Knowledge Management for Electronic Commerce SUMMER 2001 Prof. Dr. Michael M. Richter Dr. Ralph Bergmann University of Kaiserslautern Calgary University

Chapter 0 Introduction

- 3 - (c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern Growing Importance of E-Commerce Europe's eCommerce revenues have tripled in the last twelve months and are projected to grow even faster over the next few years. A recent Andersen Consulting study reports 64 % of Web shoppers say the products they hope to buy are out of stock. New modes of reaching customers have only compounded the importance of an integrated supply chain to get products to those customers. According to Andersen Consulting testing, one in four attempted online holiday purchases ended in "no sale” when eCommerce sites crashed or were otherwise inaccessible. Testers in three U.S. cities tried making 480 purchases from one hundred different Web sites; twenty-five percent of the attempted purchases had to be abandoned when sites'infrastructures failed.

- 4 - (c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern Global World Wide Source: Andersen Consulting, 2000 (

- 5 - (c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern Western Europe Source: Andersen Consulting, 2000 (

- 6 - (c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern USA Source: Andersen Consulting, 2000 (

- 7 - (c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern Asia Pacific Region Source: Andersen Consulting, 2000 (

- 8 - (c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern Internet Broker in the US (1. Quarter 2000) (Source: Salomon Smith Barney) Charles Schwab: 304 T (transactions per day) (23.3% of the market) E-Trade: (17.5%) TD Waterhouse: (14.0%) Fidelity Online: (12.0%) Armeritrade: (11.4%) Datek Online: (9.3%) Average investment in marketing per new customer: US$ Example E-Trade: Current market value: 5.3 Billion US$

- 9 - (c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern The Task of the Course Rough representation of an overall view of the activities in electronic commerce. –The sales process from the customers point of view –The sales process from the suppliers point of view Identification of the steps where computers are or could be involved. Identification of knowledge intensive steps and description of the difficulties they present. Description of techniques to deal with them. Locating the application of these techniques in the overall electronic-commerce view and incorporating them in knowledge management activities.

(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern Three Views First view: Economics, business organization Second view: Computer science, data structures, data flow, algorithms Third view: Products, properties Each view results in different structures of the topic: –They group topics in a different way –They emphasize different organizational structures –They describe topics with different vocabulary The product view is of minor importance here because they are objects which have to be handled and it is sufficient to know only certain properties of them. This may be different if highly specialized products are sold where specific knowledge is required.

(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern Economical View The economical view provides the primary structure in the sense that the other views have to respect it. The economical view defines in particular the goals which have to be achieved. Besides this the main influence of the economical view results in a model of the sales process. This process model defines the steps and actions which have to be carried out. The structure and the details of the sales process are presented in chapter 1.

(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern Computer Science View This course is structured from the computer science view: Typical computer science problems occurring in different business phases: –representation tasks –problems like classification, modification, etc. These problems are analyzed as computer science demands it, in particular new process models are defined. On the other hand, for each technique there is a pointer to the economical process model. The ultimate goal is to give a unified view. As a consequence, the economical model might be changed in the presence of computer techniques, the whole area is rapidly changing.

(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern Three Major Aspects In a sales situation we encounter always: –A supplier –A customer –A product The relations between such objects are often imprecise: –What the supplier knows about the customer –What the customer knows about the product –etc. This course pays essential attention to these relations and the consequences for the sales situation. A main technique used here is similarity based reasoning; the tool used is CBR-Works

(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern Content of the Course 1.Basic tasks in electronic commerce 2.Issues for computer science 3.Informal introduction to similarity and case-based reasoning 4.Logic-oriented representation formalisms 5.CBR representation 6.Similarity 7.Similarity based retrieval 8.Collaborative Filtering 9.Products: Representation, design, and customization 10.Customer modeling 11.The dialogue 12.After sales support 13.Data mining 14A.Many Suppliers 14B. Agents 15.Knowledge management