1. What is E-Business and does it matter
What is E-Business and does it matter? Definitions and Emerging E-Business Models
I. Joko Dewanto
Teknik Informatika - Fakultas Ilmu Komputer
University of Esa Unggul

2. What is E-Business? Where do you draw the line?
Software;
Book
Car
Mortgage
Measuring E-Business depends on how far you stretch the ‘rubber band’!
© Feng Li, 2006

3. What is E-Business?
E-Commerce – electronic transactions conducted by business partners (narrow definition)
E-Business: buying and selling, servicing customers, collaborating with business partners, and conducting electronic transactions within an organisations
Turban, Efraim, David King, Jae Lee and Dennis Viehland (2004) Electronic Commerce: A Managerial Perspective Pearson Prentice Hall, New Jersey
© Feng Li, 2006

4. What is E-Business? …2
E-Commerce as digitally enabled commercial transactions between and amongst organisations and individuals
E-Business refers primarily to the digital enablement of transactions and processes within a firm, involving only the information systems under the control of the firm
E-Business are those activities other than ‘buying and selling’ via electronic channels
Laudon, Kenneth C & Carol Guercio Traver (2003) E-Commerce: Business, technology and society. 2nd edition. Pearson Addison Wesley, Boston
© Feng Li, 2006

5. What is E-Business … 3
For this module, a broad definition of E-Business is adopted
It encompasses all internal and external electronically based activities and processes.
E-commerce is part of E-Business, which focuses on the electronic commercial transactions between and amongst organisations and individuals
© Feng Li, 2006

6. What is E-Business? … continued
‘E-business is all about time cycle, speed, globalization, enhanced productivity, reaching new customers and sharing knowledge across institutions for competitive advantage’
-- Lou Gerstner, ex CEO of IBM
© Feng Li, 2006

7. What is E-Business … continued.
Not just about dot com’s and Internet only companies
Transform existing businesses through the Internet and related technologies
Integration within and between organisations – break down barriers and boundaries
Enabling new possibilities – new ways of doing business - not possible in the past
Origin go back several decades
A wealth of knowledge already available - through large research programmes
© Feng Li, 2006

8. Dot Com Crash – End of E-Business?
Underlying rapid growth has never stopped – even during the dot com crash
The Web has become an increasingly important part of consumers' everyday lives - shopping, banking, amusing, education …
Part of mainstream business culture, fulfilling its promise as a medium that can connect consumers and enterprises and cut red tape from transactions
Pure plays versus multi-channels - Web sites are necessary for any business - even if the online arm loses money
E-Commerce still only a small section of the economy (e.g. e-commerce < 5% of retailing)– ‘big bang’ yet to come
Not the end – the fun has just started !
© Feng Li, 2006

9. E-Business: Classification
Business to Business (B2B)
Business to Consumers (B2C)
Consumer to Consumers (C2C)
Consumer to Business (C2B)
E-Government (B2G, C2G etc.)
Intra-Organisation E-Business
Others – P2P etc.
© Feng Li, 2006

10. Why E-Business? Why Now? Demand Pull – The New Economy
Information economy - Information content & labour – over 60%
New economics of information
Technological Push – the ‘ICTs Revolution’
Convergence of computing, telecom & media
Exponential growth of the Internet
Mobile communications
Rapid development of the Internet
Mass, public infrastructure
Individuality, interactivity, mobility & consumer experiences
Government Initiatives & Targets
Others …
© Feng Li, 2006

11. Context for E-Business
All industries became information-intensive
Information – and communication – are crucial to success of industrial & commercial operations
Fast growing ICTs & information industries  
Profound Impacts on what activities locate where, how territories administered, markets served, linkages maintained between customers & suppliers
Need for new strategies, business models & organisational designs
© Feng Li, 2006

12. E-Business Models E-Shops – web marketing or a shop (B2C)
E-Procurement – E-tendering & procurement of goods and services
E-Shopping Centres/E-Malls– a collection of E-shops
E-Auctions – E-implementation of bidding mechanisms
© Feng Li, 2006

