The Internet & Electronic Commerce

THE ELECTRONIC MALL

Online SalesOnline Sales

Traditional Commerce: Buyer

Traditional Commerce: Seller

Business processes suited for e-commerce --

Group Exercise  What are some advantages of e-commerce äRe: sales and costs; other??  What are some disadvantages of e- commerce? äHuman äTechnological äSocial, cultural  What business processes involving HR are amenable to e-commerce type solutions?

Three Questions Regarding E-Commerce  How will e-commerce change our customer’s priorities?  How can we construct a new business design to meet these new customer priorities?  What technology investments must we make to survive, let alone thrive? äFrom Kalakola and Robinson “E-business: Roadmap for Success How does this question relate to HR?

International Electronic Commerce  Language barriers must be overcome  Political structures äCurrency conversion äTariffs and import/export restrictions  Legal, tax, and privacy concerns äWho has jurisdiction to levy taxes? äHow is personal information handled?

The Internet and World Wide Web  The Internet is a large system of interconnected networks that spans the globe  The World Wide Web (WWW) is part of the Internet and allows users to share information with an easy-to-use interface äClient server architecture; graphical user interface; dynamic links  Developed by the U.S. Department of Defense in the early 1960s

Some Characteristics  Ubiquitous  Global reach  Universal standards  Information richness  Interactive  Density of information  Personalization and customization

Intranets and Extranets Extranet  Allows select users outside organization to use its intranet:  Customers  Business partners  Vendors  Used in B2B Intranet: Internal network using web technology Overcomes computer platform differences Often installed on existing network infrastructure What are some applications of each? Benefits?

E-Commerce and Industry Value Chains

E-Commerce and Firm Value Chains

Value Chain Observation  How does e-commerce impact the value chain?  How does one firm using e-commerce impact others?

INTERNET BUSINESS MODELS  VIRTUAL STOREFRONT: Sells goods, services on-line  MARKETPLACE CONCENTRATOR: Concentrates information from several providers  ON-LINE EXCHANGE: Bid-ask system, multiple buyers, sellers  INFORMATION BROKER: Provide info on products, pricing, etc.  TRANSACTION BROKER: Buyers view rates, terms from various sources  AUCTION: Electronic clearinghouse products, prices, change in response to demand  REVERSE AUCTION: Buyer sets price, submits to multiple sellers  DIGITAL PRODUCT DELIVERY:Sell, download software, other digital products  CONTENT PROVIDER: Creates revenue through providing client for a fee, and advertising  ON-LINE SERVICE PROVIDER: Provides service, support for hardware, software products

Business-to-Business Electronic Commerce  Automation Of Purchase, Sale Transactions From Business To Business  Electronic Data Interchange (EDI): Older System, Being Replaced By Internet, Intranet  Provides Alternative Sources

Two Main Type of Internet- based B2B Commerce

Pure Types of Net Marketplaces

Electronic Commerce Support Systems  WEB HOSTING SERVICES: provides large servers for Web sites of fee-paying customer  ELECTRONIC PAYMENT SYSTEM: using Web for electronic funds transfers, credit, smart & debit cards

Types of Online Communities  Different sponsors or members ä opportunities to interact with a general audience organized into general topics  Practice communities ä focused discussion groups, help, information, and knowledge relating to an area of shared practice  Interest communities ä focused discussion groups based on a shared interest in some specific subject  Affinity communities ä focused discussions and interaction with other people who share the same affinity. Affinity refers to self- and group identification  Sponsored communities ä created by government, nonprofit, or for-profit organizations for the purpose of pursuing organizational goals -- often commercial goals

Internet Benefits To Organization  Reduces Communication Costs  Enhances Communication; Coordination  Accelerates Knowledge Distribution  Other ???

Internet Challenges  SECURITY: Exposure to Thieves & Vandals; Hackers Steal, Use Passwords; Not Yet Safe for Large Business Transactions  TECHNOLOGY: Lack of Uniform Standards; Transfer of Graphics, Video can be Costly  LEGAL ISSUES: Need More Laws Governing Electronic Commerce; Are Contracts, Electronic Signatures Legal?