Transcript Chapter 8: The Web-Enabled Enterprise Oz (5th edition) Uniqueness of Web-Enabled Commerce        The Web provides a universal standard Enables seamless integration of information exchanges  Within.

Chapter 8: The Web-Enabled
Enterprise
Oz (5th edition)
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Uniqueness of Web-Enabled Commerce
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The Web provides a universal standard
Enables seamless integration of information
exchanges
 Within the business
 Between business and customers/suppliers
Unbundling of products and product info
Reductions in search costs for both buyer and
seller
Information asymmetry for buyers
Richness and reach
New business models (discussed later)
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Web Technologies
(all but the last are available for free)
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HTTP
HTML and XML
File transfer protocol (FTP)
RSS
Blogs
Podcasting
Instant messaging
Cookies
Proprietary technologies
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HTTP, HTML, and XML
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Hypertext Transfer Protocol (HTTP) is the protocol used to
transfer and download Web information. HTTPS is HTTP
with encryption.
 Uniform Resource Locator (URL) is a literal address
given to a Web server that corresponds to the IP address
 http://www.winthrop.edu/dacus/resources/howdo.htm
Hypertext Markup Language (HTML) is the language for
creating Web pages viewable with a Web browser. HTML
determines the look and structure of Web pages.
Extensible Markup Language (XML) is used to convey
meaning or content to data.
 HTML
 <font size =“2”>Oz enterprises, Ltd.</font>
 <b>610-555-1234</b>
 XML
 <company name>Oz Enterprises, Ltd</company
name>
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 <telephone>610-555-1234</telephone>
FTP, RSS, and Blogs
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FTP (file transfer protocol) is a common way of transmitting
files from one computer to another. You use this when you
download files are attach files to an email.
RSS (rich site summary) is a family of XML file formats. An
RSS service is installed on a site to enable users to check
updates to the site. Users can also instruct a Web site with
RSS to automatically send new information (often used on
news Websites).
A blog (contraction of “Web log”) is a Web page that invites
visitors to post opinions and images on a particular topic.
Blogs usually have links to sites of interest.
 Trackback feature
 Commercial implications of blogs
 Advertising
 Market research
 Sample blog sites
 www.commonsenseblog.org
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Podcasting and Instant Messaging
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Podcasting is like blogging but enables users to post sound
on a Web site so that people can download it.
 Users can subscribe to a podcast site that uses RSS and
be notified of new audio files
 Files are usually in an MP3 format.
 Business uses
 Time shifted broadcast of tv/radio programs
(www.abc.com)
 Deliver lessons to remote students
 New musicians (garageband.com); has RSS
Instant messaging (IM) is a service that offers users the
ability to determine whether other persons using the
service are online. Users can do this in groups (chat rooms)
or with one person. Some applications permit video
conferencing and FTP.
 AOL Instant Messenger, MSN Messenger
 Used in business for customers to chat with sales rep
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Cookies
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Cookies
 Small files a Web site places on a visitor's hard
drive so the site can retrieve information later
 Cookie contains a unique identifier and data
collected from prior visits
Use of cookies
 Convenience for users
 Some cookies are used by third parties
contracted by a business Web site (e.g.,
DoubleClick)
 Clickstream tracking
 Spyware includes cookies and other
techniques that are installed on your
computer unbeknownst to you that transmit7
Proprietary Technologies
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Many of the technologies mentioned earlier are
widely used and available for no charge.
Proprietary technologies are intellectual property
and not free of charge.
 Local search engines (e.g., Google for the WU
Web site)
 Shopping cart applications
 Wish list creation
 Tools to analyze Web site visitor behavior
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Intranets
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An intranet is a computer network within an
organization that uses Internet technologies for r
members of the organization only
If a company has an existing network, than
establishing an intranet is very inexpensive. All
that is required is the server software and
browsers for clients.
