Transcript eBusiness – From Place to Space in the 21st Century

eBusiness
From Marketplace to Marketspace
Sherif Kamel
The American University in Cairo
Copyright © 2004 Sherif Kamel
From the Old to the New World
[1990]
Old World
Supply-Driven
[2000]
New World
Customer-Led
[2010]
“The transition from the OLD WORLD of business management to the
NEW WORLD of eCustomers is unique. Before 2000, companies pushed
products through the channel to waiting customers. After 2000, customers
pull products and services through on demand. By 2010, most buyers will
be connected, completing the customer-led revolution”.
Copyright © 2004 Sherif Kamel
What is the Internet Doing?
 Network power
 Everyone is potentially connected to everyone else
 Transparency and direct communication
 Information access is rapid, open and direct
 Fast feedback, easy protest
 Competitors can become partners
 Constant change and reliance on new knowledge
 Fierce competition for talent with the new skills
 Large audiences and crowd behavior
 Messages reach wider audience sharing information
dissemination
Source: Rosabeth et al, 2001
Copyright © 2004 Sherif Kamel
But you need to be careful because…
 The Internet can greatly empower and connect
people but it can also isolate and
marginalize them
 The Internet can enable user communities to
form and grow but it can also use them to
attack and deny
 The Internet can help build businesses and
communities but it can also destroy them
Source: Rosabeth et al, 2001
Copyright © 2004 Sherif Kamel
Managing Information…
do business
study and
do research
CONTRIBUTE
TO OUR SOCIETY
Copyright © 2004 Sherif Kamel
PLAN FOR
THE FUTURE
educate
our children
entertain
ourselves
Global Trends
 Global competition
 Consumer satisfaction and customer service
orientation
 From physical to intellectual capital
 Massive investments in human resources
 Information intensive products and services
 Moving from the marketplace to the
marketspace
Copyright © 2004 Sherif Kamel
More Trends
Competing in time
From broadcast to one-to-one marketing
Online society
Shift of wealth from natural resources (oil)
to intellectual capital (S/W, information,
knowledge).
 Information and communications
e®volution
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Copyright © 2004 Sherif Kamel
Global Trends
By 2005
eBusiness
25% of World Trade
Worldwide Distribution
Unequal
Source: UN Conference on Trade and Development, 1999
Copyright © 2004 Sherif Kamel
Digital Divide
250000
200000
150000
100000
50000
0
1995
1998
Western Europe (000)
Middle East/Africa (000)
Copyright © 2004 Sherif Kamel
2000
2005
Source: Computer Industry Almanac, 2003
Facts and Figures
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50% of world’s population have never used a telephone.
4 billion+ people do not have a phone.
60 million people currently on a waiting list.
230 million PCs manufactured.
75% of traffic on Internet is WWW
2.7 million Websites established “June 2004”
470 million Web pages (+ “dark info”)
1600%+ traffic growth every year
9600+ ISPs worldwide (5100+ in U.S.)
Source: Forrester Research, 2004
Copyright © 2004 Sherif Kamel
Classical Barriers
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Lack of awareness of added value
Lack of data security/consumer protection
Lack of critical mass
Slow growth of Internet penetration
Low per capita income/credit card usage
Poor logistics and fulfillment services
IPR’s (Copyrights/Patents/Trademarks)
Government-Private Sector “Win-Win formula”
Cost of service
Social, psychological and cultural issues
Language barrier
Copyright © 2004 Sherif Kamel
eBusiness Value Added
eBusiness
improves
eBusiness
changes
eBusiness
redefines
Product promotion
New sales channels
Direct cost savings
Reduced cycle time
Customer service
Brand/Corporate image
Technology learning
Organizational learning
Changing nature of work
New product capabilities
New business models
Copyright © 2004 Sherif Kamel
Shifts in the Marketplace to
Marketspace
 From mass marketing and advertisement
 To target, one-to-one interactive mechanism
 From monologue
 To dialogue
 From paper catalog
 To electronic catalogs
 From mass production
 To mass customization
 From Segmentation
 To communities
Copyright © 2004 Sherif Kamel
Shifts in the Marketplace to
Marketspace
 From One-to-many communication model
 To Many-to-many
 From supply-side thinking
 To demand-side thinking
 From customer as a target
 To customer as a partner
 From physical products and services
 To digital products and services
 From intermediation
 To infomediation
Copyright © 2004 Sherif Kamel
How many people online?
