e-business e-commerce
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E-BusinessE-Commerce
William R. Mussatto
CyberStrategies, Inc.mussatto@csz.com
8/15/2000
E-Commerce Topics
• E-Commerce Overview
• B2B: Business-to-Business– Procurement Models
• B2C: Business-to-Consumer
• C2C: Consumer-to-Consumer
E-Commerce OverviewContext: Three Components
• Supporting Infrastructure
• Electronic Business Processes (how business is conducted)
• Electronic Commerce Transactions (buying and selling)
E-Commerce OverviewSupporting Infrastructure
• Computers, routers, and other hardware
• Satellite, wire, and optical communications
• System and applications software
• Support services: web site development, hosting, consulting, electronic payment, and certification services
• Human capital, such as programmers
E-Commerce OverviewE-Business Processes
• Electronic business (e-business) is any process that a business organization conducts over a computer-mediated network
• Many examples:– production-focused– customer-focused– internal or management-focused
E-Commerce OverviewE-Business Process Examples:
Production-focused
• Procurement
• Ordering
• Automated Stock Replenishment
• Payment Processing
• Electronic Links with Suppliers
• Production Control – processes directly related to production process
E-Commerce OverviewE-Business Process Examples:
Customer-focused
• Marketing
• Electronic Selling (B2C or B2B)
• Processing of Customer Orders and Payments
• Customer Management and Support (CRM)
E-Commerce OverviewE-Business Process Examples:
Internal or Management-focused
• Automated Employee Services
• Training
• Information Sharing
• Video Conferencing
• Recruiting
• Advantages?
E-Commerce Overview
• Electronic commerce is any transaction completed over a computer-mediated network that involves the transfer of ownership or rights to use goods or services– from Census Bureau
• Mostly: Electronic Buying and Selling of Goods – not just on the Internet
E-Commerce Overview
• Not Really New– EDI: Electronic Data Interchange
• B2B
• Internet Has Globalized E-Commerce– non-proprietary, common, communications
infrastructure
E-Commerce Overview
• Primarily Web-Based– HTTP and HTTPS are transport mechanisms– SMTP used for notification and verification
purposes– FTP used for download of soft goods– EDI is also quite substantial and becoming
“web enabled”
E-Commerce OverviewSome Examples from the Census Bureau
• U.S. Census Bureau– http://www.census.gov/epcd/www/ebusines.htm
• An individual purchases a book on the Internet.
• A government employee reserves a hotel room over the Internet.
E-Commerce OverviewSome Examples from the Census Bureau
• A business calls a toll free number and orders a computer using the seller's interactive telephone system.
• A business buys office supplies on-line or through an electronic auction.
• A retailer orders merchandise using an EDI network or a supplier's extranet.
E-Commerce OverviewSome Examples from the Census Bureau
• A manufacturing plant orders electronic components from another plant within the company using the company's intranet.
• An individual withdraws funds from an automatic teller machine (ATM).
B2B: Business-to-Business
• Organizational Buying and Selling
• Procurement Models– buyer push
• request for quote / information– hotelsupplies.com, medibuy.com
• offering a bid price (priceline)
• sellers bid to sell
– buyer pull: browsing catalogs and adding to shopping cart
B2C: Business-to-Consumer
• Census Bureau Statistics:– Third Quarter 2000: $5.3B in U.S. online retail
sales• 0.78% of all retail (4th qtr. 1999 0.64% )
– See also: http://www.census.gov/mrts/www/mrts.html
B2C: Business-to-Consumer
• Transaction Multiplier Effect– one B2C transaction causes several B2B
transactions to take place– not unique to online transactions
• but happens in nearly real-time
Consumer-to-Consumer
• Auctions– seller push
• buyers bid
• Listings– seller push– buyer pull– tend to be free or as service to get visitors to a
site.
E-Commerce SummaryDigital Economy
• Growth outpacing last year’s most optimistic projections– as share of retail portion, e-commerce remains
quite small-- less than 1 percent
• From 1995 to 1998, IT-producers contributed to 35% of real economic growth– yet accounted for only 8 percent of U.S. GDP
E-Commerce SummaryDigital Economy
• In 1996 and 1997, falling prices in IT-producing industries brought down overall inflation by an average 0.7%– partially responsible for keeping inflation at
interest rates low simultaneously
• IT industries have achieved extraordinary productivity gains– 10.4% average annual growth
E-Commerce SummaryDigital Economy
• By 2006, almost half of the U. S. workforce will be employed by industries that are either major producers or intensive users of information technology products and services.
• New high demand for core IT workers – engineers, computer scientists
Problems with .com
• Faulty assumptions– Front end is all important.– Delivery is easy.
• Attack of the brick and mortars.– Barns & Nobel– L.L. Bean – ToysRus
Class Problem
• Design either a B2B site or a B2B site– Outline the areas– Specify what must happen when a customer
goes to actually buy the item.
– Take about 30 minutes and appoint someone to describe the steps.
Extra
• Detailed walk through simple shopping cart system.
• Discussion of Industrial Strength E-Commerce as IBM sees it.
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