mis486- electronic and mobile commerce technologies in the
TRANSCRIPT
MIS486- Electronic and Mobile Commerce Technologies in the New Era
What is E-Commerce?Business Perspective
• Commerce is all about buying and selling.• Everything has two prices:
• In the difference lies all of human commerceBuy Low
Sell High
$ Markup $
What is E-Commerce?
• Initial Definition (c.1998): E-Commerce - The application of information technologies to enable commercial transactions between two parties.
The Internet
Why has E-Commerce become so important?
• E-Commerce has evolved to mean more than just buying and selling.– Info sharing (Web catalogues, ads, communities)
– Ordering (e-mail, e-forms)
– Payment (traditional, credit cards, EDI, digital cash) – Fulfillment (Web-site, e-mail, fax, phone)
– Service & support (Web notes, FAQs, bulletin boards, e-mail)
Why has E-Commerce become so important?
The Driving Force The Internet Economy• To reach 50,000,000 users
– Radio took 38 years– Computers took over 16 years– TV took 13 years– The Internet took 4 years!
• Over 75% of (12.3M)Australian homes now have PCs
Electronic Commerce: The Second Wave
• Electronic commerce (e-commerce)
– Businesses trading with other businesses and internal processes
• Electronic business (e-business)
– Term used interchangeably with e-commerce
– The transformation of key business processes through the use of Internet technologies
Categories of Electronic Commerce
• Five general e-commerce categories:– Business-to-consumer– Business-to-business– Business processes– Consumer-to-consumer– Business-to-government
• Supply management or procurement– Departments are devoted to negotiating purchase
transactions with suppliers
Categories of Electronic Commerce (continued)
• Transaction – An exchange of value
• Business processes– The group of logical, related, and sequential
activities and transactions in which businesses engage
• Telecommuting or telework– Employees log in to company computers through
the Internet instead of traveling to the office
E-Business Models• Storefront – shopping on-line, a business a model where
buyer and seller interact directly. Eg B2C (business-to-consumer) www.more.com, www.ticketmaster.com
• Shopping-cart technology: shopping cart and merchant server (database) – www.amazon.com is a widely recognized example
• Online shopping malls – purchase items from several shops from a mall in 1 transaction – www.mall.com
Auction model
• Place bids in open competition (with or without reserve price)
• In 2000, $3.8 billion spent on person-to-person auctions
• $52 billion was projected to be spent on B2B auctions
• On eBay, people can buy/sell just about anything (http://www.ebay.com/)
Portal model
• Gives visitors the chance to find almost everything they are looking for in 1 place
• Search engines are horizontal portals – provide broad range of topics
• Vertical portals are more specific – offering a great deal of info in a single area of interest.
• Sites: www.hotbot.com, www.about.com, www.altavista.com, www.yahoo.com
Dynamic pricing models
• Customers can name their prices – bargain hunting• Eg www.priceline.com, www.imandi.com• Name-your-price (priceline)• Comparison pricing model – customers can poll to
find out the lowest price – www.bottomdollar.com• Demand-sensitive pricing model – customers to
demand better, faster service at cheaper prices and shopping in groups to get group rate (www.mercata.com)
• www.aol.com - 22 mill users in interactive mode for browsing/email/chatting and downloading
Bartering model
• Offering one item in exchange for another• www.ubarter.com• Other models: rebates, offering free products
and services (www.hsx.com)
B2B
• Buying, selling, partnering, bartering or trading between 2 or more businesses
• Procurement and effective chain management can be difficult and costly.
• www.icgcommerce.com enables transactions on the internet
Other models
• Online trading and lending – securities, stocks (www.etrade.com)
• Getting a loan online (www.eloan.com)• Recruiting on the web eg www.dice.com,
www.guru.com.• Online news services (www.espn.com)• Online travel services
(www.cheaptickets.com)
Other models
• Online entertainment• Online automotive sites• Energy online – energy commodities• Selling brainpower – buy patents and
intellectual property• Online art dealers (www.art.net)• E-learning (www.click2learn.com)
Generic Classification
• Business-to-Business– eg. transactions using EDI, VANs, VPN
• Business-to-Customer – eg. homebanking, stock-trading, on-line reservations, & purchase
• Business-to-Government• Citizen-to-Government• Community (ie. Industry e-commerce)
– eg. Intranets, supply-side e-commerce, demand-side e-business & customer service
The Development and Growth of Electronic Commerce
• Electronic funds transfers (EFTs)
– Also called wire transfers
– Electronic transmissions of account exchange information over private communications networks
• Electronic data interchange (EDI)
– Transmitting computer-readable data in a standard format to another business
The Development and Growth of Electronic Commerce (continued)
• Trading partners
– Businesses that engage in EDI with each other
• Value-added network (VAN)
– Independent firm that offers connection and transaction-forwarding services to buyers and sellers engaged in EDI
Why has E-Commerce become so important?
