Introduction to E- Business and E Commerce

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E Commerce - DefinitionE-commerce (electronic commerce or EC) is the buying and selling of goods and services on the Internet, especially the World Wide Web.

Online ordering ,payment and delivery of tangible goods and service such as software and electronic magazines.Electronic fund transfer.

E-commerce Types:

Business-to-business (B2B) Consumer (B2C) Business-to-government (B2G) Consumer-to-consumer (C2C) Mobile commerce (m-commerce)

1. What is B2B e-commerce?B2B e-commerce is simply defined as ecommerce between companies. About 80% of e-commerce is of this type. Examples: Intel selling microprocessor to Dell

2. What is B2C e-commerce? Business-to-consumer e-commerce, or commerce between companies and consumers, purchasing physical goods or receiving products over an electronic network. Example: Dell selling me a laptop to Mr. Mohammad Mohammad Ali

3. What is B2G ecommerce? Business-to-government e-commerce or B2G is generally defined as commerce between companies and the public sector. It refers to the use of the Internet for public procurement, licensing procedures, and other government-related operations. Example: Business pay taxes, file reports, or sell goods and services to Govt. agencies.

4. What is C2C ecommerce?Consumer-to-consumer e-commerce or C2C is simply commerce between two individuals or consumers. Example: Ali buying an iPod from Ahmad on eBay

5. What is m-commerce? M-commerce (mobile commerce) is the buying and selling of goods and services through wireless technology-i.e., handheld devices such as cellular telephones Mobile Ticketing Information Services Mobile Banking

E- Commerce Significance

1. Exploration of New Business 2. Building strong relation with the Customers 3. Improvement of Business Transaction4. Effective Performance 5. Greater Economic Efficiency 6. Execution of Information 7. Incorporating Transaction 8. Increasing of Revenue 9. Improving efficiency 10. Improving Network Form 11. Improving Organizational Model

Who uses eBusiness?71% access and use online catalogues that lists products/prices services51% receive payments for products and services69% pay for products and services45% take orders for products and services65% place orders for products and services

DRIVER FOR E-business and e-commerce adaption A: Two general benefits to create e-businessIncrease revenue: arising from increased reach to larger customer base and encouraging loyalty and repeat purchases among existing customer.Cost reduction: achieved through delivering service electronically .reduction including staff cost , transport cost and cost of material such as paper.B:COST/efficiency drivers:Increase speed with which suppliers can be obtained(goods) Increase speed with which goods can be dispatchedReduced sales and purchasing cost (storage, cargo).Reduce operating cost.C-competitiveness drivers : Customer demand Improving the range and quality of service offered. Avoiding losing market share to business already using e-commerce .

Examples of E-BusinessLabel Manufacturer Uses the Internet to increase export sales by allowing agents and distributors from all over the world to see the latest designs, place orders and manage theiraccount.Olive FarmerListing of products on the website for sale as well as providing an onlineshopping facility for a network of other olive farms.RestaurantNo website is required to benefit from wireless technology and handheld digitalassistants taking orders from tables which are electronically sent to the kitchen.Pottery ImporterA content management system allows up to date products, pricing and galleryevents timetable to be published internally, reducing costs of external websitedevelopment.RecruitmentImplementation of an online process automated system using an ApplicationConsultantsService Provider model to streamline job applications process.

WHAT IS THE IMPACT OF ELECTRONIC COMMERCE?

Marketing- The companies advertise their products over internet using websites and make there product available to the consumer using online purchase system.

Computer sciences - development of different network and computing technologies and languages to support e-commerce and e-business, for example linking front and back office legacy systems with the web-based technology.

Finance and accounting Online banking, online transaction, online shopping are the outcome of electronic commerce.

Economics- the impact of e-commerce on local and global economies; understanding the concepts of a digital and knowledge-based economy and how this fits into economic theory.