World Total
605.60 Million
USA/Canada
182.67 Million
Europe
190.91 Million Growth rate 32%
Asia Pacific
187.24 Million Growth rate 39%
Latin America
33.35 Million
Growth rate 48%
Africa
6.31 Million
Growth rate 48%
Middle East
5.12 Million
Growth rate 61%
Growth rate 14%
Source: www.nua.ie June 2004
Copyright © 2004 Sherif Kamel
Digital divide widening between
countries
 ITU reports that the digital divide between
developed and developing countries is growing.
 This refers to the availability and quantity and
quality of Internet access in various countries.
 In developing nations standard telephony has
improved to 1 telephone to 100 inhabitants as
compared to 74 in developed nations.
Source: www.nua.ie December 2002
Copyright © 2004 Sherif Kamel
Whose responsibility is it?
 The society
 Businesses
 The government
 Internet access to all schools [private and public].
 Providing public access to the Internet through public
libraries.
 Community access program
 free public access to the Internet in public spaces
 Educators and trainers
Copyright © 2004 Sherif Kamel
The GloCalization Strategy
 Technology transfer and adaptation should cater to
the local needs, conditions, values, norms, and
cultures to facilitate the adoption, diffusion and
adaptation processes.
Copyright © 2004 Sherif Kamel
Dot.com Communities
 The online community is one the 3 Cs
associated with eBusiness success and
diffusion:
 Community
 Content
 Commerce
Source: Rosabeth et al, 2001
Copyright © 2004 Sherif Kamel
Implications of eBusiness
 Economics (number of Internet users,
number of ISPs and Internet usage)
 Technical (bandwidth)
 Cultural and Social (local contents)
Copyright © 2004 Sherif Kamel
eBusiness Defined
 It is the online digital business transactions
such as buying and selling of information,
products, and services.
 It is the business vehicle of the 21st century.
 It is the new societal e®volution after
agriculture, industrial and information
technology.
Copyright © 2004 Sherif Kamel
eBusiness Defined version 2
 eBusiness is…
 the exchange of digitalized information between
parties
 technology-enabled
 technology-mediated
 a reflection of the intra and inter-organizational
activities
Copyright © 2004 Sherif Kamel
Rules of the New Economy
 [The Internet] is global. It favors intangible
things – ideas, information, relationships
and it is intensively interlinked.
Kevin Kelly
Copyright © 2004 Sherif Kamel
eBusiness Today
1 billions+ by December 2005
Comprising a global network of 65,000+ computer networks
Fastest growing USE of the Internet is WWW
3% of global GNP
Faster, easier, cheaper, wider, …..simply better in the
marketspace
 Goods and services traded between companies from 8 billion
US dollars in 1998 to 327 billion US dollars in 2002
 By 2006, it is expected that eBusiness will represent about
18% of worldwide business2business and retail transactions
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Source: Computer Industry Almanac, 2003
Copyright © 2004 Sherif Kamel
Building Blocks
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People/Humanware “knowledge”
Database/Infostructure “information”
Telecommunications “technology”
Information providers “facilitation”
Communities/Beneficiaries “user”
Copyright © 2004 Sherif Kamel
eBusiness Models
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Business2business
Business2consumer
Business2government
Consumer2consumer
Copyright © 2004 Sherif Kamel
eBusiness Models
Business originating
from...
Business
And selling
to...
Consumers
Copyright © 2004 Sherif Kamel
Business
Consumers
B2B
C2B
(Freemarket,
Covisint)
B2C
(Amazon.com,
Staples.com,
Yahoo.com)
(Training.com)
C2C
(google.com,
Monster.com)
Objective of the Business Model
Where will the
business
compete?
How will the
business win?
Source: Marketspace, 2002
Copyright © 2004 Sherif Kamel
Components of a Business Model
Value Cluster
Marketspace Offering
• Specify the value
proposition or the value
cluster for the business
• Articulate the online
product, service and
information offer
Resource System
• Define how the company
needs to align its resources
to deliver the value
proposition
Financial Model
• Define and select the most
appropriate revenue model
to pursue
Source: Marketspace, 2002
Copyright © 2004 Sherif Kamel
How eBusiness is different from
Business?
1.
2.
3.
4.
Core Strategic Decisions Are Technology-Based
Digital businesses cannot separate technology choices from the
strategic decision-making process
Real-Time Competitive Responsiveness
Speed is becoming increasingly important as a means to increase
differentiation as well as to simulate competitors
24/7 Access
Consumers expect to be able to constantly access a business’s online
storefront, forcing businesses to adjust their level of responsiveness
(both strategic and tactical)
Technology-Based Consumer Interface
Screen-to-face customer interaction has increased the importance of
capturing and delivering a positive customer experience
Copyright © 2004 Sherif Kamel
How eBusiness is different from
Business?
