E-Business and E-Commerce Part III. Web, Wireless, and Social Media Strategies Chapter 6 E-Business and E-Commerce Course Copyright 2012 John Wiley & Sons, Inc.

Chapter 6 Outline 6.1 e-Business Challenges and Strategies 6.2 Business-to-Consumer (B2C) e-Commerce 6.3 Business-to-Business (B2B) e-Commerce and e-Procurement 6.4 e-Government 6.5 e-Commerce Support Services: Payment & Order Fulfillment 6.6 e-Business Ethics and Legal Issues Copyright 2012 John Wiley & Sons, Inc.

Chapter 6 Learning Objectives Describe e-business strategies and e-commerce operations. Understand effective business-to-consumer e-commerce applications. Understand business-to-business applications, logistics, procurement, order fulfillment, and payment systems. Describe e-government activities and public sector e-commerce. Understand e-commerce support services. Identify and describe ethics and legal issues of e-business. Copyright 2012 John Wiley & Sons, Inc.

6.1 e-Business Challenges and Strategies Mix of online channels & media gives consumers strong control over where and how they interact with a business or brand. Managers need to know how to respond to changing consumer behavior & needs of business customers – and how to deal with IT software vendors and consulting firms. Companies may outsource development or hosting of e-business systems w/ software as a service (SaaS) or cloud computing …but developing an effective e-business model and competitive strategy is done in-house. If the business model and strategy are wrong, then implementation wouldn’t matter in the long-run. Copyright 2012 John Wiley & Sons, Inc.

Figure 6.4. Changes in the Nasdaq during the dot-com era, which burst (started to decline) on March 10, 2000 and declined until October 2002. Dot-com Era, 1995 to 2002 Adding the prefix “e” to “business” did not eliminate the need to focus on positive earnings and cash flow and to earn a profit. Copyright 2012 John Wiley & Sons, Inc.

Types of E-Business Transactions Business-to-business (B2B). Over 85% of EC volume is B2B. Business-to-consumers (B2C). Also called e-tailing. Consumers-to-business (C2B). Consumers make known a particular need for a product or service, and then suppliers compete to provide that product or service at the requested price; e.g., Priceline.com Government-to-citizens (G2C) and to others. A government agency provides services to its citizens via EC technologies. Mobile commerce (m-commerce). Transactions and activities are conducted via wireless networks. Copyright 2012 John Wiley & Sons, Inc.

E-Business Web Site Requirements and Challenges Availability relates to the server-side of e-business. An always on facility is needed to maintain the business critical apps. Accuracy and Quick Response. Web software must be capable of searching, sorting, processing promotions and payments, verifying that the credit card number belongs to the person trying to use it, confirming the purchase in real-time, etc. In time-sensitive B2B, errors that delay delivery are intolerable. Security and PCI DSS Compliance. PCI DSS (Payment Card Industry Data Security Standard) is a set of infosec requirements to help prevent credit card fraud. Integrating EC systems with enterprise systems. Need better integration across all customer points of interactions. Web analytics. Learning from Web traffic and log data. Copyright 2012 John Wiley & Sons, Inc.

PCI Compliance http://www.pcisecuritystandards.org/popups/pcirocks.php PCI Compliance is a complex process that requires every business that deals with payment card numbers in any way to strictly follow a detailed list of regulations. PCI Data Security Standard (PCI DSS): All EC and brick-and- mortar merchants must be PCI DSS compliant to accept, hold, process, or exchange credit cardholder data of major credit cards. http://pcisecuritystandards.org Copyright 2012 John Wiley & Sons, Inc.

E-Business Model Figure 6.6 E-commerce model Objective of e-business: streamline and automate processes Copyright 2012 John Wiley & Sons, Inc.

E-business Models Comparison shopping engines Affiliate marketing Electronic marketplaces and exchanges Information brokers and matching services Memberships Forward auctions Reverse auctions Name-your-own-price Online auctions Online direct marketing. Viral marketing Copyright 2012 John Wiley & Sons, Inc.

6.2 B2C e-Commerce Most well-known B2C site is Amazon.com, whose patented IT developments provide a competitive edge ING Direct, largest online bank with high rates, high-volume, low-margins, and high profits Online job market. Most companies and government agencies advertise job openings, accept résumés, and take applications via the Internet. Despite B2C ongoing growth, many e-tailers still face challenges that interfere with the growth of its e-tailing efforts Copyright 2012 John Wiley & Sons, Inc.

Issues in E-tailing Resolving channel conflict between an online selling channel and physical selling channels Resolving conflicts within click-and-mortar organizations. Managing order fulfillment, logistics, and reverse logistics. Determining viability and risk of online e-tailers. Identifying appropriate revenue (business) models. Copyright 2012 John Wiley & Sons, Inc.

