1 Electronic Business Course: Information Technology Applications in Business, Grade 11, Open (BTA3O) Unit: Electronic Business Topic: The Concept and Operations of Electronic Business

2 Agenda Defining e-business 10 min e-business networks 5 min Functions of e-business 5 min Security and Regulations 5 min e-business tips 10 min Statistics 5 min Present State of e-business 5 min Future of e-business 5 min In-class activity - shopping online 25 min

3 What is e-business? Technically e-business is commercial activity conducted over networks linking electronic devices. Basically e-business is a cheap way of connecting computers in order to accomplish business tasks.

4 Examples of e-business Purchasing a book on the Internet. Purchasing an airline ticket on the Internet. Calling a toll free number to order a video using the seller’s interactive telephone computer system. Faxing an advertisement for solicitation. Withdrawing funds from a linked bank machine. Purchasing an item through a computer enabled kiosk. Paying for gas with a credit card at the pump.

5 What kind of networks are used for e-business? Technically e-business first emerged in the 1960’s on closed networks as large organizations developed electronic data interchange and banks implemented electronic fund transfers. The internet itself was first a closed network established by the U.S. military for security communications. Today it has evolved into an open network accessed cheaply by people around the world.

6 What kind of networks are used for e-business? Basically Small businesses can now climb on board the Internet, which amounts to a free electronic highway. Once connected, you can buy, sell, and connect to people who matter to you quickly and cheaply.

7 Functions of e-business 1. Communicate Promote 3. Buy and Sell 4. Economy – reduce cost of paper and postage 5. Research – product and company information 6. Effectiveness – fast and cheap 7. Mobility – work out of office and compete globally

8 Is e-business secure? Encryption software can scramble personal information. Most credit card fraud occurs in traditional environments where receipts are stolen. Bill C-6 will guarantee privacy by establishing principles governing the collection, use and disclosure of personal information. However, no business transaction is perfectly secure from potential fraud.

9 What regulations apply to e-business? All existing laws that apply to traditional commerce apply equally in an electronic environment. -business incorporation -business name registration -taxation -consumer protection -deceptive advertising -product safety -product standards

10 How to shop on the Net Know the merchant you’re dealing with. Look for detailed product/service information. Read contract terms and conditions - print them. Ensure the merchant has a secure transaction system. Check for quality assurances and guarantees. Check for refund and complaint policies. Be cautious against mass market .

11 Avoid ! Any offer that sounds to good to be true. Any site that asks for personal information prior to disclosing the offer. Promises a valuable prize in return for a cheap purchase. Any offers that pressure you to send money to take advantage of a special deal. Any loan offer that requires you to send money to secure the loan. Investment schemes.

12 The Forgotten Costs Shipping costs U.S. exchange rate Duty Provincial Taxes Federal Taxes Usually higher prices

13 e-business Global Sales 1999 $ 195B Cdn 2004 $ 3.9T Cdn

14 Statistics Canadians accessing the Internet % % % % % % %

15 More Statistics Canadian households making a purchase via the Internet % % % % %

16 Even More Statistics Canadian Internet Sales by Industry Manufacturing$900m Retail$610m Information/Cultural$553m Accommodation/Food$430m Scientific/Technical$406m Finance/Insurance$320m Transport Warehousing$164m Wholesale$156m Real Estate$115m Utilities $16m Mining/Oil/Gas $15m Health Care $10m

17 Retailers who have a web site with: A product or service catalogue61% A customer on-line ordering system32% A credit-card payment system27% Personalization / Membership 22%

18 What are consumers buying? Books70% Videos and CDs 63% Toys48% Software31% Entertainment29% Apparel27% Gift Certificates21%

19 The e-tailing Retreat Gone! holtrenfrew.com, lasenza.com, birks.com, suzyshier.com, pets.com, toysmart.com, garden.com and babygear.com “Stand Alone Pure Plays” e-tailers facing difficulty. Goal for “stand alones”? Survive, or look attractive to partners or acquirers in brick and mortar businesses.

20 Problems facing e-tailers Technical glitches Initial euphoria over Prices tend to be more expensive Shipping costs Shipping delays Too expensive to maintain site Some products don’t fit well

21 Future of e-business Strong for products and services that can be purchased over the Net. eg. software, banking, airline tickets Strong for catalogue retailers. For most retailers, the Internet is a information and marketing tool. People will always want to touch things before they buy.

22 That’s all folks!