Creating a Winning E-Business Second Edition Understanding E-Business Chapter 1

Creating a Winning E-Business Second Edition, Chapter 1 Learning Objectives Discuss e-business basics Describe the Internet and World Wide Web Discuss the role of e-business in the global economy List e-business advantages and disadvantages Creating a Winning E-Business Second Edition, Chapter 1

Learning Objectives (continued) Explain e-business value chains and value activities Identify e-business models Creating a Winning E-Business Second Edition, Chapter 1

Creating a Winning E-Business Second Edition, Chapter 1 E-Business Basics E-commerce – Process of buying or selling goods or services across a telecommunications network E-business – Widest spectrum of business activities using Internet and Web technologies Many technologies facilitate e-business Electronic funds transfer (EFT) Electronic data interchange (EDI) Internet / World Wide Web Creating a Winning E-Business Second Edition, Chapter 1

The Internet and World Wide Web Network Group of two or more computers Linked by communication media Cable Telephone lines Wireless connections Networks servers Give users access to shared network resources Printers, files, telecommunication lines Creating a Winning E-Business Second Edition, Chapter 1

The Internet and World Wide Web (continued) Creating a Winning E-Business Second Edition, Chapter 1

The Internet and World Wide Web (continued) A worldwide public network that connects private networks Originated in the late 1960s as ARPANET Managed by the National Science Foundation in the 1980s and early 1990s as NSFnet Connected colleges, universities, and research centers Commercial activity was prohibited until 1991 Creating a Winning E-Business Second Edition, Chapter 1

The Internet and World Wide Web (continued) Internet (continued) Replaced by commercial high-speed telecommunications backbones in 1995 Individuals and SMBs connect via an Internet Service Provider (ISP) Large businesses, colleges, and universities may have direct connection Creating a Winning E-Business Second Edition, Chapter 1

The Internet and World Wide Web (continued) Creating a Winning E-Business Second Edition, Chapter 1

The Internet and World Wide Web (continued) Creating a Winning E-Business Second Edition, Chapter 1

The Internet and World Wide Web (continued) Creating a Winning E-Business Second Edition, Chapter 1

The Internet and World Wide Web (continued) World Wide Web (Web) A subset of the Internet Built on the concept of hypertext System of linked pages called Web pages Related Web pages are called a Web site Viewed in a Web browser Stored on Web servers Millions of people around the world access the Internet and Web daily Creating a Winning E-Business Second Edition, Chapter 1

E-Business and the Global Economy Widespread linking of individuals and businesses has changed global economy Time and space are no longer limiting factors Business value of information is greater Information is more accessible Traditional intermediaries have been replaced by new types of intermediaries Creating a Winning E-Business Second Edition, Chapter 1

E-Business and the Global Economy (continued) Buyers are growing more powerful Internet and Web access has changed buyers expectations Information on competing products Transaction speed and convenience Creating a Winning E-Business Second Edition, Chapter 1

E-Business and the Global Economy (continued) Creating a Winning E-Business Second Edition, Chapter 1

E-Business and the Global Economy (continued) Creating a Winning E-Business Second Edition, Chapter 1

E-Business and the Global Economy (continued) Creating a Winning E-Business Second Edition, Chapter 1

E-Business and the Global Economy (continued) Creating a Winning E-Business Second Edition, Chapter 1

E-Business and the Global Economy (continued) Creating a Winning E-Business Second Edition, Chapter 1

E-Business and the Global Economy (continued) Value chain or value network Activities involved in the production of goods or services Internet and Web technologies facilitate value chains and networks Improve communication Improve transaction speed Internet and Web access allows businesses to rethink their value chains Creating a Winning E-Business Second Edition, Chapter 1

E-Business and the Global Economy (continued) Creating a Winning E-Business Second Edition, Chapter 1

E-Business and the Global Economy (continued) Creating a Winning E-Business Second Edition, Chapter 1

E-Commerce and E-Business Electronic commerce is the use of technology, in particular the Internet, to conduct business e-commerce generally refers to buying or selling electronically, usually interactively e-business refers to conducting business activities, including business to business activities, using electronic communication e-[you fill in the blank] Creating a Winning E-Business Second Edition, Chapter 1

Creating a Winning E-Business Second Edition, Chapter 1 E-COMMERCE TECHNOLOGIES Commercial History of the Internet Creating a Winning E-Business Second Edition, Chapter 1

Creating a Winning E-Business Second Edition, Chapter 1 E-COMMERCE TECHNOLOGIES Will we see continued growth in e-commerce (Internet) applications? Consider Metcalfe’s Law: The value of a network to each of its members is proportional to the number of other users, expressed as (n2 – n) / 2 There are increasing returns to be gained as more organizations and people use the Web Creating a Winning E-Business Second Edition, Chapter 1 Page 240

Creating a Winning E-Business Second Edition, Chapter 1 The Nature of Markets In a free market economy, transactions take place where the downward sloping demand curve intersects the upward sloping supply curve. The intersection of these two curves determines both the price and the quantity sold Creating a Winning E-Business Second Edition, Chapter 1

