© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott COMP3115 Information Systems Session 7: E-Business Strategy: Architecture and Design – Part I Dr. Paul Walcott Spring 2007/ © 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill Campus

Dr. Paul Walcott Session Objectives Define e-business Comprehend e-business concepts Compare and contrast e-commerce and e- business

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott Introduction In this session we will be taking a look at e-business and finding out:  What it is, and  Why information systems are important to it

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott Dell Computer Dell Computer is a company that builds customized computers for its customers Dell’s story is a great example of a successful business which was started by a college students Read the Dell Computer case study  (Alter, 2002, pp. 3-4)

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott Debate Which is more important to Dell:  the fact that it sells computers over the Web, or  the fact that its manufacturing process permits it to build and deliver customized computers efficiently?

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott Activity #1 Draw the work system model for the Dell Computer case study (Alter, 2002)

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott Activity #1 - Solution The work system model describes:  Customers  Products and services  Business processes  Participants  Information  Technology

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott Activity #1 – Solution Cont’d (Alter, 2002)

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott E-Business

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott “E-business is the practice of performing and coordinating critical business processes such as designing products, obtaining supplies, manufacturing, selling, fulfilling orders, and providing services through the extensive use of computer and communication technologies and computerized data.” (Alter, 2002)

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott “E-business … includes everything having to do with the application of information and communication technologies (ICT) to the conduct of business between organizations or from computer to consumer.” (Huff et al. (2000) cited in Alter, 2002)

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott “E-business includes e-commerce but also covers internal processes such as production, inventory management, product development, risk management, finance, knowledge management, and human resources.” (Bartels (2000) cited in Alter, 2002)

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott E-Commerce E-commerce may be defined as the conducting of business using ICT This is a very general definition but in a sense helps the definition to be more future proof

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott E-Commerce Currently, the driving ICT for e-commerce is the Internet  Some may argue that e-commerce existed before the Internet  In the future, some new technology might be used instead of the Internet; at least for some applications

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott E-Commerce Cont’d There are five main categories of e- commerce (Schneider, 2007):  Business to consumer (B2C)  Business to business (B2B)  Business to Government (B2G)  Consumer to Consumer (C2C)  Business processes that support buy sell activities

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott E-Commerce Cont’d The most common known type of e- commerce is B2C where a business sells a product or service to a consumer  For example, a consumer buying a book from Amazon.com B2B is concerned with businesses selling product and services to one another

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott E-Commerce Cont’d An interested category, which Schneider (2007) describes is business processes needed to support buy/sell activities These business processes are the primary interests of e-business

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott E-Commerce Cont’d For more details on the various types of e- commerce see my e-commerce resources at:  comp3210#notes comp3210#notes Read the entire of Session 1

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott E-Commerce Cont’d Several business models are utilised in e- commerce, for example (Alter, 2000, pp.16):  E-retailer Sell directly to consumers or businesses  Clicks and bricks Utilise brick-and-mortar establishment and online  Financial services  E-auction  E-marketplace

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott E-Commerce Cont’d Some authors, such as Schneider (2007) argue that revenue models are more important than business models for e- commerce  See Session 7 of my e-Commerce notes for a discussion on revenue models comp3210#notes comp3210#notes

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott E-Business As discussed earlier, an organisation comprises of several information systems Information systems are the foundation of e-business

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott E-Business Cont’d Now that we understand what e-business is about, the question must be asked “Why is it important?”  The primary purpose of e-business is to identify, optimise and automate business processes through the use of ICT  This reduces cost

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott “A business process is a related group of steps or activities in which people use information and other resources to create value for internal or external customers.” (Alter, 2002)

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott E-Business Cont’d An example is:  The product design, the design of a given greeting card, process of a greeting card company  Other examples include selling and delivering the product

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott E-Business Cont’d A Business process has:  Inputs  Outputs  A beginning, and  An end

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott E-Business Cont’d The value added by a business process may be measured by determining the difference in value between the inputs and outputs of the process  For example, a greeting card has more value that the card, glue and ink used to create it

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott “The set of processes a firm uses to create value for its customers is often called its value chain.” (Alter, 2002)

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott E-Business Cont’d A value chain has primary processes and support processes The primary processes are those which create a product or service for the customer Support services are required to achieve the primary processes

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott E-Business Cont’d An example of a support process is Human Resources  Note that the hiring or paying of staff does not, in itself, help to create products or services for the customer

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott E-Business Cont’d For more information on value chains, for example the different types of value chains, read my Session 1 notes at:  comp3210#notes comp3210#notes This is required reading

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott E-Business Cont’d Value chains may be extended to include processes within a firm, its suppliers and customers (Alter, 2002):  The supplier’s value chain  The supply chain between the supplier and the firm  The firm’s value chain  The customer’s experience in acquiring and using the product

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott E-Business Cont’d The movement of goods between a supplier and the firm is called the supply chain The purpose of evaluating these value chains is to improve efficiency

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott E-Business Cont’d Alter, 2002, pp. 13)

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott Conclusions In this session we discussed  The Dell success story  The work system model for Dell Computer case study  E-business and how it is different from e- commerce  E-commerce business models  Value chains

© 2008 Dr. Paul Walcott – The University of the West Indies: Cave Hill CampusDr. Paul Walcott References Alter, Steven Information Systems: The Foundations of E- Business. 4 th Edition. Upper Saddle River, NJ: Pearson Education. Schneider, Gary, P., “Electronic Commerce”, Thomson Course Technology, Seventh Annual Edition, 2007