ELC 200 Introduction to E-Commerce Copyright, Tony Gauvin, UMFK, 2004

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall Introduction Class roll call Instructor Introduction Instructor’s Educational Philosophy Syllabus review General Information about class WebCT accounts Some Group Work Intro to eCommerce

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall Instructor Tony Gauvin –Assistant Professor of E-Commerce –216 Nadeau Hall –(207) or Extension 7519 –WebCT

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall Instructional Philosophy Out-Come based education Would rather discuss than lecture –Requires student preparation Hate grading assignments –Especially LATE assignments Use class interaction, assignments, quizzes and projects to determine if outcomes are met.

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall ELC 200 Survival Primer Read Material BEFORE the class discussion –Summary & Key Terms at EOC –Review and Discussion Questions in EOC –Web Exercises Check WebCT Often Use the additional resources identified in syllabus ASK questions about what you didn’t understand in readings DON’T do homework at last minute. REVEIW lectures and notes Seek HELP if you are having difficulties OFFER feedback and suggestions to the instructor in a constructive manner Student Study Groups are STONGLY Encouraged

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall ELC 200 Specifics WebCT used to augment course Two Desired outcomes –The E-Commerce Life Cycle Students will understand how a E-Commerce initiative is taken from vision to Fulfillment –Entrepreneurship Students have the ability to create the framework for a viable e- commerce initiative Managerial Perspectives instead of technical –Technical Portions will be covered in COS XXX classes –Understanding “Why” instead of “How”

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall Group Work Define E-Commerce –Don’t use the book! Identify 3 Technical Drivers of E- Commerce Identify 3 benefits of E-Commerce Identify 3 detractors of E-Commerce Identify an E-Commerce Success Identify an E-Commerce DUD

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall UMFK’s Definition of E-Commerce An attempt to achieve transactional efficiency in all aspects of the design, production, marketing and sales of products or services for existing and developing marketplaces through the utilization of current and emerging electronic technologies E-Commerce IS NOT –E-Business –DOT-COMS (or Dot-Bombs) –E-Marketing –Easy or Cheap –NEW There are other definitions..The text book’s author has another less inclusive definition

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall E-Commerce Degree Program Combination of Technical Skills and Management know-how Prepares students for Leadership Roles –Cadre (team) building –Broad-based technical underpinnings with one or two specialist areas –Understanding of implications of E-Commerce within an organizational context and within broader social issues

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall Management Capabilities Financial Ethical Marketing Human Resources Leadership Project planning and management Operations management

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall Technical Skills Programming –Procedural & Scripting –Object Oriented –Markup Languages System analysis –Needs assessment –System design and Specification –Project Management Networks –Design –Administration –Security Databases –Design –Transaction programming –Administration

ELC 200 DAY 2

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall Agenda Questions? Finish up on Introduction to eCommerce Assignment 1

In the Beginning Chapter 1

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall OBJECTIVES What is E-Commerce? Advantages and Limitations of E-Commerce Strategy in E-Commerce Value Chains in E-Commerce E-Commerce Integration

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall What is e-commerce? Electronic Commerce (e-commerce) can be viewed from several perspectives. –From a communications perspective, e-commerce is the delivery of information, products and services, and payments through telephone lines, computer networks, etc. –From an interface perspective, e-commerce involves various information and transformation exchanges: B2B, B2C, C2C, B2G, G2C –From a business process perspective, e-commerce is the applications of technology toward the automation of business transactions and workflows. –From a service perspective, e-commerce is a tool that allows firms, consumers and management the ability to cut service costs, while improving the quality of goods and increasing the speed of delivery of service. –As a market, eCommerce is a world-wide network. A local store can open a web store front and find the world at its doorstep/ –From a online perspective, e-commerce provides the capability of buying and selling products and information on the Internet. –From a structural perspective, e-commerce involves various media: data, text, web pages, Internet telephony, and Internet Desktop video.

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall WHAT IS E-COMMERCE? Electronic Presentation of Goods and Services Automated Customer Account Inquiries Online Order Taking and Payments Online Transaction Handling Automated Supply Chain Management Solutions

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall WHY E-COMMERCE? Digital Convergence Anytime, Anywhere, Anyone Changes in Organization’s Make-up Widespread Access to IT Increasing Pressure on Operating Costs and Profit Margins Demand for Customized Products and Services Speed or Time Reduction

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall E-COMMERCE MYTHS Setting up a Web site is easy E-commerce is cheap when compared to purchasing a mainframe E-commerce means end of mass marketing Everyone is doing it E-commerce is lucrative E-commerce is revolutionary The Internet is a commercial fad that crashed in 2000

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall E-COMMERCE MYTHS (Cont’d) B2C eCommerce is dead – Online retailing is always the low-cost channel All products can be sold online using identical business models Customers can be bought Online firms face less pressure to grow and achieve economies of scale Size is not important for online firms The middleman is out

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall Quote from text “Ecommerce is everywhere. After boom and bust, it is not new or unique anymore. The advantage is that the focus now is on basic business principles such as return on investment, building trust, and telling the customer what is available in stock. Ecommerce has become just plain commerce. It is just another channel to reach customers, vendors and suppliers.”