Economics of E-Marketplaces Creating a Winning E-Business Second Edition, Chapter 1

Economics of E-Marketplaces Creating a Winning E-Business Second Edition, Chapter 1

Electronic Marketplaces What are the functions of markets? matching buyers and sellers facilitating the exchange of information, goods, services, and payments associated with market transactions providing an institutional infrastructure, such as a legal and regulatory framework, that enables the efficient functioning of the market Creating a Winning E-Business Second Edition, Chapter 1

Creating a Winning E-Business Second Edition, Chapter 1 E-Business Models Business models How a company conducts business in order to generate revenue Widespread access to the Internet and Web allows companies to adapt old models and create new ones E-business models are often categorized by type of customer Creating a Winning E-Business Second Edition, Chapter 1

E-Business Models (continued) Creating a Winning E-Business Second Edition, Chapter 1

E-Business Models (continued) Business-to-consumer (B2C) Retail sales (e-retail) including airline tickets, entertainment venue tickets, hotel rooms, stock purchases, diet and fitness programs Brick-and-mortar companies are moving to brick-and click companies Sears, Best Buy, Barnes & Noble, the Gap Pure-play e-retailers and catalog merchants Amazon.com, eBags, Harry and David Creating a Winning E-Business Second Edition, Chapter 1

E-Business Models (continued) Creating a Winning E-Business Second Edition, Chapter 1

E-Business Models (continued) Creating a Winning E-Business Second Edition, Chapter 1

E-Business Models (continued) Creating a Winning E-Business Second Edition, Chapter 1

E-Business Models (continued) Business-to-business (B2B) Businesses selling to other businesses Online stores, such as Office Depot, Staples Internet and Web technologies Web hosting Web design Hardware and software Consulting Creating a Winning E-Business Second Edition, Chapter 1

E-Business Models (continued) Business-to-business (B2B) Online trading communities for vertical markets Exchanges, aggregators, auctions Virtual marketspaces for buyers and sellers Elance, ATLA Exchange, Business.com, HedgeHog Creating a Winning E-Business Second Edition, Chapter 1

E-Business Models (continued) Creating a Winning E-Business Second Edition, Chapter 1

E-Business Models (continued) Creating a Winning E-Business Second Edition, Chapter 1

E-Business Models (continued) Creating a Winning E-Business Second Edition, Chapter 1

E-Business Models (continued) Business-to-government (B2G) Businesses provide a marketspace for other businesses and government agencies Bidmain, B2GMarkets Creating a Winning E-Business Second Edition, Chapter 1

E-Business Models (continued) Creating a Winning E-Business Second Edition, Chapter 1

E-Business Models (continued) Consumer-to-consumer (C2C) Consumers sell or exchange products and services directly with other consumers Auctions, online classified ads, expert information exchanges eBay, American Boat Listing, TraderOnline.com, AllExperts Creating a Winning E-Business Second Edition, Chapter 1

E-Business Models (continued) Creating a Winning E-Business Second Edition, Chapter 1

E-Business Models (continued) Creating a Winning E-Business Second Edition, Chapter 1

E-Business Models (continued) Consumer-to-business (C2B) Reverse auctions in which a single consumer names his or her own price for products or services Consumer’s offer made to multiple businesses, which can accept or decline offer Priceline.com Creating a Winning E-Business Second Edition, Chapter 1

E-Business Models (continued) Creating a Winning E-Business Second Edition, Chapter 1

Typical Business Models in EC Online direct marketing Electronic tendering systems (e.g., reverse auction) Name your own price Affiliate marketing Viral marketing Group purchasing Online auctions Product and service customization customization Electronic marketplaces and exchanges Value-chain integrators Value-chain service providers Information brokers Bartering Deep discounting Membership Supply chain improvers Creating a Winning E-Business Second Edition, Chapter 1

Creating a Winning E-Business Second Edition, Chapter 1 Porter’s Competitive Forces Model: How the Internet Influences Industry Structure Creating a Winning E-Business Second Edition, Chapter 1

Summary of Work-Group Computing Shifts Organizational Hierarchy Business Team Organization Personal Computing Work-Group Computing Emphasis on the individual Emphasis on the group Designing Technology Redesigning the entire system Taylorism The new work reengineering Technical Users Direct support of all personnel Installing Technology Leadership for evolving work Creating a Winning E-Business Second Edition, Chapter 1

Creating a Winning E-Business Second Edition, Chapter 1 Islands of Technology Technology is implemented to manage three resources: Physical Assets Human Resources Financial Assets What if they are not speaking to one another??? Creating a Winning E-Business Second Edition, Chapter 1

Problems With Enterprises that aren’t speaking… Redundancy of Functionality Miscommunications due to lack of integration Poor quality customer service Operational inefficiencies due to miscommunications and redundant processing Internal Focus Creating a Winning E-Business Second Edition, Chapter 1

Problems With Enterprises that aren’t speaking… Systems are perpetuated in order to treat operational symptoms without recognizing fundamental problems Organizational conflict and ‘turf’ battles erupt due to the historical creation of data processing developing financial solutions, engineering developing physical assets, and administrative groups to manage human resources Creating a Winning E-Business Second Edition, Chapter 1

