e-business: chapter 1: intro to e-b

Chapter 1

Introduction to e-business

and e-commerce

| [email protected], 2013

and e-commerce

Arry Akhmad ArmanSchool of Electrical Engineering and Informatics

[email protected]

Modified from original ppt of “E-Business and E-Commerce Management” book.

• Define the meaning and scope of e-business and e-commerce and their different elements

• Summarize the main reasons for adoption of e-commerce and e-business and barriers that may restrict adoption

Learning Outcomes


and barriers that may restrict adoption

• Use resources to define the extent of adoption of the Internet as a communications medium for consumers and businesses

• Outline the business challenges of introducing e-business and e-commerce to an organization.

Management Issues

• How do we explain the scope and implications of e-business and e-commerce to staff?

• What is the full range of benefits of introducing e-


benefits of introducing e-business and what are the risks?

• How great will the impact of the Internet be on our business? What are the current and predicted adoption levels?

Case: Amazon.com


Case: eBay.com


Case: detik.com


Case: kompas.com


Case: Facebook.com


Case: tokobagus.com


Case: App Store


Case: e-book & e-magazine


E-Business Opportunities

ReachReach• Over 1 billion users globally

• Connect to millions of products


E-Business

E-Business

RichnessRichnessAffiliationAffiliation

• Detailed product information

on 20 billion + pages indexed

by Google. Blogs, videos, feeds…

• Personalised messages for users

• Partnerships are key

in the networked economy

The impact of the Internet

on business

• Andy Grove, Chairman of Intel, one of the early adopters of e-commerce, has made a meteorological analogy with the Internet.


Internet.

• He says: The Internet is a typhoon force, a ten times force, or is it a bit of wind? Or is it a force that fundamentally alters our business? (Grove, 1996)

Andrew Stephen ("Andy")

Grove (born 2 September

1936), is a Hungarian-born

American businessman,

engineer, and author. He is a

science pioneer in the

semiconductor industry. He

escaped from Communist-

controlled Hungary at the age

of 20 and moved to the

United States where he

finished his education. He

later became CEO of Intel

Corporation and helped

transform the company into

the world's largest

manufacturer of

semiconductors.

Image source: wikipedia

E-business Risks

• Making wrong decision about e-

business investments

• Provide poor online customer

experience


experience

Image source: www.infobarrel.com

Internet risks – what can go wrong

with a transactional site?

• Web sites that fail because of spike in visitor traffic

• Hacker penetrating the security of the system


• A company emails customer without receiving their permission

• Problems with fulfilment

• E-mail customer-service enquiries from the web site don’t reach the right person

Image source: www.infobarrel.com

Different Perspectives of EC

• Communication

• Business Process

• Service

• Online


• Online

Image source: inkvibe.com

The distinction between Buy-side

and Sell-side e-commerce


Types of sell-side e-commerce

• Transactional e-commerce sites

– www.mph.com.my

• Services-oriented relationship-building web sites

– www.perodua.com.my


– www.perodua.com.my

• Brand-building sites

– www.nokia.com

• Portal or media sites

– www.yahoo.com

Summary and examples of transaction alternatives

between businesses, consumers and governmental

organizations



Figure 1.3 Dubit C2C site for a youth audience (www.dubit.co.uk)

E-Business

• All electronically mediated information exchanges,

both within an organization and with external

stakeholders supporting the range of business

processes


processes

• E-business concepts:

– Applied to strategy and operations

– An adjective to describe businesses that mainly operate

online

E-Business vs E-Commerce

• E-commerce: All electronically mediated

information exchanges between an organization

and its external stakeholder


• Not solely restricted to the actual buying and

selling of products, but also includes pre-sale and

post-sale activities

E-Business vs E-Commerce

• E-commerce covers outward-facing processes that touch customers, suppliers and external partners, including sales, marketing, order taking, delivery, customer service, purchasing of raw materials and supplies for production and procurement of indirect operating-expense items, such as office supplies.


supplies.

