Transcript EB2004

1. Overview of Electronic Business
Dr. CK Farn
Department of Information Management
NCU
2005
Dr. CK Farn, NCU
1
The Changing World
Where do you shop
10 years ago
Today
How do you get service from banks?
Business size, before
Business size, now
Dr. CK Farn, NCU
2
The impact of IT on businesses
IT-enabled business operations
IT-centered business operations
Visibility, access, control, …
Dr. CK Farn, NCU
3
Business Applications of IT
IT innovation
Internet
1995
Telecomms
Database
Integration
Computer
Data
Processing
DP/EDP
50s
Data
Analysis
MIS
Decision
Support
DSS/EIS
Online
Txn
OLTP
70s
80s
60s
Decision
Models
Production,
Mgt Acct.
EC
ERP
90s
EB
00s
BPR
Concept Innovation
Dr. CK Farn, NCU
4
Major Determinants of Modern
Businesses
Technological Innovations
Globalization
Dr. CK Farn, NCU
5
Evolution of Technology
What around you has been there
for over a century?
Dr. CK Farn, NCU
0 AD
IT
Bronze
Ceramic
Stone tools
2K BC
Transportation
Power
Printing
Paper
Iron
Inventions
Millions of years ago
2K AD
6
Technological Innovations
Transportation and machines
Speed up movements of goods
Reduce production costs
Computers and communications
Efficient processing and movement of information
Visibility and access
New Concepts: Do the impossible things
Lifting of existing constraints
What “Values” do your company offers?
Dr. CK Farn, NCU
7
Business Environments
Intra-Business
Operations
Suppliers
Long term relationship
One-off relationship
Customers
Business customers
End consumers
Dr. CK Farn, NCU
8
Electronic Commerce
Selling to consumers?
On-line shopping, e-tailing
Auction
Online services
Doing business electronically?
Business relationships
Buying, selling and collaborating
Dr. CK Farn, NCU
9
US B2C eC Market Size
Dr. CK Farn, NCU
10
US B2B eC Market Size
Dr. CK Farn, NCU
11
US EC Market Growth
$1,400
$1,200
Billion US$
$1,000
$800
B2C
$600
B2B
$400
$200
$0
2000 2001
2002 2003
2004 2005
Sources： eMarketer, February 2002Source: eMarketer, April 2003
Dr. CK Farn, NCU
12
Wal-Mart—A New Way to Compete
The Problem
US-based, discount store
Expanded to number one in the world in the
90’s, beat K-Mart
Critical success factors
Price competitiveness
Adequate
Efficient IT-based supply chain activities
Extremely lean store inventory
Dr. CK Farn, NCU
13
Traditional Order Fulfillment Model
Price
Negotiation
Head
Quarter
Supplier
Order
Delivery
Distribution
Center
Complicated
Wholesale
structure
Problems
Inventory
level still high
Out of stock
Delivery
Order
Stock keeping
Store W/H
Resolve
Store Front
Replenish
Dr. CK Farn, NCU
14
Continuous replenishment
Price
Negotiation
Supplier
Delivery
Order
Opportunity
HQ
Delivery
Instructions
D.C.
Continuous
Replenishment
POS
Sales
informatiom
賣場
Dr. CK Farn, NCU
IT-enabled
visibility
Innovative order
fulfillment
scheme
Minimal
inventory
15
Wal-Mart Special Issues
CRP (continuous replenishment program) helps
Wal-Mart links its front-end POS systems with its
head quarters, and increased visibility
Additional process innovations
Cross-docking
Collaborative replenishment by suppliers
Provide suppliers with necessary information, even
aggregate information of their competitors,
encourage competition
Elimination of inventory and logistic costs
Dr. CK Farn, NCU
16
Wal-Mart (cont.)
The Results
As of 2002, #1 enterprise in the world
Largest employer in 21 states
Employed more workers than US defense
force
2001
Wal-mart 3,200stores/ 1000 supercenter/ gross21%/ profit-5% (220Bil sales)
K-mart 2,100stores/ 750 supercenter/ gross-21%
profit-1.3% (35Bil sales, 1/6 of Wal-mart)
Dr. CK Farn, NCU
17
Wal-Mart (cont.)
What can we learn…
IT-enabled visibility improvement
Paradigm shift in business model
Process innovation counts!
Continuous innovation in processes
Dr. CK Farn, NCU
18
The Dimensions of Electronic
Commerce
Dr. CK Farn, NCU
19
Electronic Commerce: Definitions and
Concepts (cont.)
e-business: a broader definition of EC,
which includes:
buying and selling of goods and services
servicing customers
collaborating with business partners
conducting electronic transactions within an
organization
Dr. CK Farn, NCU
20
eB and eC (in this book)
IT/IS
eC
EB
In other books, they are used interchangably
Dr. CK Farn, NCU
21
Electronic Commerce: Definitions and
Concepts (cont.)
Pure vs. Partial EC
depends upon the degree
of digitization (the
transformation from
physical to digital) of:
– the product (service) sold;
– the process; and for
– the delivery agent (or
digital intermediary)
Brick-and-Mortar
organizations are oldeconomy organizations
(corporations) that
perform most of their
business off-line, selling
physical products by
means of physical agents
Dr. CK Farn, NCU
22
Electronic Commerce: Definitions and
Concepts (cont.)