Most of the technologies mentioned earlier are all
available at no charge
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Information Most Frequently Found in
Corporate Intranets
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Customer databases
Corporate policies and procedures (Winthrop)
Corporate phone directories
Human resource forms (Winthrop)
Training programs
Product catalogs and manuals (Winthrop)
Data warehouse and decision support access
Internal purchase orders (Winthrop)
Travel reservations
Knowledge management databases
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Functional Applications of
the Intranet Idea
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Extranets
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An extranet is similar to an intranet but it enables
the firm’s business partners (e.g., suppliers or
customers) to access the firm’s intranet
Once an organization links its network to the
Internet theoretically anyone can access the
firm’s network. With respect to an extranet, firms
want to restrict access to business partners. A
virtual private network provides the security
mechanism for accomplishing this. A VPN uses a
combination of public and private lines to build a
secure extranet. The link between the firm’s
network and the Internet is often called a
“tunnel.” A VPN provides a secure tunnel.
VPNs are also required for firms with extensive
intranets (multi-site firms)
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Extranet Applications
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Managing the supply chain
Collaborating with other organizations in the
development of new products/services
Sharing product catalogs exclusively with
wholesalers
Sharing news and other information of shared
interest exclusively with business partners (e.g.,
production schedules, forecasts)
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Types of E-Commerce
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B2B (seller and buyer are business entities)
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B2C (seller is business; buyer is consumer)
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Other types
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C2C (seller and buyer are consumers; not
covered in our outline; eBay)
G2C, G2B, G2G
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Main Ideas in B2B E-Commerce
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Buying and selling in B2B
 Auctions support dynamic pricing (bidding)
 Exchanges support dynamic and negotiated
prices
Supporting technologies for buying/selling
 VAN EDI and Web enabled EDI
 Electronic funds transfer
 Digital signature and digital certificates
Activities other than buying and selling
 Alliances
 Sharing of supply chain information
 Sharing of product designs, logistics, forecasts
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Size of the B2B Market
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By 2004 market may reach $10 trillion; much
larger than B2C market
In the US 40 percent of all B2B transactions are
done on-line
B2B commerce is about 10 times as great as B2C
commerce
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Classifying Auctions/Exchanges
Overview
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Public or private
 Auctions tend to be public; exchanges tend to
be private
Number of participants
 Sell side one seller
 Buy side one buyer (GE or ChoiceBuy)
 Many sellers and many buyers (ChemConnect)
Ownership
 Industry giant
 Neutral third party
 Consortium
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Sell-Side with One Seller
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Sellers may be click-and-mortar manufacturer or
intermediaries
Use the Internet to sell through electronic
catalogs
 Cisco, Dell, Staples
 Separate pages and catalogs for major buyers
Boeing sponsors a website for which airlines can
find maintenance and parts
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Buy-Side with One Buyer
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This model arises from the procurement needs of
firms where procurement involves the purchase
of goods and services needed to accomplish the
mission of the business
In this model a buyer opens an electronic market
on its own server and invites potential suppliers
to bid on the items the buyer needs. The
invitation is called a request for quote (RFQ).
This process is called the reverse auction of
bidding mode.
GE was one of the first to do this
Online directories exist for suppliers that list open
RFQs
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Exchanges with Many Buyers and
Sellers
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In these exchanges buyers and sellers may be
interested in both long term contracts or onetime transactions at prevailing prices.
Examples
 ChemConnect
 Alibaba.com
 Converge.com (spot market for electric,
networking and computer components)
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Classifying Exchanges/Auctions (cont)
Ownership of Exchanges
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Industry giant
 IBM established an exchange for selling
patents (delphion.com)
Neutral entrepreneur
 ChemConnect.com
The consortia or co-op
 Covisint (automobile)
 Orbitz (airlines)
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Services Provided by Intermediaries in
an Auction/Exchange
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Services for buyers
 Automate buying, contract management,
purchase orders, requisitions, business rules
enforcement, and payment
Services for sellers
 Catalog creation and content management,
order management, invoicing, and settlement
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Other B2B E-commerce Practices:
Alliances and Sharing Information
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Alliances
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Online business alliances of airlines such as Orbitz
(www.orbitz.com) and Star Alliance
Covisint is an alliance of major automobile makers
In real estate (MLS)
Sharing of information (collaborative
commerce)
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Extranet idea
Sharing of supply chain information
Joint design
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Technologies that Support B2B
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VAN and Web-enabled EDI
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Electronic funds transfer (EFT)
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Digital signatures and certificates
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Ways to authenticate online messages similar to physical
signatures on paper.
