E-Commerce

Prof. Rushen Chahal

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Agenda
What is E-Commerce? Business to Business Business to Customer Business to employee Infrastructure Problems
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What is E-Commerce?

Electronic commerce is the exchange of products, services, information, or money with the support of computers and networks. It is business done online.

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Terminology
From narrowest to broadest:
E-Shopping E-Business E-Commerce E-Economy E-Culture

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Types of E-Commerce
Business to Business
80% of dollar volume $7.29 trillion by 2002

Business to Customer
20% of dollar volume $10 billion by 2002

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Benefits
Improve internal operations Decrease operating expenses Eliminate middlemen

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Internal Operations
Smaller inventory JIT manufacturing Customize products Automatic billing Electronic collections

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Operating expenses
Lower overhead
Location is irrelevant

Eliminate paperwork Reduce cycle time Produce greater variety at the same cost

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Middlemen
Eliminate transfer costs Only used when adding value to product or service
Travel Agent? Stock Broker? Retail Store?

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Amazon.com
On-line book-store
Expanding services

No physical plant No inventory Negative asset intensity

Customer pays for books (which they dont have) up front
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Problems
Data & system incompatibility Privacy Bandwith Cybercrime

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Data & System Incompatibility

Information glut Slow to find anything
No standards No search content consistency

Delivery structure: one to one (customer) not one to many (wholesale)

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Bandwith
Twisted copper wire
Analog

Reverting to
Fiber optics Satellites Digitization

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Cybercrime
Credit cards Electronic money Authentication

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Agenda
What is E-Commerce? Business to Business Business to Customer Business to employee Infrastructure Problems

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Channels
Internet Extranet Private networks Electronic data interchange (EDI)

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Benefits
Internal process Business reengineering Enterprise model Alliance

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Internal Processes
Reduce paper output Improve accuracy Increase throughput
Errorless transactions input per day

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Reengineering
Reduce cycle time
Order to customer receipt

Reduce in labor costs Reduce open accounts-receivable days

Cash flow

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Enterprise Models
Increase productivity Increase cash flow Increase product quality Increase customer service and satisfaction

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Alliances
Increase efficient Increase market share Increase profitability

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Agenda
What is E-Commerce? Business to Business Business to Customer Business to employee Infrastructure Problems
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Uses
Direct sales
Product Service Information

Brand enhancement Cross sales

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Know Youre There

Critical mass Internet customer growth Off Internet advertising
TV commercials Magazines

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Finding You
Gateway ads (AOL) Search engines Portal sites
Major advertisers

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Holding attention
3 click rule Site thickness
Chat rooms Frequent ask question page Dark page Telephone no.

Convenient navigation path

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Return Next Time

Satisfaction with first time Offering something new for next visit

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Attributes of an Offer
S. Davis and C. Meyer, Blur (Warner Books, 1999) Products and services are blending (blurring) Result is an offer Authors list 10 attributes of a successful offer in future
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Offer Attributes
Anytime Real time Online Interactive Anyplace

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Offer Attributes
Learning Anticipating Filtering Customizing Upgrading

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Agenda
What is E-Commerce? Business to Business Business to Customer Business to employee Infrastructure Problems
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Intranet
Usages
E-mail Workflow Education Communication Collaboration

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Benefits
Productivity Cost Knowledge Convenient

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Agenda
What is E-Commerce? Business to Business Business to Customer Business to employee Infrastructure Problems
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Infrastructure
Networks Web servers Supporting tools
Tracking software, database connectivity, electronic form, on-line discussion group, etc.

Internet access components

Protocols, browser

Web page design Transaction processing system

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Agenda
What is E-Commerce? Business to Business Business to Customer Business to Employee Infrastructure Problems

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Problems - Payment
Security Privacy Micropayment Inconvenience Imcompatibility

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Countermeasures
Encryption & decryption Private key & public key Digital signature Electronic certificates Secure electronic transaction protocol (SET)

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Points to Remember
What is E-Commerce? Business to Business Business to Customer Business to Employee Infrastructure Problems

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Discussion Questions
What are the impacts of e-commerce on the issues of human, social, and legal? Does your organization have a ecommerce? What type? What will it take for the general public (or you) to feel reasonably comfortable with using credit cards over the Internet?

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Discussion Questions
What is the future of e-business? What is the future of e-education?

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Assignment
Review technology guides 1,2,4 & chapters 1- 6 Read chapter 7 Exam 1 Group Assignment Research paper

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