13. E-Business Models .. continued
Virtual Communities – members with common interests
Collaboration Platforms – tools & infor. environment for members to collaborate
Third-Party Marketplaces – leaving web marketing to third party
Value-Chain Integrators
© Feng Li, 2006

14. E-Business Models .. continued
Value-Chain Service Providers – support part of value chain (e-logistics, e-payments)
Information Brokerage, Trust and other services – business information and consultancy; trusted third party services
Others (e-betting/gambling; syndication ……)
© Feng Li, 2006

15. Implications of E-Business: Fundamental and Pervasive transformation
New strategy & business models
New organisational designs
New inter-organisational relations
New work organisation and new ways of Working
Others …
© Feng Li, 2006

16. Organisational implications
Two ways to beat competition and succeed in the market:
Product/service innovations
Organisational/managerial innovations
Organisational innovations essential to efficiency and competitiveness
Internet enables new organisational designs/new ways of doing business – often in ways impossible in the past
Within AND between organisations – the entire value/supply chain/network
© Feng Li, 2006

17. De-Construction of Integrated Businesses
What does your company really do?
Customer relationship business - scope
Product innovation and commercialisation businesses - speed
Infrastructure management businesses - scale
Unnatural Bundle – everything operate at sub-optimal level
© Feng Li, 2006

18. Customer Relationship
Driven by scope economy
Customer service-oriented culture
Customisation – developing relationship with them and understand their needs
Offer as many products as possible to maximise selection for customers
Tailor bundles of products and services to capture a larger share of wallet
© Feng Li, 2006

19. Product Innovation & Commercialisation
Driven by speed – the faster the better
Using all possible distribution channels to reach customers
Organisational culture geared to attract and retain creative talents
Operations tailored to serve the needs of creative talents for breakthrough innovations
© Feng Li, 2006

20. Infrastructure Management
Driven by scale economy – pumping as many products through it as possible
Full utilization of facilities & low cost operations
Culture – cost reduction & standardisation
© Feng Li, 2006

21. Already Happening ... ‘Transformational outsourcing’
J.P. Morgan - IBM will take over most of the bank's computing operations - $5bn over 7 years
Ford spin off Visteon – computing on demand deal with IBM - $2bn over 10 years
Telecom Italia – HP will provide IT management services – worth 225 million euros, or about US$243 million over 5 years
Other functions – and entire business processes – increasingly being outsourced too
© Feng Li, 2006

22. Organisational Design: When is Virtual Virtuous?
Not all the smart people work for you - market gives you access to them
Internal capability vs. partners
Short-term vs. long-term
Autonomous vs. Systemic innovations
Integrated companies vs. SMEs
© Feng Li, 2006

23. Web/Cluster Strategy
Webs – clusters of companies consolidate around a particular technology
Examples – Intel/Microsoft; SAP’s integrated solutions;
Spread risk, increase flexibility, enhance innovation, reduce complexity
Conditions - technological standard & increasing returns
Shapers and adapters – choose your role
Grow market share vs. grow the pie
Unbundling & outsourcing
© Feng Li, 2006

24. Internet Banking: Cheap channel VS new business model?
Internet as a new cheap convenient distribution channel
New entrants challenge the integrated banking model
De-construction of the integrated banking processes
Future scenarios?
© Feng Li, 2006

25. Deconstruction of Telecom Value Networks
Boundaries increasingly eroded
Traditional business model may not longer be sustainable
Deconstruction of integrated value chains
The emergence of new value networks
Competing at multiple fronts
© Feng Li, 2006

26. E-Government and E-Public Services
‘After ecommerce and e-business, the next Internet revolution will be e-government’ The Economist, 28 June 2000
USA - $600billion annual procurement spending
EU – euro720billion combined
Big private sector companies typically achieve 20% saving by procuring online
Slashing purchasing and fulfilment cycles and lower admin costs by up to 75% and halve stocks
Potential to fundamentally change the way people relate to government!
© Feng Li, 2006