Production and operations management - the impact of on-line processing has led to reduced cycle times. It takes seconds to deliver digitized products and services electronically

Management information systems analysis, design and implementation of e-business systems within an organisation

Human resource management issues of on-line recruiting.Business law and ethics the different legal and ethical issues that have arisen as a result of a global virtual market

McKinseys 7s Framework of E-Business

Structure: how will the e business change be managed

System :do new operating procedure or busniess processes need to be introduced.

Style: the style of leadership adopte .

Staff: is the appropriate mix of staff available.

Skills are the correct skills available internally ?what training required.

Super ordinate goals : this refer to the higher goals of the company that may be encapsulated.

Strategy :direction and scope of the company over long term

Benefits of e-commerce to society

Enables more flexible working practices, which enhances the quality of life for a whole host of people in society, enabling them to work from home. Not only is this more convenient and provides happier and less stressful work-ing environments, it also potentially reduces environmental pollution as fewer people have to travel to work regularly.

Connects people. Enables people in developing countries and rural areas to enjoy and access products, services, information and other people which otherwise would not be so easily available to them.

Facilitates delivery of public services. For example, health services avail-able over the Internet (on-line consultation with doctors or nurses), filing taxes over the Internet through the Inland Revenue website.

Limitation of E-CommerceLack of sufficient system security, reliability, standards and communication protocols. Rapidly evolving and changing technology. Under pressure to innovate and develop business models to exploit the new opportunities. Problems with compatibility of older and newer technology. A basic technical knowledge is lacking in consumer.Cost of access to the Internet is somewhat expensive.Lack of security and privacy of personal data. Breakdown in human interaction .

What is m-commerce?

M-commerce (mobile commerce) is the buying and selling of goods and services through wireless technology-i.e., handheld devices such as cellular telephones and personal digital assistants (PDAs). Japan is seen as a global leader in m-commerce.

Industries affected by m-commerce include:Financial services Telecommunications, Service/retail Information services

Review Questions1. Define E Business give some examples.2. What are drivers of E Business discuss?3. What are the impact of E Commerce/E Business on:Marketing,Computer Science,Finance & Accounting, Economics,Production & Operation Management,MIS,Human Resource Management,Business Law & Ethics

4. Illustrate McKinsey 7s Frame work.5. Classify different types of E Commerce and Explain them.6. What are the benefits of E Business on:Organization, II. International Market PlaceIII. Operational Cost Saving, IV. Mass Communication7. How E commerce / E Business provide benefits to consumer. 8. What are limitations of E Commerce?9. Define M Commerce.

E BusinessUnit II Presentation

Unit - IIE-Business EnvironmentBusiness environment refers to different forces or surroundings that affect business operations. Such forces include customers, competitors, suppliers, distributors, industry trends, substitutes, regulations, government activities, the economy, demographics, and social and cultural factors. Others are innovations and technological developments.

A-Micro-environment 1- -Customers These are those individuals who actually consumes the products and services. They are motivated by the e-advertisements. 2. - Competitors a company in the sameindustryor a similar industry whichoffersa similarproductorservice. The presence of one or more competitors can reduce thepricesofgoods and servicesas thecompaniesattempt togaina largermarket share. Today all the companies are trying to use technology of E-business to grab the market.3- Intermediaries are new or existing intermediaries offering products or services from your competitors while you are not represented?4 - Suppliers are suppliers offering different methods of procurement to competitors that give them a competitive advantage?

B - Macro-environment

1 Economic factors: These include interest rates, taxation changes, economic growth, inflation and exchange rates For example: higher interest rates may deter investment because it costs more to borrow and a strong currency may make exporting more difficult because it may raise the price in terms of foreign currency.2 - Social factors- Changes in social trends can impact on the demand for a firm's products and the availability and willingness of individuals to work3-Technological factors: new technologies create new products and new processes. I phone 5 and Windows phone create a different aspect of mobile communication.

Marketplace channel StructuresChannel structures describe the way a manufactures or selling organizing delivers products and services to its customers. The distribution channel will consist of one or more intermediaries such as wholesalers and retailer.

