Chapter 3 BDIS

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Business Driven Information Systems 2e
CHAPTER 3 EBUSINESS
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E-business - Introduction

• E-business the conducting of business on the
  Internet, not only buying selling, but also
  serving customers and collaborating with
  suppliers
• E-business is based on the Internet, which is
  considered to be a disruptive technology

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Disruptive versus Sustaining Technology

• Disruptive technology a new way of doing things
  that initially may not/does not meet the needs of
  existing customers
• Sustaining technology produces an improved
  product customers are eager to buy

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Disruptive versus Sustaining Technology

• Digital Darwinism implies that organizations
  which cannot adapt to the new demands placed on
  them for surviving in the information age are
  doomed to extinction

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Disruptive versus Sustaining Technology

• Innovators Dilemma - discusses how established
  companies can take advantage of disruptive
  technologies without hindering existing
  relationships with customers, partners, and
  stakeholders

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Disruptive versus Sustaining Technology
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The Internet Business Disruption

• One of the biggest forces changing business is
  the Internet
• Organizations must be able to transform as
  markets, economic environments, and technologies
  change
• Focusing on the unexpected allows an organization
  to capitalize on the opportunity for new business
  growth from a disruptive technology

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The Internet Business Disruption

• The Internet has had an impact on almost every
  industry including
• Travel
• Entertainment
• Electronics
• Financial services
• Retail
• Automobiles
• Education and training
• Many others .

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EVOLUTION OF THE INTERNET

• Internet a global public network of computer
  networks that pass information from one to
  another using common computer protocols
• Protocol a set of standards that specify the
  format of data as well as the rules to be
  followed during transmission

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EVOLUTION OF THE INTERNET

• The Internet began as an emergency military
  communications system operated by the Department
  of Defense

• ARPANET (Advanced Research Project Agency
  Network)
• Created in the 1960s by DARPA (Defense Advance
  Research Projects Agency)
• Used by government and universities as a means of
  communicating for research purposes

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EVOLUTION OF THE INTERNET

• Gradually the Internet moved from a military
  pipeline to a communication tool for scientists
  to businesses
• NSFNET (National Science Foundation Network) was
  created in 1986 by the National Science
  Foundation for connecting research institutions
• Connected to ARPANET and many others (BITNET,
  CSNET, etc) to become a major component of the
  Internet

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EVOLUTION OF THE INTERNET

• No one party operates the Internet
• Ongoing support comes from many universities,
  federal and state governments, and national
  international research institutions and industry
• IETF
• IAB
• IESG
• CCIRN
• ISOC
• IANA

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Evolution of the World Wide Web

• World Wide Web (WWW) a global hypertext system
  that uses the Internet as its transport mechanism
• Hypertext transport protocol (HTTP) the
  Internet standard that supports the exchange of
  information on the WWW

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Evolution of the World Wide Web
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Evolution of the World Wide Web

• The Internets impact on information
• Easy to compile
• Increased richness
• Increased reach
• Improved content

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Evolution of the World Wide Web

• The Internet makes it possible to perform
  business in ways not previously imaginable
• It can also cause a digital divide
• Digital divide when those with access to
  technology have great advantages over those
  without access to technology

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WEB 2.0

• Web 2.0 - a set of economic, social, and
  technology trends that collectively form the
  basis for the next generation of the Internet

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Mashups

• Web mashup - a website or web application that
  uses content from more than one source to create
  a completely new service mixing and matching SW
  from different sources

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THE FUTURE WEB 3.0

• The continuing evolution of web usage and
  interaction including
• Transforming the web into a database
• Providing a path or platform for artificial
  intelligence
• Evolution toward 3D

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ACCESSING INTERNET INFORMATION

• Four tools for accessing Internet information
• Intranet
• Extranet
• Portal
• Kiosk

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ACCESSING INTERNET INFORMATION

• Intranet
• internalized portion of the Internet, protected
  from outside access, for employees
• internal, private network using Web technologies
  to securely transmit information within the
  organization.
• limits viewing access to authorized users within
  the organization

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ACCESSING INTERNET INFORMATION

• Intranet Benefits
• Improved information access to authorized users
• Improved timeliness and accuracy of information
• Global reach allowing employees access from
  anywhere
• Cross-platform integration
• Low cost deployment of information

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ACCESSING INTERNET INFORMATION

• Extranet
• A part of your intranet that is available to
  strategic allies
• a secure network that provides customers,
  suppliers, partners with access to internal
  systems/selected resources of the companys
  intranet
• Built using web technology

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ACCESSING INTERNET INFORMATION

• Extranet Benefits
• Improves timeliness and accuracy of
  communications, reducing errors and
  misunderstandings
• Allows central management of documents and data
  allowing single updates which are then available
  to all interested parties
• Uses standard web protocols allowing disparate
  computing platforms to communicate without
  additional investments
• Easy to use, requires little training
• Used to automate transactions, reducing cost and
  cycle time

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ACCESSING INTERNET INFORMATION

