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2. E-business assessment, regulations and trust by Phil Leifermann
PwC

3. Contents
PricewaterhouseCoopers is the world’s leading professional services organisation - drawing on the knowledge and skills of 155,000 people in 150 countries. We help our clients solve complex business problems and measurably enhance their ability to build value, manage risk and improve performance.
E-business services are an important aspect of our organisation.
Part 1 - What is e-business ?
Part 2 – E-business assessment
Part 3 - E-business regulations
Part 4 - E-business trust
Part 5 - Conclusion
PricewaterhouseCoopers

4. What is
e-business ?
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5. What is e-business ?
E-business is using electronic information to improve performance, create value and enable new relationships between business partners
E-commerce is
marketing, selling and
buying of products and
services via Internet

6. Internet users
500m
E-Business is improving business performance using electronic information technologies to connect value chains between businesses and customers
Users (millions)
110m
Source: IDC, 1999

7. Internet revenue
1,317b
E-Business is improving business performance using electronic information technologies to connect value chains between businesses and customers
USD (billions)
50b
Source: IDC, 1999

8. E-business in Indonesia
E-business has not yet fully come to Indonesia
Currently, lots of new e-business activity in Indonesia
E-business will come to Indonesia - it is only a matter of when ?

9. E-business assessment
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10. Assessment
E-business is changing way business is conducted around the world
Need to understand current e-business capability (measured against worldwide best practice)
Plan future in e-business

11. Use of e-business E-mail Web site
B2C (information only and / or transactions)
B2B

12. Adoption of e-business
Leaders and innovators (10%)
Early adopters (30%)
“Rest of the pack” (60%)

13. Degree of change to business model
Maturity model
Convergence
Transformation
Degree of change to business model
Integration
Presence
Enabler
Driver
Role of e-business

14. Maturity levels On-line access On-line business transactions
Integrated on-line business
Advanced on-line business
Full e-business

15. Domains E-business Tax Legal Security Performance Delivery management
and
operations
E-business
Strategy
Systems
and
technology
Organisation
and
competencies
Processes

16. Domains
Strategy - strategic planning necessary to take full advantage of e-business opportunities
Organisation and competencies - acquisition and management of new skills and competencies required of successful e- business enterprise
Processes - primary business processes in a generic value chain (a generic value chain links each of the business activities that add value to an organisation’s supply chain processes)

17. Domains
Systems and technology - software solutions and other technology that enable e-business
Delivery and operations - day-to-day workings of e-business
Security - security hardware, software and policies that support secure transactions and data in e-business
Tax - manage e-business tax exposure and improve operational efficiencies in regards to tax compliance

18. Domains
Legal - manage legal rights, obligations and potential liabilities
Performance management - plan, measure, monitor and control performance of e-business

19. Assessment
Integrate key areas of expertise essential to effective e-business
Benchmark current capabilities and readiness to move to next level
Identify additional e-business opportunities
Facilitate e-business planning efforts
Identify issues capable of compromising success in cyberspace

21. E-business regulations
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22. Need for regulations
E-business is a completely different way in which to transact ordinary business
E-business is global
E-business effectiveness depends on a regulatory environment that is both supportive and predictable

23. Issues for regulators Infrastructure and access Trade and tariffs
Data security
Intellectual property rights
Law and jurisdiction
Self regulation

24. Infrastructure and access
Consumer and business access to internet
Directly linked to broader telecommunications policies as internet relies on basic telecommunications technology
US trade representative - “supporting more competition in telecom markets globally is one of the single most important things we can do to ensure growth of e-business”

25. Infrastructure and access
Ease of internet access
Cost of internet access
Cumbersome and expensive access will result in lower acceptance
Infrastructure issues vary by country
In developing countries, issue is lack of access to computers and telephones

26. Computers (per 100)
E-Business is improving business performance using electronic information technologies to connect value chains between businesses and customers
Source: World Bank Development Report, 1998/99

27. Telephones lines (per 100)
E-Business is improving business performance using electronic information technologies to connect value chains between businesses and customers
Source: World Bank Development Report, 1998/99

28. Infrastructure and access
In developed countries where basic infrastructure is already mature, issue is congestion
In countries where telecommunications and other internet infrastructures are owned and administered by government, internet access issues have become mixed with debates about public monopolies, deregulation and pricing

29. Trade and tariffs
Few areas of international law are as well-developed as complex regime governing international trade - world’s trading nations have worked to create rules-based system controlling exchange of goods and services across borders
E-business raises host of new issues by changing basic concepts of international trade
Who trades ?
primarily limited to large multinational companies as it required global marketing, distribution and payment systems

