1. E-Business Models The emphasis is on business in e-business Part 1 – B2C Adomas Svirskas Vilnius University October 2005

2. Adomas Svirskas, Vilnius University2 Agenda E-business is about business firstly Variety of options for the same single goal Business to Consumer (B2C) Business to Business (B2B) –Supply Chain –Hub and spoke –Many to many –E-Procurement Business to Government (B2G)

3. Adomas Svirskas, Vilnius University3 The Vision "In a few years' time, there will be no Internet companies - there will just be companies - and all companies that will operate in the future, will be Internet companies." Dr. Andrew Grove, Chairman, INTEL Corporation, September 20, 1999: http://www.intel.com/pressroom/archive/speeches/cn092 099.htm http://www.intel.com/pressroom/archive/speeches/cn092 099.htm

4. Adomas Svirskas, Vilnius University4 Putting the Business First Any business considering engaging into e- business must ask themselves: –How does the use of the Internet technologies fit into the overall business strategy? (Do we have a strategy anyway…?) –What business channels will benefit most from the technology? –How does the use of technology impact the bottom-line? –What are the new opportunities?

5. Adomas Svirskas, Vilnius University5 E-Business Strategy It is the key to e-business success It is not primarily about technology (although is informed by the latter) It outlines how the business will take advantage of the new environment It defines clear measurable goals (more customers/better service/new markets..) It maps out the ROI plan It is a journey, not a destination

6. Adomas Svirskas, Vilnius University6 Variety of the Options The goal is one: supporting business growth The options depend on: –Business size, industry sector, locale, partnerships, customer base and their demands –Readiness for e-business Awareness Executive support IT readiness –Investment potential and strategy –Availability of outside infrastructure, standards, tools

7. Adomas Svirskas, Vilnius University7 An Example Many customers would hardly make a purchase decision on an expensive complex product purely online However, they would definitely appreciate a possibility to track the progress of fulfillment of their order online Therefore, investment into clear and accurate online tracking is needed rather than into sophisticated online product configurator.

8. Adomas Svirskas, Vilnius University8 Business Website and e-mail Increases business visibility Improves product information accuracy and timeliness (sometimes this matters most) Allows to collect feedback and shape user communities (via forums) Improves support and cuts its costs Relatively simple and cheap from the technical standpoint

9. Adomas Svirskas, Vilnius University9 Using e-mail Dominant majority of businesses use it It is a very powerful marketing tool (when used with care) Choice of the audience and style matters most The trick is to make the customer to value the newsletters and product/service info Spam is walking fine line with the law

10. Adomas Svirskas, Vilnius University10 Tracking the Success and Impact Number of visitors E-visit profile: pages visited, time spent Visitor’s profile: origin, personal data (if possible) Reshaping and restructuring the website according to the findings Preparing the next step: from brochure- style website to orders online

11. Adomas Svirskas, Vilnius University11 Business to Consumer (B2C) An important category of e-business solutions allowing business transactions with consumers through the Internet Requires feasibility analysis: –B2C solutions of the competitors –Risk of ignoring B2C solution –New marketing opportunities –Investment needed to support business model

12. Adomas Svirskas, Vilnius University12 Business to Consumer (B2C) Involves: –Web Marketing, pre-sales support –E-Catalogue management –Campaigns, promotions, volume and loyalty discounts, gift vouchers… –Payment (reaches into B2B) –Order fulfillment, customer support (reaches into B2B) –Delivery logistics (reaches into B2B) –Inventory management (reaches into B2B) –Suppliers integration (reaches into B2B)

13. Adomas Svirskas, Vilnius University13 Business to Consumer (B2C) Success factors: –Quality of the solution User experience (Customer Relationship Management (CRM) domain) –Overall satisfaction –Trust Reliability Scalability Availability –Cost of the solution

14. Adomas Svirskas, Vilnius University14 Integrated B2C e-business [1]

15. Adomas Svirskas, Vilnius University15 E-Catalogue The face of any B2C solution Must be: –Efficient and accurate –Easy to navigate –Easy to manage and maintain –Scalable –Internationalized

16. Adomas Svirskas, Vilnius University16 CRM in B2C e-business E-CRM is quite different from conventional one E-Users are much more mobile, dynamic, demanding and loyalty is fragile – the competition is just few clicks away… Personalization matters Data mining helps to analyze the patterns and predict future trends

17. Adomas Svirskas, Vilnius University17 Order Placement This is one of the crucial steps of B2C The process should be as smooth for the consumer as possible, here is where the trust is being strengthened (provided that e-catalogue developed initial trust) Sales taxes, shipping fees should be clearly indicated Wish lists, persistent shopping carts do matter

18. Adomas Svirskas, Vilnius University18 Payment in B2C Very important and challenging step Security considerations: –Ensuring the payment mechanism is secure –Presenting it as trustworthy to the customer Links with financial institutions Payment mechanisms –Money transfer –Credit cards –Escrow services –Intermediaries (e.g. PayPal) Fraud prevention, Identity protection

19. Adomas Svirskas, Vilnius University19 Inventory Management The key is to keep inventories (hence costs) down yet ensure prompt fulfillment On-demand approach Inventory costs: –Costs to place purchase order/start production –Production/acquisition costs –Stocking costs –Costs of unfulfilled demant

20. Adomas Svirskas, Vilnius University20 Fulfillment and Delivery It is about arriving of the good intact and on time agreed during order placement An important trust building factor Involves: –Warehouse operation and pulling the goods –Packing of the goods –Operating/outsourcing delivery service –Tracking deliveries –Dealing with returns –Dealing with seasonal peaks

21. Adomas Svirskas, Vilnius University21 Customer service in B2C An important customer base and loyalty building tool Thorough and accurate product information Overall level of information – FAQ, forums, background material Professional handling of occurring problems

22. Adomas Svirskas, Vilnius University22 Conclusions on B2C B2C lifts retail business to a new level B2C is integrated mechanism of quite complex processes and should be viewed as such B2C must be aligned with overall business strategy B2C implementation prepares business to reach into B2B domain

23. Adomas Svirskas, Vilnius University23 References [1] USHER project http://www.usherproject.org.uk/ http://www.usherproject.org.uk/ [2] Kotok, A., Weber R.R. ebXML – The new global standard for doing business on the Internet