1- Reintermediation: the creation of new intermediaries between customers and suppliers providing services such as supplier search and product evaluation.

2 - Disintermediation: the removal of intermediaries such as distributors or brokers that formerly linked a company to its customers .

3. Countermediation : Creation of a new intermediaryPortalsPortal: a web site that acts as a gateway to information and services available on the internet by providing search engines, directories and other services such as personalized news or free email.

Portals provide the following benefits to the user:Aggregation The user can go to a single place for all content and applications.Customization The preferences for a user determine how the portal looks and feels.Personalization The user can obtain content that is specific to their interests and needs.Organization The user can arrange the content and applications to make better sense of the information.Integration The user can work with multiple applications and content sources in a unified fashion.

Portals typically include the following features and benefits:Search Enterprise and web-based search facilitiesContent Management Creation, management, and delivery of contentContent Repurposing Including content from multiple disparate data sourcesPortals optionally include the following features and benefits:Workflow Business process managementSingle Sign-On Allows users to log on once for all applications within the portal

Types of PortalsVertical portal: presents information focusing on a specific subject for a particular set of peoplesuch as http://www.pets.com (pets) http://www.mp3.com/(music) http://www.garden.com/ (gardening)

Horizontal portal: provide a range of services such as Yahoo! Excite, AltaVista, and AOL.com.

Business modelThe plan implemented by a company to generate revenue and make a profit from operations. The model includes the components and functions of the business, as well as the revenues it generates and the expenses it incurs.

Business models on the webE-shopE-procurementE-mallsE-auctionsVirtual communitiesEtc

Revenue models

Describe methods of generating income for an organization. Example: Global Composites.com

Revenue models publisher exampleAdvertisingRevenueModel: fees are generated from advertisers in exchange for advertisements.2. SubscriptionRevenueModel: Users are charged a periodic (daily, monthly or annual) fee to subscribe to a service. 3. Transaction FeeRevenueModelA company receives commissions based on volume for enabling or executing transactions. SalesRevenueModel: Wholesalers and retailers of goods and services sell their products online. 5. AffiliateRevenueModel: The affiliate program is an online distribution solution which is based on the principle of commission. Merchants advertise and sell their products and services through links to partner-websites.

Review Questions1. Define E Business environments?2. What are Micro and Micro Environments?3. Define market channel structure.4. Define the terms Reintermediation, Disintermediation and Countermediation.5. Define Portals and what are its benefits?6. What are different types of portals?7. Define business models.8. Define Revenue model with example.

Unit - IIIE-Business Infrastructure

E-business infrastructureThe architecture of hardware, software, content, and data used to deliver e-business services to employees, customers and partner

A five-layer model of e-business infrastructure

Components of E BusinessWeb Hosting- Aweb hosting serviceis a type ofInternet hosting servicethat allows individuals and organizations to make theirwebsiteaccessible via theWorld Wide Web. Domain Name Services including website name registration, website forwarding, providing multiple email accounts and domain name protection services. Storage and Backup of the website and files including databases and email lists. Server Speed and Reliability of the website is important as people are accessing your business website from computers around the world.Management Information Web hosting companies should provide access to real-time website traffic statistics which will allow your business to evaluate and monitor the number of visitors, time spent viewing and which country the visitors originate from. Security Webhosting companies have systems and processes in place which reduce the risk of a security breach on your website (such as viruses and hackers).

Internet and Web ApplicationsAn electronic communications network that connects computer networks and organizational computer to share information.

