E-Business Professor Linda A Macaulay

Manchester Business School Professor L.A. Macaulay 2 Overview Module Objectives Introductions & Questions PART 1: definitions, models & infrastructure PART 2: environmental factors Group discussion Preparation for next week

Manchester Business School Professor L.A. Macaulay 3 Module objectives To investigate state of the art in e- Business from both a theoretical and practical standpoint To examine a range of e-Business models focussing on how they interact with each other in supporting the various business activities To examine e-Business solutions and how they affect Business to Business and Business to Consumer applications To examine the emerging patterns for e- Business

Manchester Business School Professor L.A. Macaulay 4 Today’s objectives To get to know each other! To introduce some key background factors associated with e-business –Models –Infrastructure –Environment –SMEs –Business issues To explain module structure

Manchester Business School Professor L.A. Macaulay 5 Introductions –To each other –Name, where from, which programme you are on, why you are interested in e- business –Any questions so far?

Manchester Business School Professor L.A. Macaulay 6 PART 1: definitions, models and infrastructure The definition of Electronic Commerce from the European Union web site, 1997, ( Electronic Commerce is a general concept covering any form of business transaction of information exchange executed using information communication technology, A definition of e-business by IBM ( E-business is the transformation of key business processes through the use of Internet technologies E-commerce can be viewed as a subset of e-business

Manchester Business School Professor L.A. Macaulay 7 E-business: Interdisciplinary with many options Interdisciplinary Nature MarketingAccounting & Auditing Computer SciencesManagement Consumer behaviour & psychologyMIS FinanceBusiness Law & Ethics EconomicsOthers Options for trading between business and consumer –B2C – retail to consumers –B2B – interorganisational –C2C – consumer interactions e.g. auctions –C2B – customer makes offers to business e.g. Priceline

Manchester Business School Professor L.A. Macaulay 8 “Accept” the Promise Electronic Servicescape “Keep” the Promise Order Fulfillment “Make” the Promise Advertising Marketing Sales A conceptual framework positioning e-commerce within a ‘promise model’ ( Wanninger, Bled e-Commerce conference,1998)

Manchester Business School Professor L.A. Macaulay 9 Definition of Target Market, Product, Channels Communication to the Customer, Creative Media Mix Accept the Promise Make the Promise Returns & Customer Service Production, Inventory Management Receive Order, Assemble, Pack, Deliver Procurement, Suppliers Accounting, Invoicing, Payables, Receivables Payment Processes Keep the Promise Information Systems, Analytical Tools, Customer & Operations Databases Electronic Servicescape The ‘promise model’ extended Customer

Manchester Business School Professor L.A. Macaulay 10 ) Innovation and Emerging Business Models, Paul Timmers (see paper enclosed)

Manchester Business School Professor L.A. Macaulay 11 E-business models in detail E-shop – marketing of a company or shop Promotion, cost reduction, additional outlet E-procurement – electronic tendering and procurement of goods and services E-auction – can be C2C e.g. or B2C e.g. Electronic bidding, no need for prior movement of goods or participants E-mall – a collection of e-shops Visits to “neighbouring shops”, aggregation of internet services ( 3 rd party marketplace Common marketing front-end and transactions to support multiple businesses (e.g.

Manchester Business School Professor L.A. Macaulay 12 Class question What new models have emerged in the past five years…

Manchester Business School Professor L.A. Macaulay 13 New business models..last year’s students… E-learning E-government Search engines Lots of business models integrated within one website e.g. Amazon, eBay E-shop has changed: services now available for individuals and small business within eBay ASP provide wider range of services E-shop now more customization, e-malls obsolete would use search instead E-auction more ‘user friendly’ more accessible Groupware tools extend a range of business models Virtual communities: now more functional and can combine with business –Issues: security of personal data –Who are you talking to online? –Could reduce social interaction Product customization (e.g. design own shoes) E-Entertainment M-commerce More online advertising for websites, growth of trust services, digital certificates leading to popularity of e-banking Change in technology e.g.data mining, profiling, need to make things more difficult for hackers Security now a major issue Improved banking Efficiency

Manchester Business School Professor L.A. Macaulay 14 Further e-business models Virtual communities can be B2C communities e.g. or B2B e.g. Collaboration platforms – enable collaboration between business or individuals e.g. Value chain integrators – offer a range of services across the value-chain Value-chain service providers – specialise in providing functions for a specific part of a value chain e.g. logistics company Information Brokerage – providing information e.g. to assist in buying decisions or for business operations Trust services – authenticate the quality of service provided by companies trading on the web e.g. or www. Truste.org