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Major Benefits of B2B to Business
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Reduction of paper and administrative costs
Reduces cycle time (time compression)
Reduces search costs and time for buyers and
sellers
Reduces inventory levels and costs
Reduction in errors and/or improved quality of
service
Enables JIT and production flexibility
Expands the marketplace
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An Overview of B2C E-commerce
Practices
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Growth of B2C (see graph in textbook); over 50%
of US is online
E-tail revenues doubled from 2002 to 2005
Types of e-retailers (e-tailers)
 Pure-play versus bricks-and-mortar
 Clicks-and-bricks
 Catalogue retailers
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E-tailing
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Fulfillment concept (picking, packing, and
shipping
Advantages to the seller
 Lower inventory by routing orders directly to
manufacturer
 Lower labor costs (no registers)
 Lower building costs
Advantages to the buyer
 Convenience and time savings
 Search mechanisms and comparison shopping
 Selection and product reviews
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E-tailing Practices
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Consumer profiling and one-to-one marketing;
both concepts relate to knowing the consumer
better so that the business can serve consumers
more effectively at lower cost to the business
 Cookies, clickstream tracking
 Buying and selling information from third
parties
Affiliate programs
 Location of the link versus target of link
 Compensation schemes
Cooperation among competitors
 Amazon example
Conversion rates
 Pure-play beats clicks and bricks companies
Mass-customization
Reverse auctions (Priceline.com)
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Digital Products and Services
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Digital products include products like
software, photographs, music, movies, or text
that can be delivered over the Internet
 regards.com (greeting cards) and
photodisc.com (photographs)
 Why are these products special?
Digital services
 Application service providers (renting
software)
 Renting storage space (rackspace.com)
 Online banking (direct.com)
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Pure-play Business Models
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Virtual storefront: Sells goods or services online
(Amazon.com)
Information broker: Provides information on
products or services (Edmunds.com)
Transaction broker: Provides online transaction
facility (eTrade.com, Expedia.com)
Online marketplace: Provides a trading platform
for individuals and firms (eBay.com, alibaba.com)
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More Pure-play Business Models
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Content provider: Creates revenue by providing
content (WSJ.com, TheStreet.com, mp3.com)
Online service provider: Provides online services,
including search service. (Google.com,
Xdrive.com)
Virtual community: Provides an online community
to focused groups (Friendster.com, iVillage.com)
Portal: Provides initial point of entry to Web,
specialized content, services (Yahoo.com,
MSN.com)
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M-Commerce
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M-commerce concerns the ability of mobile
devices to reach the Internet and the ability of
merchants to locate a mobile device.
Mobile devices must have GPS capability
Competitive position of US relative to
Japan/Korea
Consumer services
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Information based services – instant
messaging, email, search for information
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Transaction based services – purchase stocks,
concert tickets, music, or search for price
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Location based services –anticipate what you
want based on your location or data profile
(beam coupons for nearby restaurants)
Business services
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Practices (rules) that Attract and
Retain Customers (both B2B and B2C)
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Use of affiliate programs to target the right
customer (links with related sites)
Use cookies and CRM software to analyze
customer behavior
Use CRM software to develop customer profiles
and personalize shopping
Shorten the business cycle; fill orders quickly
Empower customers to help themselves; see
text for examples
Be proactive; capture the customer’s email
address and use it to bring the customer back;
de-commoditize
E-commerce is every commerce
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Ethical and Societal Issues
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Online annoyances
 Spamming
 Advertisers viewpoint
 Consumers viewpoint
 Pop-up windows
 Adware and spyware
 Phishing
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