• E-business includes e-commerce but also covers internal processes such as production, inventory management, product development, risk management, finance, knowledge management and human resources. E-business strategy is more complex, more focused on internal processes, and aimed at cost savings and improvements in efficiency, productivity and cost savings.

http://www.computerworld.com/s/article/53015/The_difference_between_e_business_and_e_commerce?pageNumber=1

E-Government

• The application of e-business technologies

to government and public services for

citizens and businesses


• Cover services for:

– Citizens

– Suppliers

– Internal communications

Image source: ec.europa.eu

Three definitions of the relationship

between e-commerce and e-business


UK rate of adoption

of different digital media


Source: MORI Technology Tracker, January 2006. See www.mori.com/technology/techtracker.shtml for latest details

Drivers of Consumer Internet Adoption

ContentContent

CustomizationCustomizationCost

reductionCost

reduction


CommunityCommunity

ConvenienceConvenience

ChoiceChoice

Barriers of Consumer Internet

Adoption

• No perceived benefit

• Lack of trust

• Security problems

• Lack of skills


• Lack of skills

• Cost

Image source: www.charlesstone.com

Drivers of Business Adoption

Increase RevenueIncrease Revenue


Cost Reduction

Cost Reduction

DriversDrivers

Attitudes to business benefits of

Online Technologies


Cost/efficiency and competitiveness

drivers

Cost/efficiency drivers

• Increasing speed with which supplies can be obtained

Competitiveness drivers

• Customer demand

• Improving the range and

quality of services offered


obtained

• Increasing speed with which goods can be dispatched

• Reduced sales and purchasing costs

• Reduced operating costs

quality of services offered

• Avoid losing market share

to businesses already

using e-commerce.

Tangible and Intangible Benefits

Tangible benefits Intangible benefits

Increased sales from new sales leads giving rise to

increased revenue from:

– new customers, new markets

– existing customers (repeat-selling)

– existing customers (cross-selling).

Marketing cost reductions from:

– reduced time in customer service

Corporate image communication

Enhancement of brand

More rapid, more responsive marketing

communications including PR

Faster product development lifecycle enabling faster

response to market needs

Improved customer service


– reduced time in customer service

– online sales

– reduced printing and distribution costs of

marketing communications.

Supply-chain cost reductions from:

– reduced levels of inventory

– increased competition from suppliers

– shorter cycle time in ordering.

Administrative cost reductions from more efficient

routine business processes such as recruitment, invoice

payment and holiday authorization.

Improved customer service

Learning for the future

Meeting customer expectations to have a web site

Identifying new partners, supporting existing

partners better

Better management of marketing information and

customer information

Feedback from customers on products

Adoption of Internet and e-business

Services across Europe


Source: Eurostat, Community Survey on ICT usage in enterprises, eEurope (2005) Information Society Benchmarking Report, © European Communities 2005, http://europa.eu.int/information_society

Key Categories of Internet Applications

in Indonesia vs Global


Source: http://www.teknojurnal.com/2011/03/11/perkembangan-internet-di-indonesia-pada-tahun-2010/

Barriers to Development of

Online Technologies


The McKinsey 7S framework

• The McKinsey 7S Frameworkis a management model developed by well-known business consultants Robert H. Waterman, Jr. and Tom Peters (who also developed the MBWA-- "Management By


Source: Adapted from Waterman et al. (1980)

the MBWA-- "Management By Walking Around" motif, and authored In Search of Excellence) in the 1980s.

• This was a strategic vision for groups, to include businesses, business units, and teams.

The McKinsey 7S framework

• The 7S are structure, strategy, systems,

skills, style, staff and shared values.

• The model is most often used as a tool to

assess and monitor changes in the

internal situation of an organization.

Usage

• Improve the performance of a company

• Examine the likely effects of future changes within a company

• Align departments and processes during a merger or acquisition

• Determine how best to implement a proposed strategy

The Seven Interdependent Elements


• OBJECTIVE OF THE MODEL (To analyze

how well an organization is positioned to

achieve its intended objective)

The Seven Interdependent Elements

• The basic premise of the model is that there are seven internal aspects of an organization that need to be aligned if it is to be successful

• Hard Elements– Strategy– Structure– Systems

• Soft Elements– Shared Values– Skills– Style– Staff

Exercise

• Please identify one company for each the types of

e-commerce below:

– Transactional e-commerce sites

– Services-oriented relationship-building web sites


– Brand-building sites

– Portal or media sites

• Refer to Figure 1.2 and identify a company for each

the category provided.

End of Slides


e-business: chapter 1: intro to e-b

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