Introduction to e-business and e-commerce Chapter 1 Introduction to e-business and e-commerce

Intro Discussion Apa yang ada di benak Anda saat mendengar kata-kata e-commerce? Mengapa Anda mengambil kuliah e-commerce? Apa yang Anda harapkan dari kuliah ini?

Learning outcomes Define the meaning and scope of e-business and e-commerce and their different elements Summarize the main reasons for adoption of e-commerce and e- business and barriers that may restrict adoption Use resources to define the extent of adoption of the Internet as a communications medium for consumers and businesses Outline the business challenges of introducing e-business and e- commerce to an organization.

Management issues How do we explain the scope and implications of e-business and e-commerce to staff? What is the full range of benefits of introducing e-business and what are the risks? How great will the impact of the Internet be on our business? What are the current and predicted adoption levels?

Discussion Siapa yang pernah belanja online? Siapa yang memiliki lapak online?

Internet business opportunities Reach: Over 1 billion users globally Connect to millions of products Compare with marketing/channelling via TV or other media Richness Detailed product information on 20 billion + pages indexed by Google. Blogs, videos, feeds… Personalised messages for users Interaction Affiliation Partnerships are key in the networked economy

The impact of the Internet on business Andy Grove, Chairman of Intel, one of the early adopters of e-commerce, has made a meteorological analogy with the Internet. He says: The Internet a typhoon force, a ten times force, or is it a bit of wind? Or is it a force that fundamentally alters our business? (Grove, 1996)

E-business risks Making wrong decision about e-business investments Wrong market approach Issues regarding e-business implementation Provide poor online customer experience

Internet risks – what can go wrong with a transactional site? Web sites that fail because of spike in visitor traffic Hacker penetrating the security of the system A company emails customer without receiving their permission Problems with fulfilment E-mail customer-service enquiries from the web site don’t reach the right person

E-commerce Definition E-commerce: All electronically mediated information exchanges between an organization and its external stakeholder Not solely restricted to the actual buying and selling of products, but also includes pre-sale and post-sale activities

Different perspectives of EC Communication Delivery of information, product/services or payment by electronic means Business process The application of technology towards the automation of business transactions and workflows Service Enabling cost cutting at the same time as increasing the speed and quality of service delivery Online The buying and selling of products and information online

Figure 1.1 The distinction between buy-side and sell-side e-commerce

Types of sell-side e-commerce (p 10) Transactional e-commerce sites Bhineka, lazada, dll Services-oriented relationship-building web sites Asuransi, consulting, sekolah Brand-building sites www.nokia.com, Unilever Portal or media sites www.yahoo.com

Figure 1.2 Summary and examples of transaction alternatives between businesses, consumers and governmental organizations

E-government The application of e-commerce technologies to government and public services for citizens and businesses Cover services for: Citizens Suppliers Internal communications

E-business All electronically mediated information exchanges, both within an organization and with external stakeholders supporting the range of business processes E-business concepts: Applied to strategy and operations An adjective to describe businesses that mainly operate online

Figure 1.4 Three definitions of the relationship between e-commerce and e-business

Check Individuals_Internet_2000-2012 Figure 1.5 UK rate of adoption of different digital media Source: MORI Technology Tracker, January 2006. See www.mori.com/technology/techtracker.shtml for latest details

Drivers of consumer Internet adoption Content: Detailed, in depth information about products Customization: personalization (recommendation, alerts) Community: discussion about products & services Convenience: select, purchase and use 24x7 Choice: wider range of products Cost reduction: low cost place of purchase

Barriers of consumer Internet adoption No perceived benefit Lack of trust Security problems Lack of skills Cost

Drivers of business adoption Potential for increased revenue Cost reduction

Figure 1.6 Attitudes to business benefits of online technologies Source: DTI (2002)

Cost/efficiency and competitiveness drivers Cost/efficiency drivers Increasing speed with which supplies can be obtained Increasing speed with which goods can be dispatched Reduced sales and purchasing costs Reduced operating costs. Competitiveness drivers Customer demand Improving the range and quality of services offered Avoid losing market share to businesses already using e-commerce. Dispatch = mengirimkan

Tangible and intangible benefits  Increased sales from new sales leads giving rise to increased revenue from: – new customers, new markets – existing customers (repeat-selling) – existing customers (cross-selling).  Marketing cost reductions from: – reduced time in customer service – online sales – reduced printing and distribution costs of marketing communications.  Supply-chain cost reductions from: – reduced levels of inventory – increased competition from suppliers – shorter cycle time in ordering.  Administrative cost reductions from more efficient routine business processes such as recruitment, invoice payment and holiday authorization.  Corporate image communication  Enhancement of brand  More rapid, more responsive marketing communications including PR  Faster product development lifecycle enabling faster response to market needs  Improved customer service  Learning for the future  Meeting customer expectations to have a web site  Identifying new partners, supporting existing partners better  Better management of marketing information and customer information  Feedback from customers on products

Figure 1.8 Adoption of Internet and e-business services across Europe Source: Eurostat, Community Survey on ICT usage in enterprises, eEurope (2005) Information Society Benchmarking Report, © European Communities 2005, http://europa.eu.int/information_society

Barriers to adoption Business are not using Internet for particular e- business applications

Figure 1.9 Barriers to development of online technologies Source: DTI (2002)

Figure 1.10 The McKinsey 7S framework Source: Adapted from Waterman et al. (1980)

Topics for Mid Exam Pengenalan e-business dan e-commerce Fundamental e-commerce Infrastruktur e-business E-environment Strategi e-business E-procurement E-marketing

Topics for Final Exam Supply Chain Management Customer Relationship Management Change Management Analisis dan Pemodelan Data Desain e-Business Implementasi dan Pemeliharaan

Exercise Please identify one company for each the types of e-commerce below: Transactional e-commerce sites Services-oriented relationship-building web sites Brand-building sites Portal or media sites Refer to Figure 1.2 and identify a company for each the category provided.

Summary Electronic commerce traditionally refers to electronically mediated buying and selling Sell-side e-commerce involves all electronic business transactions between an organization and its customers, while buy side e-commerce involves transactions between an organization and its suppliers ‘Electronic business’ is a broader term, referring to how technology can benefit all internal business processes and interactions with third parties. This includes buy-side and sell- side e-commerce and the internal value chain

Summary The monetary value of e-commerce for business- to-business (B2B) transactions greatly exceeds that for business-to-consumer transactions (B2C) The main business drivers for introducing e- commerce and e-business are opportunities for increased revenues and reducing costs, but many other benefits can be identified that improve customer service and corporate image

Summary Consumer adoption of the Internet is limited by lack of imperative, cost of access and security fears. Business adoption tends to be restricted by perceptions of cost, making return on investment difficult to quantify Introducing new technology is not all that is required for success in introducing e-commerce and business. Clearly defined objectives, creating the right culture for change, mix of skills, partnerships and organizational structure are arguably more important

Tugas Halaman 22-23, North West Supplies