E-mail and instant messagingInstant messaging: a method that allows two or more individuals to communicate online using the InternetInternet cell phones and handheld computersCareer information and job searchingTelnet and FTPTelnet: a terminal emulation protocol that enables users to log on to other computers on the Internet to gain access to public filesFile Transfer Protocol (FTP): a protocol that describes a file transfer process between a host and a remote computer and allows users to copy files from one computer to anotherWeb log (blog): a Web site that people can create and use to write about their observations, experiences, and feelings on a wide range of topics

Usenet and newsgroupsUsenet: a system closely allied with the Internet that uses e-mail to provide a centralized news service; a protocol that describes how groups of messages can be stored on and sent between computersNewsgroups: online discussion groups that focus on specific topicsChat room: a facility that enables two or more people to engage in interactive conversations over the InternetInternet phone and videoconferencing services

IntranetA privately maintained computer network that can be accessed only by authorized persons, especially members or employees of the organization that owns it. Uses of IntranetUsed for internal marketing communicationStaff phone directoriesStaff procedureInformation such as product specification, discount prices, stocking levels and factory schedules.Training course

ExtranetA network based on Web technologies that links selected resources of a companys intranet with its customers, suppliers, or other business partners.Extending an intranet beyond a company to customers, suppliers and collaborators.Used extensively to support supply chain management as resources are ordered from supplies and transformed into products and services delivered to customers

Relationship between intranets, extranets and the Internet

URLs and domain namesURL a web address used to locate a web page on the web serverWeb addresses are structured in a standard way as followshttp://www.domain-name.extension/filename.html

Managing e-Business InfrastructureManagement of e-Business application infrastructure is concern in delivering the right applications to all users of e-business services.

Application Server ProviderAnapplication service provider (ASP)is a business that provides computer-based services to customers over a network.

AdvantagesShort time to deploy new applicationsNo in-house staff or capital costsPredictable cost

DisadvantagesPerformanceSecurity outagesSecurity fearsTransfer of data and ownership of applications if the ASP relationship fails

Electronic data interchange (EDI) EDI is the controlled transfer of data between business and organisations via established security standards.AdvantagesFaster fulfillment of orders, less time in placing and receiving ordersFewer errors in data entry and less time spent by the buyer and supplierReduce cost resulting from reduced staff time and material saving and improve inventory controlCompliance with customer needs Limitations 1. High costs 2. Limited accessibility 3. Rigid requirements Disadvantages:EDI do not respond to change in working principle of an organizationLess transparent than paper-based systems. In EDI acknowledgement is not received.

Unit - IV

Supply chain management (SCM) The coordination of all supply activities of an organization from its suppliers and partners to its customers

Changes in the supply chain

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Logistics: 'Logistics is the time-related positioning of resource, or the strategic management of the total supply-chain.

Inbound logistics: the management of material resources entering an organization from its suppliers and other partners.

Outbound logistics: the management of material resources supplied from an organization to its customers and intermediaries such as retailers and distributors

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What is the value chain?Value Chain a model that considers how supply chain activities can add value to products and services delivered to the customers.

What is e-procurement?It refers to the purchase of goods electronically.

Benefits of e-procurement.- Direct cost reductions. - Process efficiencies. - Reduce the cost of physical materials. - The cycle time between order and use of supplies can be reduced. - E-procurement remove administrative tasks such as placing orders and reconciling deliveries.

Risks and impacts of e-procurement-Security concerns and lack of faith in trading partners are the most significant factors holding back e-procurement.

-The biggest barrier to automation of e-procurement is integration with existing financial systems

E-BankingA method of banking in which the customer conducts transactions electronically via the Internet.

What is an electronic payment system? Why is it important? The definition of an electronic payment system is a way of paying for a goods or services electronically, instead of using cash or a check, in person or by mail.

What is e-tailing?E-tailing (or electronic retailing) is the selling of retail goods on the Internet. It is the most common form of business-to-consumer (B2C) transaction.

What is online publishing? What are its most common applications?Online publishing is the process of using computer and specific types of software to combine text and graphics to produce Web-based documents such as newsletters, online magazines and databases, brochures and other promotional materials, books, and the like, with the Internet as a medium for publication.

FirewallsA method of preventing unauthorized access between a companys computers and the Internet (looks at the header of a packet). A system designed to prevent unauthorized access to or from a private network.