• Portal
• Web site that offers a broad array of resources
  and services
• provides a single point of access for information
  that comes from a variety of different systems
• Benefits include faster access for users and
  reduced maintenance costs

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ACCESSING INTERNET INFORMATION

• Kiosk
• A publicly accessible computer system that allows
  interactive information browsing
• Include user-friendly, simple navigation tools

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PROVIDING INTERNET INFORMATION

• Three common forms of service providers
• Internet service provider (ISP) provides
  individuals and other companies access to the
  Internet
• Common ISP services can also include
• Web hosting
• Additional Hard-disk storage space
• E-mail

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PROVIDING INTERNET INFORMATION

• Wireless Internet service provider (WISP)

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PROVIDING INTERNET INFORMATION

• Online service provider (OSP) offers an
  extensive array of unique Web services
• Application service provider (ASP) offers
  access over the Internet to systems and related
  services that would otherwise have to be located
  in organizational computers

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PROVIDING INTERNET INFORMATION

• ISPs, OSPs, and ASPs use service level agreements
  (SLA) which define the specific responsibilities
  of the service provider and set the customer
  expectations
• Availability
• Accessibility
• Performance
• Maintenance
• Backup/recovery
• Upgrades

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E-BUSINESS BASICS

• How do e-commerce and e-business differ?
• E-commerce the buying and selling of goods and
  services over the Internet
• E-business the conducting of business on the
  Internet including, not only buying and selling,
  but also serving customers and collaborating with
  business partners

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E-BUSINESS MODELS an approach to conducting
electronic business
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Business-to-Business (B2B)

• Businesses buying from and selling to each other
  over the Internet
• B2B relations tend to be more complex and have
  higher security needs
• Account for 80 of all on-line business
  (E-business)

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Business-to-Business (B2B)

• Electronic marketplace (e-marketplace)
  interactive business communities providing a
  central market or forum where multiple buyers and
  sellers can engage in e-business activities

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Business-to-Business (B2B)

• Electronic marketplaces act as intermediaries
• Intermediaries agents, software, or businesses
  that bring buyers and sellers together that
  provide a trading infrastructure to enhance
  e-business
• Reintermediation using the Internet to
  reassemble buyers, sellers, and other partners in
  a traditional supply chain in new ways

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Business-to-Consumer (B2C)

• B2C refers to businesses that sell their
  products or services directly to consumers over
  the Internet, often avoiding any intermediaries

Disintermediation - removal of the intermediary
(middleman) in a sale. Companies can sell
directly to customers (retail or wholesale)
without assistance
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B2C Disintermediation
Manufacturer or Service Provider
Intermediary (Middleman)
Customer (Consumer or Business)
Sell Direct - Disintermediation

• Example
• Airlines selling directly to flyers without a
  travel agent or customer service representative

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Business-to-Consumer (B2C)

• Common B2C e-business models include
• e-shop a version of a retail store where
  customers can shop any time without leaving their
  homes (also called e-store, e-tailer, on-line
  store)
• e-mall consists of a number of e-shops it
  serves as a gateway through which a visitor can
  access other e-shops

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http//emallsofamerica.com/
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Business-to-Consumer (B2C)

• Business types include
• Brick-and-mortar business
• Click-and-mortar business
• Pure-play business (also called .coms, clicks
  only, or virtual)

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Consumer-to-Business (C2B)

• C2B any consumer that sells a product or
  service to a business over the Internet
• Priceline.com is an example of a C2B e-business
  model
• The demand for C2B e-business will increase over
  the next few years due to customers desire for
  greater convenience and lower prices

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Pricing

• B2C usually uses menu-driven pricing companies
  set the price that consumers pay
• C2B more likely to use reverse pricing
  customers specify the price they are willing to
  pay the business can accept or reject it

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Consumer-to-Consumer (C2C)

• C2C sites primarily offering goods and services
  to assist consumers interacting with each other
  over the Internet
• Often utilize on-line auctions
• Forward auction - Sellers use the site as a
  selling channel to many buyers and the highest
  bid wins
• Reverse auction - Buyers use the site to purchase
  a product or service, selecting the seller with
  the lowest bid

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Consumer-to-Consumer (C2C)

• C2C Communities
• Communities of interest - People interact with
  each other on specific topics, such as golfing
  and stamp collecting
• Communities of relations - People come together
  to share certain life experiences, such as cancer
  patients, senior citizens, and car enthusiasts
• Communities of fantasy - People participate in
  imaginary environments, such as fantasy football
  teams and playing one-on-one with Michael Jordan

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ORGANIZATIONAL STRATEGIES FOR E-BUSINESS

• Typical business areas taking advantage of
  e-business include
• Marketing/sales
• Financial services
• Procurement
• Customer service

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Marketing/Sales

• Generating revenue on the Internet
• Online ad (banner ad) - box running across a Web
  page that contains advertisements
• Pop-up ad - a small Web page containing an
  advertisement
• Pop-under ad a Pop-up that is not seen until
  the current Web browser screen is closed
• Associate program (affiliate program) -
  businesses generate commissions or royalties
• Viral marketing - a technique that induces Web
  sites or users to pass on a marketing message

