S.L., Wade, M., Parent, M., Schneberger, S.
  and Newson, P. (2000). Cases in Electronic
  Commerce, Irwin McGraw-Hill Co., Inc.
• Jessup, L. and Valacich, J. (2006). Information
  Systems Today, 2nd edition, Pearson Education,
  Inc., Upper Saddle River, NJ.
• Kalakota, R., Robinson, M. and Tapscott, D.
  (2001). E-Business Roadmap for Success 2.0,
  Addison Wesley Longman, Inc.
• Krishnamurthy, S. (2003). E-Commerce Management
  Text and Cases, Thomson Learning.
• Laudon, K.C. and Traver, C.G. (2004).
  E-commerce Business. Technology. Society.,
  Addison Wesley.

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References

• Napier, H.A., Judd, P.J., Rivers, O.N. and
  Wagner, S.W. (2001). Creating a Winning
  E-Business, Course Technology, Thomson Learning,
  Inc.
• NetFactual.com (2003), accessed 17 February
  2005.
• Oz, E. (2002). Foundations of e-Commerce,
  Pearson Education, Inc., Upper Saddle River, New
  Jersey.
• Poirier, C. C. and Bauer, M. J. (2000). E-Supply
  Chain Using the Internet to Revolutionize Your
  Business, Berrett-Koehler Publishers, Inc.
• Rayport, J.F. and Jaworski, B.J. (2002).
  Introduction to E-Commerce, McGraw-Hill
  Companies, Inc. New York.
• Schneider, G.P. (2002). Electronic Commerce, 3rd
  edition, Course Technology Thomson Learning,
  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.
• Zakon, R.H. (2005). Hobbes Internet Timeline
  v8.0, http//www.zakon.org/robert/internet/timeli
  ne/, accessed 17 February 2005.