27. Modernizing government in the UK
Better government, better policy making, better responsiveness to what people want and better public services by reforming the machinery of government in the UK- especially through the use of ICTs – information age government
Electronic service delivery to join up service provision across departmental boundaries, break down silo based delivery networks and allow citizens to interact with government whenever they choose
Joined up working between different parts of government and provide new efficient and convenient ways for citizens and businesses to communicate with government
E-Government targets - making 100% of services available electronically by 2005 – almost achieved
© Feng Li, 2006

28. Emerging issues in E-Government
All existing research shows in the UK joint up government providing joint up services is not happening – yet?
Public services - People as citizens or customers
So far 85% all public sector IT projects are deemed to be failures (IBM worldwide head of government services)
Purposes of E-Government – stated and real
© Feng Li, 2006

29. Emerging issues in E-Government (2)
E-Government and the redefinition of power structure and the buy-in from key stakeholders
Strong resistance from those negatively affected
The practical feasibility of achieving joint up government ?
Potential Conflicts between strategic objectives
efficiency gains could be translated into reduced employment in certain sections of the public sector (as many as 1 in ,000!)
clash with other strategic objectives of the Government such as full employment – an issue that will need to be carefully addressed given that the public sectors are the biggest employers in many regions in the UK
© Feng Li, 2006

30. What Next ? Old established corporations will not disappear
The new energetic dot.com’s would not necessarily survive
A new class of firms would emerge
All organisations need to go through profound changes
Prahalad, C K & Venkat Ramaswamy (2004) The Future of Competition. Harvard Business School Press, Boston
© Feng Li, 2006

31. What is E-Business? How the Internet Transforms Organisations
Chapter 1. Introduction
Chapter 2. What is E-Business and Does It Still Matter?
Chapter 9. Emerging E-Business Models in the Network Economy
© Feng Li, 2006

32. Suggested Reading
Jelassi, Tawfik & Albrecht Enders (2005) Strategies for E-Business: Creating Value through Electronic and Mobile Commerce. Pearson Education Ltd, Harlow
Farhoomand, Ali (2005) Manageing (e)Business Transformation: A global perspective. Palgrave Macmillan, Basingstoke
Turban, Efraim, David King, Jae Lee and Dennis Viehland (2004) Electronic Commerce: A Managerial Perspective Pearson Prentice Hall, New Jersey
Laudon, Kenneth C & Carol Guercio Traver (2003) E-Commerce: Business, technology and society. 2nd edition. Pearson Addison Wesley, Boston
Chaffey, David (2002) E-Business and E-Commerce Management. Pearson Education Ltd, Harlow
Timmers, Paul (2000) Electronic Commerce: Strategies and Models for Business-to-Business Trading, Wiley, Chichester
Rappa, Michael (2004) Managing the Digital Enterprise. Especially chapter 5 - Business Models on the web.
100’s of new books on e-business and e-commerce …
© Feng Li, 2006

33. Suggested reading 2
Cabinet Office (2000) ‘e-governmnent-A strategic framework for public services in the Information Age.’ London: HMSO
Li, F (2003) Implementing E-government Strategy in Scotland: Current Situation and Emerging Issues. Journal of E-Commerce in Organisations 1 (2) April-June 2003:44-65
Cornford, J (2004) Understanding the Process of Implementing Electronic Local Government in England -
© Feng Li, 2006

34. Readings … 3
Hagel III, John and Marc Singer (1999) Net Worth: Shaping Markets When Customers Make the Rules. Harvard Business School Press, Boston (Chapter9)
Li, Feng (2002) Internet banking in the U.K.: From new distribution channel to new business models. The CAPCO Institute Journal of financial transformation.
Christensen, Clayton & Michael Raynor (2003) Innovator’s Solutions, Harvard Business School Press, Boston
(also Christensen’s earlier book on Innovators Dilemma and latest book Seeing what next?)
Zuboff, Shoshana & James Maxin (2004) The Support Economy. Allen Lane, London
Prahalad, C K & Venkat Ramaswamy (2004) The Future of Competition. Harvard Business School Press, Boston
Peters, Tom (2003) Re-Imagine! Dorling Kindersley, London
© Feng Li, 2006