1. Chapter 6 E-Commerce

2. Agenda What is E-Commerce? Business to Business Business to Customer Business to employee Infrastructure Problems

3. What is E-Commerce? “Electronic commerce is the exchange of products, services, information, or money with the support of computers and networks. It is business done on- line.”

4. Terminology From narrowest to broadest: –E-Shopping –E-Business –E-Commerce –E-Economy –E-Culture

5. Types of E-Commerce Business to Business –80% of dollar volume –$7.29 trillion by 2002 Business to Customer –20% of dollar volume –$10 billion by 2002

6. Benefits Improve internal operations Decrease operating expenses Eliminate middlemen

7. Internal Operations Smaller inventory JIT manufacturing Customize products Automatic billing Electronic collections

8. Operating expenses Lower overhead –Location is irrelevant Eliminate paperwork Reduce cycle time Produce greater variety at the same cost

9. Middlemen Eliminate transfer costs Only used when adding value to product or service –Travel Agent? –Stock Broker? –Retail Store?

10. Amazon.com On-line book-store –Expanding services No physical plant No inventory Negative asset intensity –Customer pays for books (which they don’t have) up front

11. Problems Data & system incompatibility Privacy Bandwith Cybercrime

12. Data & System Incompatibility Information glut Slow to find anything –No standards –No search content consistency Delivery structure: one to one (customer) not one to many (wholesale)

13. Bandwith Twisted copper wire –Analog Reverting to –Fiber optics –Satellites –Digitization

14. Cybercrime Credit cards Electronic money Authentication

15. Agenda What is E-Commerce? Business to Business Business to Customer Business to employee Infrastructure Problems

16. Channels Internet Extranet Private networks Electronic data interchange (EDI)

17. Benefits Internal process Business reengineering Enterprise model Alliance

18. Internal Processes Reduce paper output Improve accuracy Increase throughput –Errorless transactions input per day

19. Reengineering Reduce cycle time –Order to customer receipt Reduce in labor costs Reduce open accounts-receivable days –Cash flow

20. Enterprise Models Increase productivity Increase cash flow Increase product quality Increase customer service and satisfaction

21. Alliances Increase efficient Increase market share Increase profitability

22. Agenda What is E-Commerce? Business to Business Business to Customer Business to employee Infrastructure Problems

23. Uses Direct sales –Product –Service –Information Brand enhancement Cross sales

24. Know You’re There Critical mass Internet customer growth Off Internet advertising –TV commercials –Magazines

25. Finding You Gateway ads (AOL) Search engines Portal sites –Major advertisers

26. Holding attention “3 click” rule Site thickness –Chat rooms –Frequent ask question page –Dark page –Telephone no. Convenient navigation path

27. Return Next Time Satisfaction with first time Offering something new for next visit

28. Attributes of an Offer S. Davis and C. Meyer, Blur (Warner Books, 1999) Products and services are blending (blurring) Result is an “offer” Authors list 10 attributes of a successful offer in future

29. Offer Attributes Anytime Real time Online Interactive Anyplace

30. Offer Attributes Learning Anticipating Filtering Customizing Upgrading

31. Agenda What is E-Commerce? Business to Business Business to Customer Business to employee Infrastructure Problems

32. Intranet Usages –E-mail –Workflow –Education –Communication –Collaboration

33. Benefits Productivity Cost Knowledge Convenient

34. Agenda What is E-Commerce? Business to Business Business to Customer Business to employee Infrastructure Problems

35. Infrastructure Networks Web servers Supporting tools –Tracking software, database connectivity, electronic form, on-line discussion group, etc. Internet access components –Protocols, browser Web page design Transaction processing system

36. Agenda What is E-Commerce? Business to Business Business to Customer Business to Employee Infrastructure Problems

37. Problems - Payment Security Privacy Micropayment Inconvenience Imcompatibility

38. Countermeasures Encryption & decryption Private key & public key Digital signature Electronic certificates Secure electronic transaction protocol (SET)

39. Points to Remember What is E-Commerce? Business to Business Business to Customer Business to Employee Infrastructure Problems

40. Discussion Questions What are the impacts of e-commerce on the issues of human, social, and legal? Does your organization have a e- commerce? What type? What will it take for the general public (or you) to feel reasonably comfortable with using credit cards over the Internet?

41. Discussion Questions What is the future of e-business? What is the future of e-education?

42. Assignment Review technology guides 1,2,4 & chapters 1- 6 Read chapter 7 Exam 1 Group Assignment Research paper