Week 11: Electronic Commerce and Crowdsourcing

MIS5001: Management Information SystemsDavid S. McGettigan

Adapted from material by Arnold Kurtz, David Schuff, and Paul Weinberg

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Agenda Prior Lecture Recap

Electronic Commerce

Crowdsourcing

Next Week

Prior Lecture Recap

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Prior Lecture RecapRole of the CIO

Most Time Spent Collaborating with CXOs Making Strategic Decisions Working on Strategic Business Planning

Obstacles to Success Overwhelming Project Backlog and Requests Ability to Execute Remains a Top Concern Focus on Cost Cutting

Opportunities Using IT to Enable / Standardize Business Processes Measuring Success and Proving Business Value

A Modern CIO Deputies Run Operations Focus on Strategy and Execution

Source: www.cio.com: “State of the CIO”

eBusiness

I think the Internet is uniquely suited to this free market idea: that everyone on the Internet that exchanges the traffic back and forth, big or small, we all need each other.

Pete Ashdown, Utah Geek Dinner Speech, 08-22-06founder and CEO of Utah 's first independent and oldest Internet service provider, XMission

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Internet: Features and Business Value

Management Information SystemsManaging the Digital Firm

(Ninth Edition)

Copyright 2006 Prentice HallAll rights reserved

7Management Information Systems

for the Information Age (Fourth Edition)

Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved

Internet: Creation of New Markets

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Business to Consumer (B2C) E-tailer - an Internet retail site.

Pure plays - Internet retailers without a physical store.

Clicks–and-mortar retailers - both an Internet presence and one or more physical stores.

M-commerce - describes e-commerce conducted over a

wireless device such as a cell phone or PDA.

Management Information Systems for the Information Age

(Fourth Edition)

Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved

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B2C - Key Success Factors Product Type

Commodity Digital

Marketing Mix Search Engines Online and Offline Ads

Execution Customer Service

Monitor Competition and Threats Cyveilance Corp

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B2C – CompetitionFord Motor Example

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B2C – ThreatsFord Motor Example

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B2C – Search EnginesFord Motor Example

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B2C – Search EnginesBest Buy Example

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Direct materials - used in production in a manufacturing company or for retail sales.

Indirect materials - necessary for running a corporation, but do not relate to the primary business activities.

Electronic data interchange (EDI) - computer-to-computer transfer of transaction information.

B2B – Corporate Purchasing

Management Information Systems for the Information Age

(Fourth Edition)

Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved

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B2B – Indirect Materials

www.staples.com www.boise.com

What is the difference in these business models?

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B2B - Commerce B2B marketplaces -

Internet-based services that bring together buyers and sellers.

Reverse auction - the process in which a buyer posts its interest in buying a certain quantity of items, and sellers compete for the business by submitting successively lower bids until there is only one seller left.

Management Information Systems for the Information Age

(Fourth Edition)

Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved

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C2C – Classic Example

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C2B – Lesser Known … More Academic

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The Role Of E-Government

E-Government - describes the application of e-commerce technologies in governmental agencies.

Management Information Systems for the Information Age

(Fourth Edition)

Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved

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Learning from the Mistakes of Others Furniture.com closes

doors, lays off most of staff

Pets.com latest high-profile dot-com disaster

Food.com lays off half its staff; execs step down

WebMD to lay off 1,100 workers

The worst crime against working people is a company which fails to operate at a profit.

Samuel Gompers, 1908

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Significant Successes?

Expedia.com – 13% of traditional travel agencies closed down

Dell – pricing below competition with an 8% margin

Lending Tree – growing at 70% per year

WebMD – expanded model to include claim processing

Napster – success or failure?

Source: Business Week: May 12, 2003

The following was the status of well known firms in 2003. Where are they now?

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Crowdsourcing

Crowdsourcing is channeling the experts desire to solve a problem and then freely sharing the answer with everyone.

Henk van Ess (writer / reporter)

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Crowdsourcing Crowdsourcing is the act

of outsourcing tasks, traditionally performed by an employee or contractor, to a large group of people or community (a crowd), through an open call

Benefits: Problems can be explored at comparatively little cost, and often very quickly. Payment is by results or even omitted The organization can tap a wider range of talent than might be present in its

own organization. By listening to the crowd, organizations gain first-hand insight on their

customers' desires. The community may feel a brand-building kinship with the crowdsourcing

organization.

Source: Wikipedia and YourEnccore.com

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Crowdsourcing Drawbacks:

Added costs to bring a project to an acceptable conclusion. Likelihood of failure:

lack of monetary motivation, too few participants, lower quality of work, lack of personal interest in the project, global language barriers, or difficulty managing a large-scale, crowdsourced project.

Difficulties maintaining a working relationship with crowdsourced workers throughout the duration of a project.

Susceptibility to faulty results caused by targeted, malicious work efforts.

Examples: Entertainment (web videos), scientific (problem solving),

academic (wikipedia)Source: Wikipedia and YourEnccore.com

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TopCoder Describe the basic business model of

TopCoder.

Compare and contrast the TopCoder software development process to traditional software development methods. When would you use which?

How can other firms apply design principles of the TopCoder process to other domains?

Next Week

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