GLOBAL ELECTRONIC COMMERCE

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GLOBAL ELECTRONIC COMMERCE
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WHAT IS IT?T h e 2 1 st C e n t u r y
New Technology New Economics New
Business _______________________ New World
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NEW WORLD

• It will change not just how you do it it will
  change what you do!
• Change is not constant it is increasing
• You can not escape or ignore it. Therefore you
  better be prepared
• to deal with it!
• How do you prepare for it?
• Continue to learn and understand
• Understand the possibilities
• Identify the probabilities
• Keep an open, an active mind

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BRIEF HISTORY OF THE EVOLUTIONTOWARD GEC

• 1990
• EDI The Auto Industry, JIT Manufactures
• EDI Integration with MIS enhancing legacy
  systems
• EDI Legal Issues and Concerns
• 1991
• EDI International Standards
• EDI Government taxes, customs, etc.
• EDI Electronic Mail
• EDI Data Interchange

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• 1992
• Global EDI interorganizational system
• Open EDI model - re-engineering EDI with
  standards
• Implementing EDI - not that easy
• EDI in logistics and transportation
• EDI or die
• 1993
• Control and audit of EDI
• Cost benefit analysis of EDI
• Non-proprietary standards - USA Europe
• Bankers SWIFT clearing-house

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BRIEF HISTORY OF THE EVOLUTIONTOWARD GEC

• 1994
• Security
• Firewall protection required
• Global transfer of EDI technology
• Financial EDI in practice
• 1995
• Electronic commerce and trade efficiency
• EDI and the Internet
• Trade facilitation and trade points
• Electronic commerce and concurrent engineering

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• 1996
• Electronic commerce trade efficiency and
  effectiveness
• Leveraging EC for competitive advantage
• Growing applications, reports worldwide
• Merging EDI and the Internet/www
• 1997
• Global business in practice
• Changing the balance of power with GEC
• Health care systems applications
• Interorganizational systems and virtual
  organizations

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BRIEF HISTORY OF THE EVOLUTIONTOWARD GEC

• 1998
• Internet-based (WWW) Electronic commerce
• GEC in the information society
• Electronic payments and digital cash
• Encryption the security solution
• 1999
• Biggest need trust
• What is trust?
• How to get it?

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BRIEF HISTORY OF THE EVOLUTIONTOWARD GEC

• 2000
• Surviving the .com bubble burst
• Renewed focus on profits
• Technology is enabler, people are exploiters

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What is happening now in the evolution
towardGEC?

• Moving from EDI to Internet, still
• Internet is moving from an electronic cow path
  to an electronic
• superhighway
• Moving toward electronic currency
• Key resource moving from capital to information
• Moving from mass production to mass
  customization
• Suppliers and customers becoming partners
• Disintermediation is changing industries and
  markets
• Cybermediaries evolve and disappear
  (Amazon.com) (because GEC
• changes the what not just the how)
• Economies accelerate change worldwide
• Infomediaries make profits

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WHAT ARE WE TALKING ABOUT?DEFINITION OF GLOBAL
ELECTRONICCOMMERCE

• Technology mediated exchanges between
• parties (individuals, organizations, or both)
  as well as the electronically based intra or
  inter organizational activities that facilitate
  such exchanges on a world-wide basis.

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TYPICAL CATEGORIES USED TO DESCRIBEGLOBAL
ELECTRONIC COMMERCE

• ? BUSINESS TO BUSINESS
• ? BUSINESS TO CUSTOMER
• ? CUSTOMER TO CUSTOMER
• ? CUSTOMER TO BUSINESS
• ?
• E-GOVERNMENT
• ? E-EDUCATION
• ? E-BANKING
• ? E-MEDICAL
• ? E-NOUF

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CHARACTERISTICS DIFFERENTIATINGE-COMMERCE FROM
BM COMMERCE

• ? CORE STRATEGIC DECISIONS ARE TECHNOLOGY
• BASED
• ? THE STORE IS ALWAYS OPEN 7/24/365
• ? SPEED OF DECISION MAKING FAST FROM
• MONTHS TO MINUTES
• ? TECHNOLOGY BASED CUSTOMER INTERFACE
• ? THE CUSTOMER CONTROLS THE INTERACTION
• ? KNOWLEDGE OF CUSTOMER BEHAVIOR
• ? THE ECONOMIC MODEL IS NETWORK ECONOMICS
• ? NON-TRADITIONAL PERFORMANCE METRICS AND
• VALUATION MODELS

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WHAT DOES GLOBAL MEAN?

