E-Commerce Strategies Kelly Halbert Verizon E-Business Group December 2000

Definition: E-Commerce Any business transaction that takes place via digital processes over a network

History of E-Commerce 1969 ARPANET 1970s Bitnet and Usenet 1970s Electronic Funds Transfer 1980s EDI 1980s Business Commerce 1992 World Wide Web 2000 E-Commerce is Expanding Exponentially

Types of E-Commerce Business-to-Business Business-to-Consumer

Why E-Commerce? Everyone else is doing it Direct-to-Consumer On-line companies perceived as aggressive Customer Satisfaction

E-Commerce Forces Customer Forces Technological Forces Economic Forces

Business Imperatives Lower Costs Increased Revenues Increased Speed of Transactions Reduced Inventory Levels

Benefits of E-Commerce Manage Supply and Value Chains Buy and Sell Products on the Internet Automates business transactions. Cuts customer service cost and improves the quality of service.

E-Biz Model Virtual Companies Automated Supply and Value Chains Internal Value Chain

B-B Supply Chain

Internal Value Chain

Infonomics New World Economy Information

E-Commerce Obstacles

How are Businesses using E-Commerce? Product Catalogs and Online Buying Purchase Orders Logistics Control Customer Service Call Centers

Transactions and Functions EDI – Electronic Data Interchange EFT – Electronic Funds Transfer Purchases Marketing Customer Service Inventory Intranet

Key Components of a Digital Nervous System Hardware Software People Data Procedures

Hardware Servers Routers Bridges Hubs Switches Gateways

Software Web Server Software Transaction Server Software Browser Security

E-Commerce Architecture

Myths Cheap, Easy, and Lucrative Everyone is Doing It Middlemen are Eliminated All Products become Commodities

Risk Management Project Related Risks Technical Risks Business Risks

Risk Management Alternatives What are our options and what do those options cost? What is the risk of not doing something? Outsourcing vs. Insourcing Is the technology proven or new?

Top 10 E-Commerce Failure Risks Project has unclear mission statement. Project does not have a clear business case. Project specifications are vague. Project is due to be delivered in one big chunk. Project team does not have the experience. Some team members are not committed. Project plan does not include time for holidays, vacations, sick days. Project plan includes no knowledge transfer plan for when consultants leave. Project schedule was dictated by management without regard to the amount of work required. Customer, partner, and management expectations are unrealistic.

Cost Promotional Site = $300,000 Transactional Site = 1 to 3 Million The largest cost associated with e-commerce is labor because of IT staffing shortage

Measuring Success Customer Satisfaction Business Partner Satisfaction Number of New Customers Customer Attrition Product Availability

Brand Management Moving from Brick-and-Mortar to the Virtual World Create a cyberbrand that attracts customer loyalty Customer loyalty in cyberspace is much lower than in the real world Customer retention cost are much higher in cyberspace Customer acquisition costs are lower in cyberspace

Internet Innovations Portals – Yahoo! E-Tailing – Amazon Auctions – e-Bay Application Hosting – Application Service Providers

Portals Gateway to the Web Search Tool Links News Advertisers

External Service Providers Internet Service Providers Web Hosting Providers Application Server Providers

Choosing a Partner Trust Culture Reputation and Image Technology Financial Stability

Independent Software Vendors ERP Vendors = SAP, Oracle, Peoplesoft Database Software Manufacturers = Oracle Web Software Co = iFront, Mercado Home Productivity = Intuit, Norton

Technical Standards United Nations Electronic Data Interchange for Administration, Commerce, and Transport (UN/EDIFACT). American National Standards Institute (ANSI)

Tax Issues State Sales Tax Foreign Taxes

Legal Issues Since cyberspace doesnt really exist as a physical place, where should legal issues be resolved. The electronic trail is not treated with the same respect as a paper trail.

Top 10 Benefits Greater market share Reduces administrative cost Streamline business processes Improves relationship between business partners and customers Equal market access for small and large businesses New ways to manage supply and value chains Seamless business operating environment Makes it possible to buy and sell on the Internet Automates business transactions Allows businesses to provide better customer service

Reference Trepper, Charles, E-Commerce Strategies, Microsoft Press, 2000.

Thanks Special Thanks to Chris Jones For His PowerPoint Assistance