E-Business E-Commerce William R. Mussatto CyberStrategies, Inc. 8/15/2000

E-Commerce Topics E-Commerce Overview B2B: Business-to-Business –Procurement Models B2C: Business-to-Consumer C2C: Consumer-to-Consumer

E-Commerce Overview Context: Three Components Supporting Infrastructure Electronic Business Processes (how business is conducted) Electronic Commerce Transactions (buying and selling)

E-Commerce Overview Supporting Infrastructure Computers, routers, and other hardware Satellite, wire, and optical communications System and applications software Support services: web site development, hosting, consulting, electronic payment, and certification services Human capital, such as programmers

E-Commerce Overview E-Business Processes Electronic business (e-business) is any process that a business organization conducts over a computer-mediated network Many examples: –production-focused –customer-focused –internal or management-focused

E-Commerce Overview E-Business Process Examples: Production-focused Procurement Ordering Automated Stock Replenishment Payment Processing Electronic Links with Suppliers Production Control –processes directly related to production process

E-Commerce Overview E-Business Process Examples: Customer-focused Marketing Electronic Selling (B2C or B2B) Processing of Customer Orders and Payments Customer Management and Support (CRM)

E-Commerce Overview E-Business Process Examples: Internal or Management-focused Automated Employee Services Training Information Sharing Video Conferencing Recruiting Advantages?

E-Commerce Overview Electronic commerce is any transaction completed over a computer-mediated network that involves the transfer of ownership or rights to use goods or services –from Census Bureau Mostly: Electronic Buying and Selling of Goods –not just on the Internet

E-Commerce Overview Not Really New –EDI: Electronic Data Interchange B2B Internet Has Globalized E-Commerce –non-proprietary, common, communications infrastructure

E-Commerce Overview Primarily Web-Based –HTTP and HTTPS are transport mechanisms –SMTP used for notification and verification purposes –FTP used for download of soft goods –EDI is also quite substantial and becoming “web enabled”

E-Commerce Overview Some Examples from the Census Bureau U.S. Census Bureau – An individual purchases a book on the Internet. A government employee reserves a hotel room over the Internet.

E-Commerce Overview Some Examples from the Census Bureau A business calls a toll free number and orders a computer using the seller's interactive telephone system. A business buys office supplies on-line or through an electronic auction. A retailer orders merchandise using an EDI network or a supplier's extranet.

E-Commerce Overview Some Examples from the Census Bureau A manufacturing plant orders electronic components from another plant within the company using the company's intranet. An individual withdraws funds from an automatic teller machine (ATM).

B2B: Business-to-Business Organizational Buying and Selling Procurement Models –buyer push request for quote / information –hotelsupplies.com, medibuy.com offering a bid price (priceline) sellers bid to sell –buyer pull: browsing catalogs and adding to shopping cart

B2C: Business-to-Consumer Census Bureau Statistics: –Third Quarter 2000: $5.3B in U.S. online retail sales 0.78% of all retail (4th qtr % ) –See also:

B2C: Business-to-Consumer Transaction Multiplier Effect –one B2C transaction causes several B2B transactions to take place –not unique to online transactions but happens in nearly real-time

Consumer-to-Consumer Auctions –seller push buyers bid Listings –seller push –buyer pull –tend to be free or as service to get visitors to a site.

E-Commerce Summary Digital Economy Growth outpacing last year’s most optimistic projections –as share of retail portion, e-commerce remains quite small-- less than 1 percent From 1995 to 1998, IT-producers contributed to 35% of real economic growth –yet accounted for only 8 percent of U.S. GDP

E-Commerce Summary Digital Economy In 1996 and 1997, falling prices in IT- producing industries brought down overall inflation by an average 0.7% –partially responsible for keeping inflation at interest rates low simultaneously IT industries have achieved extraordinary productivity gains –10.4% average annual growth

E-Commerce Summary Digital Economy By 2006, almost half of the U. S. workforce will be employed by industries that are either major producers or intensive users of information technology products and services. New high demand for core IT workers –engineers, computer scientists

Problems with.com Faulty assumptions –Front end is all important. –Delivery is easy. Attack of the brick and mortars. –Barns & Nobel –L.L. Bean –ToysRus

Class Problem Design either a B2B site or a B2B site –Outline the areas –Specify what must happen when a customer goes to actually buy the item. –Take about 30 minutes and appoint someone to describe the steps.

Extra Detailed walk through simple shopping cart system. Discussion of Industrial Strength E- Commerce as IBM sees it.