Overview of electronic commerce Pertemuan 1-2 Mata kuliah: M Konsep E-Business Tahun: 2010

Bina Nusantara University 3 Learning Objective 1. Define electronic commerce (EC) and describe its various categories 2. Describe the content and framework EC 3. Describe the major type of EC transacction 4. Describe the Benefit EC 5. Describe the limitation of EC 6. Understand the forces that drive the widespread use of electronic commerce 7.Describe and discuss the changes that will be caused by electronic commerce 8.Discuss some major managerial issues regarding electronic commerce

Electronic Commerce is the process of buying, selling, transferring or exchanging product, services and / or information via computer networking. EC can also be defined from the following perspective : 1. Business Process 2. Service 3. Learning 4. Collaborative 5. Community

Benefit of E-Commerce Global Reach Cost Reduction Supply Chain improvement Lower Inventories

BENEFIT FOR ORGANIZATION Reduces the time between the outlay of capital and the receipt of products and services Supports business processes reengineering (BPR) efforts Lowers telecommunications cost - the Internet is much cheaper than value added networks (VANs)

BENEFIT FOR CUSTOMER Customers can receive relevant and detailed information in seconds, rather than in days or weeks Makes it possible to participate in virtual auctions Allows customers to interact with other customers in electronic communities and exchange ideas as well as compare experiences Electronic commerce facilitates competition, which results in substantial discounts.

Technological Limitation of EC Lack of Technology Insufficient bandwidth for telecommunication Software Development tools is evolving Non Technological Limitation Security and privacy concern Lack of trust Many legal and public issue

Pure Vs. Partial Electronic Commerce Three dimensions » the product (service) sold [physical / digital] » the process [physical / digital] » the delivery agent (or intermediary) [physical / digital] Traditional commerce » all dimensions are physical Pure EC » all dimensions are digital Partial EC » all other possibilities include a mix of digital and physical dimensions

A Framework for Electronic Commerce 9 Electronic Commerce Applications Stocks Jobs On-line banking Procurement and purchasing Malls On-line marketing and advertising Home shopping Auctions Travel On-line publishing People: Buyers, sellers, intermediaries, services, IS people, and management Public policy, legal, and privacy issues Technical standards for documents, security, and network protocols payment Organizations: Partners, competitors, associations, government services Infrastructure (1) Common business services infrastructure (security smart cards/authentication electronic payment, directories/catalogs) (2) Messaging and information distribution infrastructure (EDI, , Hyper Text Transfer Protocol) (3) Multimedia content and network publishing infrastructure (HTML, JAVA, World Wide Web, VRML) (4) Network infrastructure (Telecom, cable TV wireless, Internet) (VAN, WAN, LAN, Intranet, Extranet) (5) Interfacing infrastructure (The databases, customers, and applications) Management © Prentice Hall, 2000

Figure 1.2 shows that the EC applications are supported by infrastructures, and their implementation is dependent on four major areas (shown as supporting pillars) people, public policy, technical standards and protocols, and other organizations. The EC management coordinates the applications, infrastructures, and pillars. It also includes Internet marketing and advertisement.

The Driving Forces of Electronic Commerce The New World of Business Business pressures Organizational responses The role of Information Technology (including electronic commerce)

Major Business Pressures Market and economic pressures Societal and environmental pressures Technological pressures Strong competition Global economy Regional trade agreements (e.g. NAFTA) Extremely low labor cost in some countries Frequent and significant changes in markets Increased power of consumers Changing nature of workforce Government deregulation of banking and other services Shrinking government budgets subsides Increased importance of ethical and legal issues Increased social responsibility of organizations Rapid political changes Rapid technological obsolescence Increase innovations and new technologies Information overload Rapid decline in technology cost Vs. performance ratio

Business Process Reengineering  Reducing cycle time and time to market  Empowerment of employees and collaborative work  Knowledge management  Customer-focused approach  Business alliances — virtual corporation

Other Changes in the Workplace Transforming Organizations Work will change Technology learning Organizational learning Redefining Organization New product capabilities New business models

Question 1. Jelaskan perbedaan antara pure, partial dan traditional commerce dan berikan contohnya ? 2.Bagaimana kondisi atau karateristik dari product yang dijual yang lebih sesuai jika dijual dengan pure, partial atau traditional commerce 3.Berikan penjelasan tentang Framework Electronic commerce?

QUESTION FOR DISCUSSION Give an example of pure and partial Electronic Commerce for product and services? And what is the reason companies that use for different EC?

QUESTION 1. Explain the Definition of electronic commerce (EC) and describe its various categories 2. Explain the content and framework EC 3. Describe the major type of EC transacction 4. Describe the Benefit EC 5.Explain the limitation of EC 6. Explain the forces that drive the widespread use of electronic commerce 7. Describe and discuss the changes that will be caused by electronic commerce