6.3 B2B e-Commerce & e-Procurement comprises about 85% of e-commerce dollar volume. covers apps that enable an enterprise to form electronic relationships with its distributors, resellers, suppliers, customers, and other partners. By using B2B, organizations can restructure their supply chains and partner relationships. Copyright 2012 John Wiley & Sons, Inc.

B2B Business Models Sell-side: Buy-side or e-sourcing: Seller can be either a manufacturer (IBM.com), a distributor (Avnet.com), or a retailer (Walmart.com) Primary methods are forward auctions and online catalogs, which can be customized for each buyer Buy-side or e-sourcing: E-sourcing refers to the many procurement methods. Primary methods are auctions, RFQ processing, and private exchanges Copyright 2012 John Wiley & Sons, Inc.

B2B E-procurement Public and Private Exchanges To control costs To simplify processes to make them more efficient Public and Private Exchanges Vertical exchanges for direct materials—materials that are inputs to manufacturing; e.g., PlasticsNet.com Vertical exchanges for indirect materials in one industry—e.g., ChemConnect.com and iSteelAsia.com Horizontal exchanges for indirect materials, such as office supplies, light bulbs, and cleaning materials used by any industry; e.g., EcEurope.com and Alibaba.com Functional exchanges. Needed services such as temporary help or extra space are traded on an as-needed basis; e.g., Employease.com Copyright 2012 John Wiley & Sons, Inc.

6.4 E-Government E-commerce models apply to government & the public sector E-government is the use of Internet technology to deliver information and public services to citizens, business partners and suppliers of government entities Benefits Improves the efficiency and effectiveness of govn’t functions, including the delivery of public services Increases transparency by giving access to govn’t information Citizens can provide feedback and more actively participate in democratic institutions and processes Copyright 2012 John Wiley & Sons, Inc.

E-Government in the Cloud Budget pressures are a leading factor moving governments into cloud computing solutions 45% of local governments are using some form of cloud computing for applications or services 2 iPhone Apps to Curb Drunk Driving R-U-Buzzed was released by the Colorado DOT to estimate blood-alcohol content Mashup program Stumble Safely gives Washington, D.C., pedestrians a safe route home after a night at the bar. Copyright 2012 John Wiley & Sons, Inc.

6.5 E-Commerce Support Services: Payment and Order Fulfillment B2B and B2C requires support services, e.g., payment and order fulfillment Major e-commerce support services: e-infrastructure: technology consultants, system developers, integrators, hosting, security, wireless, and networks e-processes: payments and logistics e-markets: marketing and advertising e-communities: citizens, audiences and business partners e-services: CRM, PRM, and directory services e-content: supplied by content providers Copyright 2012 John Wiley & Sons, Inc.

Advertising Strategies and Revenue Models Affiliate marketing and advertising: an organization refers consumers to other companies’ Web sites. Viral marketing: word-of-mouth marketing; customers promote a product or service by telling many others about it, often via tweets or texts. Customizing ads: marketing managers can customize display ads based on users’ profiles. Copyright 2012 John Wiley & Sons, Inc.

E-payment systems Electronic funds transfer (EFT) Electronic checks Electronic credit cards Purchasing e-cards e-Cash—smart cards e-Cash—person-to-person Electronic bill presentment and payments Pay at ATMs Micropayments B2B special methods Copyright 2012 John Wiley & Sons, Inc.

Figure 6.10 Sequence of activities in e-credit card processing

IT at Work 6.6 E-Money: The Future Currency The growing e-money lifestyle in Japan is making life more convenient for consumers by allowing transactions via mobiles. The Mobile Suica system was debuted by NTT DoCoMo in 2006. Mobile Suica is a phone-based smartcard that can be used for buying rail tickets or accessing buildings. Figure 6.11 Contactless Mobile Suica on mobile phone; based on RFID Copyright 2012 John Wiley & Sons, Inc.

Order fulfillment activities Figure 6.12 Order fulfillment and logistics system Copyright 2012 John Wiley & Sons, Inc.

6.6 E-Business Ethics and Legal Issues Privacy: Most e-payment systems know who the buyers are; therefore, it’s necessary to protect the buyers’ identities. Web tracking: By using tracking software and log files, companies can track individuals’ movements on the Internet. Job loss: EC may eliminate jobs. Disintermediation: Technology eliminates the need for intermediaries, such as travel and insurance agents. Copyright 2012 John Wiley & Sons, Inc.

Chapter 6 Link Library Amazon.com’s 1st Web site, 1995 digitalenterprise.org/images/amazon.gif e-Business forum ebusinessforum.com Google Merchant Center google.com/merchants Google Product Search google.com/products Shopzilla shopzilla.com U.S. Federal Trade Commission ftc.gov PCI Security Standards Council pcisecuritystandards.org/index.shtml Internet statistics internetworldstats.com Many Eyes (beta) data sets and visualization tools manyeyes.alphaworks.ibm.com/manyeyes/ Washington, DC Data Catalog data.octo.dc.gov/ Copyright 2012 John Wiley & Sons, Inc.