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall An eCommerce Timeline SOURCE: the Gartner Group High Visibility

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall ADVANTAGES OF E-COMMERCE Lower Transactional Costs Economical Higher Margins Better and Quicker Customer Service Comparison Shopping Productivity Gains

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall ADVANTAGES OF E-COMMERCE (Cont’d) Helps People Work Together Creates Knowledge Markets Promotes Information Sharing, Convenience and New Customer Control Swapping Goods and Services Allows High Product Customization

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall LIMITATIONS OF E-COMMERCE Security System and Data Integrity System Scalability Not Free-for-All Consumer Search

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall LIMITATIONS OF E-COMMERCE (Cont’d) Fulfillment Customer Relations Types of Products Corporate Vulnerability Blueprint Development Risk

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall STRATEGY IN E-COMMERCE Critical Success Factors for E-Commerce –Sound Strategy that has the support of top management –Clear Aim (long-term) –Promotion of Sell Cycle –Full Technology Utilization –Scalable and Integrated Business Process

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall SELL CYCLE IN E-COMMERCE Selling Process PhaseWhat You Want to Do AttractionAdvertising, Promotions ConversionEase of Use, Effective Presentation Service and SupportProduct Info/Status, Fulfillment PersonalizationSite Customization, Support SecurityTransaction, Authentication InfrastructureScalability, Availability, Hosting

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall Value Chains Defined by Michael Porter in his 1985 book “Competitive Advantage” A way for organizing the activities of a business so that each activity adds value (value-added activity) or productivity to the total operations of the business. Each activity is said to have a value proposition Firms that have identified and optimized their value chains will have Competitive advantage over those that have not.

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall PRIMARY ACTIVITIES Inbound Logistics –Supply line of business Operations –Conversion of raw materials into finished products –Center of value chain where value-added occurs Outbound Logistics –Storing, distribution and shipping of final product

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall PRIMARY ACTIVITIES (Cont’d) Marketing and Sales –Deals with ultimate customer Service –After-sale service to customer

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall SUPPORT ACTIVITIES Corporate Infrastructure –Backbone of business unit Human Resources –Matching the right people to the right job Technology Development –Product and business processes improvement Procurement –Prerequisite for production

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall VALUE CHAIN IN E- COMMERCE Image from

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall E-COMMERCE INTEGRATION ElementINTERNETEXTRANETINTRANET E-Commerce Type Business-to- Consumer Business-to- Business Business within Business AccessUnrestrictedRestricted SecurityMinimalFirewalls & Restricted Access Payment Method Credit CardPredefined Credit Agreement Within Business Charges

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall The Growth in B2B INDUSTRY % of Total Computing & Electronics$230.2$343.3$427.3$506.2$ % Motor Vehicles % Petrochemicals % Utilities % Paper & Office Products % Consumer Goods % Food % Construction % Pharmaceutical & Med Products % Industrial Equipment / Supplies % Shipping & Warehousing % Aerospace & Defense % Heavy Industry % TOTAL ,166.91,823.42, % Source: Forrester Research, Reported in Blackmon, Douglas, “Where the Money Is,” WSJ, April 17, 2000, p. R30.

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall SUPPLY CHAIN MANAGEMENT Reduces Cycle Times Raise Order Fulfillment Minimize Excess Inventory Improve Customer Service An advanced SCM systems is Lean Manufacturing –

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall INTRANET Low Development and Maintenance Costs Friendly Environment High Information Availability and Shareability Timely Information Easy Dissemination of Information

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall Other eCommerce types Business-to-Government B2G –Procurement GSA office –OMB contract –IRS Mobile Commerce –Wireless technologies –More in chap 7

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall Managerial Implications Given the challenges posed by today’s eCommerce and its potential, when it comes to success in this emerging field, it is people and managerial talent that matter. It is people with a vision of the future who know how to handle the speed of change. The person who figures out how to harness the collective genius of the organization will blow the competition away.

Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall For next week Read Chap Two –The Internet and the World Wide Web Assignment 1 –Answer Test Your Understanding questions on Page 31 of the text. (1-12) –Turn in a well formatted typed response sheet Not more than 3 pages! –Due Tuesday January 18 at start of class