30. Trade and tariffs new sellers new buyers
What is traded ? - goods and services, new category of goods, no physical delivery
Where does trade occur ? - place of order, dispatch, consumption or server locatation

31. Data security Major concern
Confidentiality, integrity and availability of data
Authentication
Firewalls
Public key infrastructure (PKI) / digital certificates
Encryption

32. Intellectual property rights
Established copyright, patent and trademark regulations
Piracy
Easy to reproduce some goods
Also customer information and “know how”

33. Law and jurisdiction Law of which country ?
Disputes heard in court system of which country ?
Inherent risk and potential litigation costs

34. Self regulation Policies to ensure integrity of e-business practices
“QUAD” (US, Canada, EU and Japan) - avoid cumbersome new regulations
Industry must demonstrate effective self regulation

35. Regulators World Trade Organisation (WTO)
Organisation for Economic Cooperation and Development (OECD)
International Chamber of Commerce (ICC)
Asia Pacific Economic Cooperation (APEC)
Governments and many others

36. Levels of involvement No action Awareness Passive involvement
Proactive involvement

37. E-business trust
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38. “On the Internet, no-one knows you’re a dog”
Trust
“On the Internet, no-one knows you’re a dog”

39. Trust Creating Trust Consumers must trust businesses
Businesses must trust each other
Boards of Directors must trust their e-business teams
Business units must trust their e-business systems

40. Trust
Temple of Trust
Effectiveness
Compliance
Reliability
Security

41. Security Authentication Firewalls Encryption
Public key infrastructure (PKI) / digital certificates

42. Reliability Business operations Performance and service management
Operational capability
Operational continuity
Business recovery

43. Effectiveness Consumer access Credit authorisation and billing
Fulfillment
Customer service
Returns, exchanges, refunds and credits

44. Compliance Business practice disclosure Transaction integrity
Information protection

45. Web trust

46. Business practice disclosure
Business Practices Disclosure
The entity discloses its business practices for electronic commerce transactions and executes transactions in accordance with its disclosed business practices.
Transaction Integrity
The entity maintains effective controls to provide reasonable assurance that customers’ orders placed using electronic commerce are completed and billed as agreed.
Information Protection
The entity maintains effective controls to provide reasonable assurance that private customer information obtained as a result of electronic commerce is protected from uses not related to the entity’s business.
Terms & conditions by which it does business:
time frame for fulfillment
time & process for backorders
normal method of delivery & options
payment terms & options
electronic settlement practices
canceling recurring charges
return practices, if any
Nature of the goods, information, or services
Where customers can obtain warranty and other service
Information to allow customers to file claims & complaints

47. Transaction integrity
Business Practices Disclosure
The entity discloses its business practices for electronic commerce transactions and executes transactions in accordance with its disclosed business practices.
Transaction Integrity
The entity maintains effective controls to provide reasonable assurance that customers’ orders placed using electronic commerce are completed and billed as agreed.
Information Protection
The entity maintains effective controls to provide reasonable assurance that private customer information obtained as a result of electronic commerce is protected from uses not related to the entity’s business.
Orders are checked for accuracy & completeness
Positive customer acknowledgement is received
Proper goods or services are provided
Back order & exceptions promptly communicated
Billing & settlement is done properly
Controls permit subsequent follow-up
Management has monitoring that ensure its:
business practice disclosures remain current,
transaction integrity controls remain effective,
non-compliance situations are promptly corrected

48. Information protection
Business Practices Disclosure
The entity discloses its business practices for electronic commerce transactions and executes transactions in accordance with its disclosed business practices.
Transaction Integrity
The entity maintains effective controls to provide reasonable assurance that customers’ orders placed using electronic commerce are completed and billed as agreed.
Information Protection
The entity maintains effective controls to provide reasonable assurance that private customer information obtained as a result of electronic commerce is protected from uses not related to the entity’s business.
Transmissions over the Internet are secure
Private customer information protected from outsiders
Systems protected from outside access
Customers can only perform certain functions
Private customer information is not intentionally disclosed to 3rd parties without customer permission and is used by employees only in ways associated with entity’s business
Customer’s computers or files are protected
Management has monitoring that ensure its:
information protection controls remain effective, and
non-compliance situations are promptly corrected

49. Conclusion
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50. E-business - a “new” world !!!
Minimise Hazards
Manage Uncertainties
Exploit Opportunities

51. Further information For further information, please contact:
Phil Leifermann
PricewaterhouseCoopers, Jakarta Indonesia
Phone: x. 6613
Fax:

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