Manchester Business School Professor L.A. Macaulay 15 Internet infrastructure components Physical and network infrastructure components of the Internet (Chaffey)

Manchester Business School Professor L.A. Macaulay 16 Information exchange between a web browser and web server Information exchange between a web browser and web server (Chaffey)

Manchester Business School Professor L.A. Macaulay 17 E-business infrastructure A five-layer model of e-business infrastructure (Chaffey)

Manchester Business School Professor L.A. Macaulay 18 Activity What other factors/issues affect e- business beyond technology and management? Talk in pairs and identify two or three factors/issues

Manchester Business School Professor L.A. Macaulay 19 PART2: Environmental Factors Environmental factors affecting e-business –Social Access to and use of e-business Ethical issues –Legal –Economic/Political –Technological

Manchester Business School Professor L.A. Macaulay 20 Social: Ethical issues and data protection Ethical Trading UK Data Protection Act

Manchester Business School Professor L.A. Macaulay 21 Fair Adequate Transfer Accuracy Rights Specific Retention Security FAR STARS

Manchester Business School Professor L.A. Macaulay 22 The 8 Principles are informed by the Act…. F air and honest account of why you want the data A dequate collection: obtain enough and no more R ights to know what is held about them S pecific purpose for which it was collected T ransfer of personal data is regulated A ccuracy must be maintained at all times R etention must be justified on the basis of need S ecurity of systems for processing and secure procedures for using

Manchester Business School Professor L.A. Macaulay 23 Social: Information flows for data protection Information flows that need to be understood for compliance with data protection legislation (Chaffey)

Manchester Business School Professor L.A. Macaulay 24 Legal: Sparrow’s eight areas of concern for e-business 1.Marketing your e-commerce business 2.Forming an electronic contract 3.Making and accepting payment 4.Authenticating contracts concluded over the Internet 5. risks 6.Protecting intellectual property 7.Advertising on the Internet 8.Data protection

Manchester Business School Professor L.A. Macaulay 25 Economic / Political Ensuring companies competitive –Funding for education and technology: –Promoting new technology e.g. goals for broadband provision within countries Achieving government efficiencies –E-government – all UK services online –Singapore ‘Intelligent Island’ Taxation regimes –Legislation for offshore trading

Manchester Business School Professor L.A. Macaulay 26 E-economy framework A framework describing the e-economy (Chaffey) Source: Booz Allen Hamilton (2002). Copyright © Crown copyright 2002, Crown copyright material is reproduced with the permission of the Controller of HMSO.

Manchester Business School Professor L.A. Macaulay 27 Leaders and laggards in e-commerce Leaders and laggards in e-commerce (Chaffey) (economic/political) Source: © 2003 Reproduced by permission of the Economist Intelligence Unit. E-readiness Rankings 2003

Manchester Business School Professor L.A. Macaulay 28 Technological issues Rate of change –Which new technologies should we adopt? Monitoring for new techniques Evaluation – are we early adopter? Re-skilling and training Are our systems secure?

Manchester Business School Professor L.A. Macaulay 29 Group Discussion Discuss your experiences as a user and as a developer of e-business systems What are the key problems facing e- business? Plan –5 mins introductions –30-40 mins discussion –15 mins feedback

Manchester Business School Professor L.A. Macaulay 30 Key problems 1 Security User friendly interface Limited bank services Lack of international credit cards Cash oriented society Product oriented not services English language oriented website International laws for tansactions Laws governing activity e.g. gambling Lack of face to face contact/trust

Manchester Business School Professor L.A. Macaulay 31 Key issues 2 Non e-literate users Research online but buying locally Cost barrier to accessing the internet Price oriented competition Delivery is slow Accessibility for blind or other disadvantaged Difficult for small business without a brand name

Manchester Business School Professor L.A. Macaulay 32 Key issues 3 Delivery and after sales services Data protection Fake websites and security Usability Need a business platform that can run on every platform Compatibility Just in time supply chain How to move your existing business to and e-business

Manchester Business School Professor L.A. Macaulay 33 Summary Reading for next week Timmers paper on e-Business Models Did we meet our objectives?