5.
6.
7.
Customer in Control of the Interaction
Technology-based interfaces limit the company’s influence on
the buying process and give the customer more control of the
interaction
Increased Knowledge of Customer Behavior
A technology-based interface, however, gives the company the
opportunity to more accurately track consumer behavior
Networked Economics and Positive Feedback
Networked economics and positive feedback can allow
“increasing returns”
Copyright © 2004 Sherif Kamel
eBusiness Decision Making Process
What unique
benefits should
I provide?
Which
customers
should I target?
How do I
communicate
with customers?
How can I provide
a compelling
online experience?
How should I
structure the
organization?
New eBusiness
Who should be
my partners?
What metrics
should be used
to track
performance?
Copyright © 2004 Sherif Kamel
How will the
business create
shareholder
value?
7 Cs of Customer Interface
1. Context [website’s layout and design].
2. Commerce [website’s capability to
enable commercial transactions.
3. Content [text, sound and video that
websites contain].
4. Connection [degree website is linked to
other sites].
Copyright © 2004 Sherif Kamel
7 Cs of Customer Interface
5. Community [The ways sites enable userto-user communication].
6. Customization [Website’s ability to selftailor to different users or to allow
personalization].
7. Communication [The ways sites enable
site-to-user communication or two-way
communication].
Copyright © 2004 Sherif Kamel
Information Highway Defined
 An infra and info structure which enables,
energizes and empowers networking of
business and people by providing value
added services.
Copyright © 2004 Sherif Kamel
eBusiness Applications
Financial Services
Insurance
Banking
Brokerage
Currency Trading
Education & Training
Knowledge Acquisition
Open University
Distance Learning
Copyright © 2004 Sherif Kamel
Electronic Shopping
Retailing Books
Computers Appliances
Travel
Music
Information/Media
Information Dissemination
Electronic Books
News Services
Driving Forces of eBusiness
 There is a need to understand today’s global
forces and organizational environment.
 The new world of business “Business is not as
usual”.
 Assessing the business drivers and business
pressures.
Copyright © 2004 Sherif Kamel
Business Drivers and Pressures
eBusiness
Any place, any time
anyway
BPR
Cycle time,
Empowerment,
Collaborative work,
Mass customization,
Restructuring,
Business Alliance
Joint Ventures
Virtual Corporations
The
Organization
Strategic Systems
Strategic Information
Systems
Copyright © 2004 Sherif Kamel
Continuous
Improvement
Improved productivity,
Improved DM, JIT, TQM
Managing information,
Change management,
The Networked World
Established Organizations
Total Market
Online
Organizations
eBusiness
Marketspace
Copyright © 2004 Sherif Kamel
eConsortium
Tommorrowland
 Whether old economy or new economy, the
rules still apply.
 No brand wins without a defensible, distinct brand
positioning that adds value for the customer and is
defensible.
 No company wins unless the math works, delivering
earnings growth and increasing shareholder value.
Source: Jeanne Jackson, walmart.com
Copyright © 2004 Sherif Kamel
Rules of the New Economy
to e or not to be
Get Fast
or Get Lost
Bigger is better
Intuition
vs. Analysis
Rules!
No Rules!
Copyright © 2004 Sherif Kamel
Rules or no Rules….www.wimbledon.com
Copyright © 2004 Sherif Kamel
Rules or no Rules….www.wimbeldon.com
Copyright © 2004 Sherif Kamel
Road-Map for Change
 Investment in human resources (training and
capacity development)
 Awareness creation and readiness (value
proposition)
 Public and widespread participation (accessibility to
computing and the Internet)
 Creation of a favorable eCommerce environment
(infrastructure)
Copyright © 2004 Sherif Kamel
Action Agenda
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Identifying the opportunities and challenges
Strategic Planning
Building the Infrastructure/Infostructure
Investment in Human Resources
Re-engineering the Society
The Win-Win Formula: “Business-Government”
Copyright © 2004 Sherif Kamel
Conclusion
Innovative technologies will create many
great and opportunities for growth.
Societal information needs are growing at unprecedented rates,
integrated IT solutions will enable organizations to address
human resource issues of the 21st century and help people
build…
...a smarter community...
...a smarter society, and...
...a smarter world...
Copyright © 2004 Sherif Kamel