What happens when an enterprise shifts to integration Technology Applications Organizational Restructuring System Islands Integrated Systems Separate Systems Integrated Environments Single-form Systems Integrated data, voice, & image Cost Reduction Enterprise Effectiveness Creating a Winning E-Business Second Edition, Chapter 1

What happens when an enterprise shifts to integration Value Chain Value Network Simple Market Combat Competition via Cooperation Manual Communications Electronic Communication Enterprise Technology Interorganizational Computing Purchaser of Information Information Purchaser/Vendor Creating a Winning E-Business Second Edition, Chapter 1

The Collaboration and Communication Imperative Organizations have always needed to communicate effectively to survive Ram’s horns and bugles Roman roads The Pony Express Telegraph Phones Faxes Email EDI Creating a Winning E-Business Second Edition, Chapter 1

The Collaboration and Communication Imperative Organizations that don’t communicate and collaborate effectively are doomed to failure (e.g., K-mart & Sears v. Wal-mart and Target) Creating a Winning E-Business Second Edition, Chapter 1

The Collaboration and Communication Imperative Collective intelligence From Wikipedia: “…a shared or group intelligence that emerges from the collaboration and competition of many individuals.” Creating a Winning E-Business Second Edition, Chapter 1

Creating a Winning E-Business Second Edition, Chapter 1 Enterprise 2.0 and corporate collaboration, coordination, and communication Enterprise 2.0: social media and web 2.0 software used in "enterprise" (i.e., business) applications. Social media and networked intranets used to organize and facilitate communication Bottom up form of knowledge dissemination and capture (as contrasted with traditional enterprise software, which defines structure prior to use) Creating a Winning E-Business Second Edition, Chapter 1

Creating a Winning E-Business Second Edition, Chapter 1 Why Enterprise 2.0? According to Coleman & Levine, there are 10 Trends in Collaboration driving adoption Convergence of media Presence Everywhere Integration of synchronous and asynchronous Collaborative consolidation in IT Collaboration pushed into the infrastructure Market Consolidation Collaboration pushed into critical processes Changing distribution channels for collaboration Changing buyers of collaboration services Mobile collaboration Creating a Winning E-Business Second Edition, Chapter 1

Creating a Winning E-Business Second Edition, Chapter 1 But, why Enterprise 2.0? Many of these trends are symptoms, not drivers. What are the drivers? Robust collaborative technologies: Technologies today work, and they work well! Ubiquitous connectivity: Convergence of devices and applications has led to the ability to connect anytime, anywhere across multiple platforms (we ain’t cloistered anymore) Globalization: Organizations and teams are spread around the country or the world; venders have provided solutions to allow teams to work together across space and time Societal and Generational Change: A generation of employees is entering the workforce who have grown up on cable, the Internet, and ready access to information. It’s part of the culture! Creating a Winning E-Business Second Edition, Chapter 1

Creating a Winning E-Business Second Edition, Chapter 1 But, why Enterprise 2.0? One final driver … The competitive imperative: everyone else is doing it, shouldn’t we? The answer to this question is not always “yes” but in this case it most likely should be answered in the affirmative Creating a Winning E-Business Second Edition, Chapter 1

An Outline of the course Introduction to Organizations Teams and teamwork Virtual Teams Collaboration and coordination Virtual Worlds Technologies to support web 2.0 SharePoint Google Sites Virtual Organizations Marketing and Applications Implementation and Deployment The rest… Creating a Winning E-Business Second Edition, Chapter 1

Creating a Winning E-Business Second Edition, Chapter 1 What is Web 2.0? Web 2.0: A term that focuses on the use of various web technologies and applications that can be used to information sharing and collaboration. Web 2.0 encompasses social media, social networks, wikis, blogs and other software tools that connect people into loosely or tightly coupled networks Social Media: a class of technologies that have in common a participatory mode of information collection, validation, and publication Social Networks: a class of technologies that focus on tying groups of people together into loosely aligned groups based on common interests or affiliations Wikis: A web-based software applications designed to allow end-users to create, edit, and link web pages Blog: derived from the term “web log” is essentially an online diary of commentary, activity logs, and other content developed by a blog author Creating a Winning E-Business Second Edition, Chapter 1

Creating a Winning E-Business Second Edition, Chapter 1 Web 20 Creating a Winning E-Business Second Edition, Chapter 1

Creating a Winning E-Business Second Edition, Chapter 1 Chapter Summary E-business – Conducting a broad spectrum of business activities over a telecommunications network Internet – A worldwide public network that connects private networks World Wide Web – A subset of the Internet Time, space, and geographic location no longer limiting factors Creating a Winning E-Business Second Edition, Chapter 1

Chapter Summary (continued) Buyers are growing more powerful Businesses are rethinking their value chains Business model – The way a company conducts its activities in order to generate revenue Businesses are adapting old business models and creating new ones E-business models – B2C, B2B, B2G, C2C, C2B Creating a Winning E-Business Second Edition, Chapter 1