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Marketing/Sales

• Generating revenue on the Internet (cont.)
• Mass customization - gives customers the
  opportunity to tailor products or services
• Personalization - occurs when a Web site can
  fashion offers that are more likely to appeal to
  that person
• Blog - Web site in which items are posted on a
  regular basis and displayed in reverse
  chronological order
• Real simple syndications (RSS) - a Web feed
  format used for Web syndication of content
• Podcasting - the distribution of audio or video
  files, such as radio programs or music videos,
  over the Internet to play on mobile devices

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Marketing/Sales

• Generating revenue on the Internet (cont.)
• Search engine optimization (SEO) - a set of
  methods aimed at improving the ranking of a Web
  site in search engine listings
• Spamdexing - uses a variety of deceptive
  techniques in an attempt to manipulate search
  engine rankings, whereas legitimate SEO focuses
  on building better sites and using honest methods
  of promotion

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Financial Services

• Online consumer payments include
• Credit or debit cards
• Financial cybermediary
• Electronic check
• Electronic bill presentment and payment (EBPP)
• Digital wallet

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Financial Services

• Online business payments usually include some
  form of Electronic data interchange (EDI)
  delivered over a Value Added Network (VAN)
• Financial EDI (financial electronic data
  interchange) is a standard electronic process for
  B2B market purchase payments

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Financial Services

• Electronic trading networks

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Procurement

• E-procurement - the B2B purchase and sale of
  supplies and services over the Internet
• Electronic catalog - presents customers with
  information about goods and services offered for
  sale, bid, or auction on the Internet
• Provide product descriptions, search
  capabilities, special offers, etc.

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Customer Service

• Customer service is the business process where
  the most human contact occurs between a buyer and
  a seller
• E-business activities can be an important part of
  a firms CRM system
• e-business strategists are finding that customer
  service via the Web is one of the most
  challenging and potentially lucrative areas of
  e-business
• A primary issue facing customer service
  departments using e-business is consumer
  protection

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Consumer Protection
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MEASURING E-BUSINESS SUCCESS

• Most companies measure the traffic on a Web site
  as the primary determinant of the Web sites
  success
• However, a large amount of Web site traffic does
  not necessarily equate to large sales
• Many organizations with high Web site traffic
  have low sales volumes

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MEASURING E-BUSINESS SUCCESS

• Web site traffic analysis can include
• Cookie
• Click-through
• Banner ad
• Interactivity
• Interactivity can be determined using
• Clickstream Data

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Web Site Metrics

• Clickstream data - tracks the exact pattern of a
  consumers navigation through a Web site
• Clickstream data can reveal
• Number of pageviews
• Pattern of Web sites visited
• Length of stay on a Web site
• Date and time visited
• Number of customers with shopping carts
• Number of abandoned shopping carts

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E-BUSINESS BENEFITS AND CHALLENGES

• E-business benefits include
• Highly accessible 24/7/365
• Increased customer loyalty
• Improved information content
• Increased convenience
• Increased global reach
• Decreased cost

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E-BUSINESS BENEFITS AND CHALLENGES

• E-business challenges include
• Protecting consumers
• Leveraging existing systems
• Increasing liability
• Providing security
• Adhering to taxation rules

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NEW TRENDS IN E-BUSINESS E-GOVERNMENT

• E-government - involves the use of Internet
  technologies to transform government(s) by
  improving the delivery of services and enhancing
  the quality of interaction between the
  citizen-consumer and the various branches of
  government

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NEW TRENDS IN E-BUSINESS E-GOVERNMENT MODELS

• G2C (Government to Consumer) - government
  services provided on-line to citizens/customers
• Renew drivers licenses, passports, visas,
  Medicare Medicaid benefits, social security, food
  stamps, public service announcements
• C2G (Consumer to Government) consumer initiated
  transactions with government
• Elections/voting, census/demographic information,
  pay taxes

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NEW TRENDS IN E-BUSINESS E-GOVERNMENT MODELS

• G2B (Government to Business) - government
  services to businesses
• Information about regulations, licenses
  import/export/tariff information forms
• B2G (Business to Government) business initiated
  transactions to government
• Filing information with SEC/EEO/IRS, paying
  taxes/fees

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NEW TRENDS IN E-BUSINESS E-GOVERNMENT MODELS

• G2G (Government to Government) governments
  exchanging information
• Local - health department, traffic, crime
• State - state budget information, education,
  Medicaid programs, statewide criminal records,
  transportation
• National - Medicare programs, Social Security,
  transportation, national crime records
• International international trade agreements,
  treaties, immigration information, international
  arms and terrorist information

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NEW TRENDS IN E-BUSINESS E-GOVERNMENT
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NEW TRENDS IN E-BUSINESS Mobile Commerce or
M-COMMERCE

• Mobile commerce - the ability to purchase goods
  and services through a wireless Internet-enabled
  device