The Canadian Statistics
• Over 75% of (12.3M)Canadian homes now have PCs• Over 55% (6.7M) of those are Internet connected, up 51% over 2002• 64% regularly go online from home or work (2003), 5% gain over 2002
(but note that it is slowing down: 19% growth in 2000, 24% growth in 2001))
• 12% buy regularly over web, 38% have bought (2002)• 38% download music• 58% bank from home via the web• 64% of wired households use boardband (highpeed, non dial-up)
The Internet Economy Business Growth
297,000 small businesses(30% of total)
77,000 medium businesses(50% of tota l)
6,000 large businesses(100% of total)
100
1996 20001998
80
60
40
20
Businesses(thousands)
300
Companies connecting
Source:Forrester
The Internet Economy Global Forecast
$3.2T
$1,000
$2,000
$3,000
0
Sales (billions)
1998 1999 2000 2001 2002 2003
$80 $170 $390 $970 $2,000 $3,200Source: Forrester
Hyper-growth begins
$150B
1998 – 111M users2000 – 320M users2005 – 720M users
E-Commerce & E-Business
• E-Business is defined as the process of using electronic technology to do business
• E-Commerce can be defined as a subset of
E-Business, and is the subset of E-Business that focuses on commerce
Business Models, Revenue Models, and Business Processes
• Business model
– A set of processes that combine to yield a profit
• Revenue model
– A specific collection of business processes used to:
• Identify customers
• Market to those customers
• Generate sales to those customers
The Emergence of E-Business
EnterpriseResourcePlanning
SupplyChain
Management
CustomerRelationshipManagement
SellingChain
Management
ProcurementManagement
KnowledgeManagement
SuppliersServices
CustomersDistributersCustomers
Partners
GovernmentAgentsPartners
So Where’sthe E-Commerce?
The Sea of “E-”
• “E-” or “e-” has been added to the almost everything
• E-mail• E-procurement• E-care• E-government• E-learning• others …
Recently we have started to see the same with “M-” or “m-”.
M-Commerce
• M-Commerce is E-Commerce over wireless communications and typically to smaller handheld devices
• August, 2000 – DataMonitor predicted that the market for wireless E-Commerce solutions in the U.S. would grow 1000% by year 2005
• $1.2 billion US annually
The Benefits of E-Commerce
• Opens new markets• Shortens business cycles• Reduces processing/paperwork• Extends reach beyond physical outlets• Permits customized products/service
Limitations of E-Commerce
• Customer authentication• Web-site navigation• Web differentiation• Integration of Internet with other customer
service channels (telephone, counter, kiosk, etc.)
Language Issues
• To do business effectively in other cultures a business must adapt to those cultures
• Researchers have found that customers are more likely to buy products and services from Web sites in their own language
• Localization
– Translation that considers multiple elements of the local environment
Culture Issues
• An important element of business trust is anticipating how the other party to a transaction will act in specific circumstances
• Culture:
– Combination of language and customs
– Varies across national boundaries
– Varies across regions within nations
What Is E-Commerce?Technology Perspective
SQLHTTP
Servlets
HTMLServers
Applets
BrowsersTCP/IP
CGI
Cookies
POP
Database
JSPs
Java
MIMEDW/DM
SMTP
FTP
Authentication
EncryptionWireless PervasiveComputing
Smart Cards
XML
URL
e-Payment SSL
What is E-Commerce?Technology Perspective
Cell-Phone
PDA
Laptop
Desktop
WebApplication
Servers
Data and Transaction
Servers
EdgeServer
The Hardware
The Software
The Skill SetsThe Methods
Summary
• Commerce– Negotiated exchange of goods or services
• Electronic commerce– Application of new technologies to conduct
business more effectively
• First wave of electronic commerce– Ended in 2000
• Second wave of electronic commerce– New approaches to integrating Internet
technologies into business processes
Summary (continued)
• Using electronic commerce, businesses have:– Created new products and services– Improved promotion, marketing, and delivery of
existing offerings
• The global nature of electronic commerce leads to many opportunities and few challenges
• To conduct electronic commerce across international borders, you must understand the trust, cultural, language, and legal issues