• ?WORLDWIDE MARKETS/CUSTOMERS
• ?YES, BUT
• ?INTERNET IS ALMOST WORLDWIDE
• ? OF PEOPLE IN THE WORLD WHO HAVE USED A
• TELEPHONE
• ?THE LAST MILE PROBLEM IS REAL
• ?CULTURAL DIFFERENCES
• ?ESTABLISHING/MAINTAINING TRUST
• ?WE ARE MOVING (RAPIDLY) TOWARD A GLOBAL
• SYSTEM
• ?BACKBONES
• ?TRANS OCEANIC CABLES
• ?SATELLITE SYSTEMS
• ?NEXT GENERATION INTERNET

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WHAT DOES ELECTRONIC MEAN?

• ? COMPUTERS - CONNECTIVITY
• ? PC STILL DRIVER
• ? MICROCOMPUTERS GROWING
• ? NETWORK MANAGEMENT ROLE
• ? NETWORK REACH
• ? INTERNET/WWW
• ? INTERNET PROTOCOL (IP)
• ? INTRANET/EXTRANET
• ? YOU NEED A PLACE TO PLUG-IN

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Exhibit 1 1 Growth in Number of Internet
UsersE-Commerce is significant in several
respects, first of which is the expected growth
of the online population
US Online Population Forecasts
Population (Millions)

• At the end of 2003 approximately 55 of the US
  population will be online

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Exhibit 1 3 Adoption Rate of the Internet vs.
Other MediumsThe fast growth of the Internet
compared with other media is an indication of the
velocity of how E-commerce is affecting the
nature of economic activity
Internet as Mass Medium North American Adoption
Curves
North American Users / Households (MM)
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Exhibit 1 4 Estimated Savings From
E-CommerceIn addition to the growth in online
population, B2B revenues and Internet adoption,
E-commerce is important for the cost savings it
can generate as well as for its impact on
industry boundaries and on many aspects of the
social life

• Cost savings from e-commerce are expected to
  exceed 1 trillion by the end of year 2002

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WHAT IS COMMERCE?

• ? MUTUAL EXCHANGE (WITH THE HOPE OF
• GAINING VALUE)
• ? FOR BUSINESS A WAY TO MAKE OR SAVE
• MONEY
• ? FOR CUSTOMERS A WAY TO MEET THEIR
• NEEDS/DESIRES
• ? FOR THE WORLD A WAY TO GROW,
• UNDERSTAND AND PERHAPS PEACEFULLY
• CO-EXIST

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SO WHAT ABOUT THE FUTURE OF GEC?

• ? ITS GOING TO GROW
• ? ITS GOING TO BECOME EASIER TO DO
• ? ITS GOING TO BE MORE GLOBAL
• ? IN FIVE YEARS (REMEMBER THIS IS EASY)
• ? GEC WILL BE INDISTINGUISHABLE FROM BUSINESS
• ? THE MOST IMPORTANT CONSUMER/CUSTOMER WILL BE
  GLOBAL TEEN-AGERS
• ? RESISTANCE TO CHANGE (TO GEC) IN BUSINESS AND
  POPULATION WILL BE REDUCED, A LITTLE
• YOU WILL BE ENGAGED IN GEC EVERY DAY

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For Starters Top Ten Lessons from the Dot Com
Meltdown

• Nothing changes overnight
• New stuff doesnt replace old stuff
• Too early to market? Too bad.
• Many startups were fundamentally uncreative and
  un-Internet
• All we, like sheep, will go astray(with enough
  pressure).
• Free is folly
• We used narrowcast to broadcast
• The 50 Million rule can kill
• Its hugely difficult to build chicken and egg
  simultaneously.
• Prediction tools must improve.