Virtual (pure-play)
organizations conduct
their business activities
solely online
Click-and-mortar
organizations conduct
some EC activities, but
do their primary business
in the physical world
Electronic market (emarketplace) online
marketplace where
buyers and sellers meet
to exchange goods,
services, money, or
information
Dr. CK Farn, NCU
23
Electronic Commerce: Definitions and
Concepts (cont.)
Interorganizational
information systems
(IOSs) allow routine
transaction processing
and information flow
between two or more
organizations
Intraorganizational
information systems
enable EC activities to
go on within individual
organizations
Dr. CK Farn, NCU
24
EC Framework
EC applications are supported by
infrastructure and by five support areas:
People
Public policy
Marketing and advertising
Support services
Business partnerships
Dr. CK Farn, NCU
25
Classification of EC by Transactions
or Interactions
business-to-consumer (B2C) :
online transactions are made between
businesses and individual consumers
business-to-business (B2B):
businesses make online transactions with
other businesses
e-tailing:
online retailing, usually B2C
Dr. CK Farn, NCU
26
Classification of EC by Transactions
or Interactions (cont.)
business-to-business-to-consumer (B2B2C):
e-commerce model in which a business
provides some product or service to a client
business that maintains its own customers
consumer-to-business (C2B):
e-commerce model in which individuals use
the Internet to sell products or services to
organizations or individuals seek sellers to
bid on products or services they need
Dr. CK Farn, NCU
27
Classification of EC by Transactions
or Interactions (cont.)
consumer-to-consumer (C2C):
e-commerce model in which consumers sell
directly to other consumers
peer-to-peer (P2P):
technology that enables networked peer
computers to share data and processing with
each other directly; can be used in C2C, B2B,
and B2C e-commerce
Dr. CK Farn, NCU
28
Classification of EC by Transactions
or Interactions (cont.)
mobile commerce (m-commerce):
e-commerce transactions and activities
conducted in a wireless environment
location-based commerce (l-commerce):
m-commerce transactions targeted to
individuals in specific locations, at specific
times
Dr. CK Farn, NCU
29
Classification of EC by Transactions
or Interactions (cont.)
intrabusiness EC:
e-commerce category that includes all internal
organizational activities that involve the exchange of
goods, services, or information among various units
and individuals in an organization
business-to-employees (B2E):
e-commerce model in which an organization delivers
services, information, or products to its individual
employees
Dr. CK Farn, NCU
30
Classification of EC by Transactions
or Interactions (cont.)
collaborative commerce (c-commerce):
e-commerce model in which individuals or groups
communicate or collaborate online
e-learning:
the online delivery of information for purposes of
training or education
exchange (electronic):
a public electronic market with many buyers and
sellers
Dr. CK Farn, NCU
31
Classification of EC by Transactions
or Interactions (cont.)
exchange-to-exchange (E2E):
e-commerce model in which electronic
exchanges formally connect to one another
the purpose of exchanging information
e-government:
e-commerce model in which a government
entity buys or provides goods, services, or
information to businesses or individual
citizens
Dr. CK Farn, NCU
32
The Future of EC
2004—total online shopping and B2B transactions in
the US between $3 to $7 trillion by 2008:
number of Internet users worldwide should reach 750
million
50 percent of Internet users will shop
EC growth will come from:
B2C
B2B
e-government
e-learning
B2E
c-commerce
Dr. CK Farn, NCU
33
Benefits of EC
Benefits to organizations
Global reach
Cost reduction
Supply chain improvements
Extended hours: 24/7/365
Customization
New business models
Vendors’ specialization
Rapid time-to-market
Lower communication costs
Efficient procurement
Improved customer
relations
Up-to-date company
material
No city business permits
and fees
Other benefits
Dr. CK Farn, NCU
34
Benefits of EC (cont.)
Benefits to consumers
Ubiquity
More products and
services
Cheaper products and
services
Instant delivery
Information
availability
Participation in
auctions
Electronic
communities
“Get it your way”
No sales tax
Dr. CK Farn, NCU
35
Benefits of EC (cont.)
Benefits to society
Telecommuting
Higher standard of
living
Hope for the poor
Availability of
public services
Dr. CK Farn, NCU
36
Limitations of EC
Dr. CK Farn, NCU
37
Barriers of EC
Security
Trust and risk
Lack of qualified
personnel
Lack of business
models
Culture
User authentication
and lack of public
key infrastructure
Organization
Fraud
Slow navigation on
the Internet
Legal issues
Dr. CK Farn, NCU
38
The Digital Revolution
Digital economy: An economy that is
based on digital technologies, including
digital communication networks,
computers, software, and other related
information technologies; also called the
Internet economy, the new economy, or the
Web economy
Dr. CK Farn, NCU
39
The Digital Revolution (cont.)
A global platform over which people and
organizations interact, communicate, collaborate,
and search for information
Includes the following characteristics:
A vast array of digitizable products
Consumers and firms conducting financial
transactions digitally
Microprocessors and networking capabilities
embedded in physical goods
Dr. CK Farn, NCU
40
New Business Environment
Customers are becoming more powerful
Created due to advances in science
occurring at an accelerated rate
Results in more and more technology
Rapid growth in technology results in a
large variety of more complex systems
Dr. CK Farn, NCU
41
New Business
Environment (cont.)
Characteristics in the business environment
A more turbulent environment with more business
problems and opportunities
Stronger competition
Need for organizations to make decisions more
frequently
A larger scope for decisions because more factors
More information and/or knowledge needed for
making decisions
Dr. CK Farn, NCU
42