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Lead Black Slide. Chapter 12. Electronic Commerce and the Strategic Impact of Information Systems. Our Agenda. Providing a Strategic Impact Electronic Commerce Systems Interorganizational Information Systems Global Information Systems Strategic Information Systems. Learning Objectives.

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  1. Lead Black Slide Powered by DeSiaMore

  2. Chapter 12 Electronic Commerce and the Strategic Impact of Information Systems Powered by DeSiaMore

  3. Our Agenda • Providing a Strategic Impact • Electronic Commerce Systems • Interorganizational Information Systems • Global Information Systems • Strategic Information Systems Powered by DeSiaMore

  4. Learning Objectives • Describe how information systems can have a strategic impact on a business and give examples of information systems that create a competitive advantage for a business. • Describe the main types of electronic commerce. Powered by DeSiaMore

  5. Learning Objectives (cont’d.) • List the functions provided by electronic commerce systems. • Explain why interorganizational systems are used in business alliances. • Describe several ways that a business can participate in an interorganizational system. Powered by DeSiaMore

  6. Learning Objectives (cont’d.) • Explain how an electronic data interchange system functions. • Explain what global information systems are why international businesses need them. Powered by DeSiaMore

  7. Learning Objectives (cont’d.) • Describe different forms that global information systems can take and how each form relates to international business strategy. • Explain what a strategic information system is an what types of information systems are strategic. Powered by DeSiaMore

  8. Learning Objectives (cont’d.) • Describe how strategic information system opportunities can be identified in business. Powered by DeSiaMore

  9. Providing a Strategic Impact Electronic Commerce and the Strategic Impact of Information Systems Powered by DeSiaMore

  10. Providing a Strategic Impact • Information systems that have a strategic impact on a business help create a competitive advantage for the business. Powered by DeSiaMore

  11. Main Approaches for Gaining a Competitive Advantage • Cost leadership – having lower production and operating costs that the competitors. • Differentiation – providing products or services that are unique so the customer wants to purchase from the business. Powered by DeSiaMore

  12. Main Approaches for Gaining a Competitive Advantage (cont’d.) • Focus – focusing on a niche to provides products or services designed for a specific segment of the market. • Innovation – means developing new ways of operating or managing a business. Powered by DeSiaMore

  13. Main Approaches for Gaining a Competitive Advantage (cont’d.) • Growth – means expanding the products or services provided by the business. • Business Alliances – means forming groups of businesses that work together. Powered by DeSiaMore

  14. Electronic Commerce Systems Electronic Commerce and the Strategic Impact of Information Systems Powered by DeSiaMore

  15. Electronic Commerce Systems • An Electronic Commerce System is an information system that provides e-commerce capabilities for an organization. Powered by DeSiaMore

  16. The Strategic Impact of Electronic Commerce • Electronic commerce can have a strategic impact on business by: • Providing an innovative approach for conducting business. • Providing a reduction in the cost of transactions. • Providing unique, customized products for its customers. • Providing customer access 24 hours every day. Powered by DeSiaMore

  17. Types of Electronic Commerce • Business-to-consumer (B2C) • Business-to-business (B2B) • Consumer-to-consumer (C2C) • Intraorganizational Powered by DeSiaMore

  18. Business-to-Consumer • Business-to-consumer (B2C) involves a business selling its products or services electronically to the final consumer, which is usually an individual. Powered by DeSiaMore

  19. Business-to-Consumer • B2C companies operate in several ways: • E-tailers • Called direct marketers • Using others to sell their products • Called indirect marketers • Sell their products electronically • Called full cybermarketers Powered by DeSiaMore

  20. Business-to-Consumer (cont’d.) • Selling through traditional means as well as electronically • Called partial cybermarketers • Filling orders from their own stock • Called electronic distributor • Send orders they receive to manufacturers or wholesalers that fill the orders • Called electronic brokers Powered by DeSiaMore

  21. Business-to-Business • Three main types of B2B e-commerce: • Supplier-oriented marketplace – supplier company provides e-commerce capabilities for other businesses to order its products. • Buyer-oriented marketplace – buyer requests quotations or bids from other companies electronically. • Intermediary-oriented marketplace – acts as an intermediary between buyer and seller. Powered by DeSiaMore

  22. Consumer-to-Consumer • In consumer-to-consumer (C2C) electronic commerce, one consumer sells a product or service to another consumer usually through an intermediary e-commerce business. Powered by DeSiaMore

  23. Intrabusiness • Intrabusiness, or organizational, electronic commerce involves transactions between departments, regions, subsidiaries, or other units of a business. Powered by DeSiaMore

  24. Characteristics of Electronic Commerce Systems • Product presentation • Electronic catalog • Order entry • Electronic shopping cart • Payment • Electronic payment • Electronic Funds Transfer (EFT) Powered by DeSiaMore

  25. Characteristics of Electronic Commerce Systems (cont’d.) • Product distribution • Customer service • Product support • Data acquisition Powered by DeSiaMore

  26. Interorganizational Information Systems Electronic Commerce and the Strategic Impact of Information Systems Powered by DeSiaMore

  27. Interorganizational Information Systems • An InterOrganizational System (IOS) is an information system shared by one or more suppliers and customers. • The most familiar example of IOSs are Electronic Data Interchange (EDI) systems which provide for the transfer of data between businesses. • Electronic Funds Transfer (EFT) systems provide for the transfer of money between financial institutions. Powered by DeSiaMore

  28. Business Alliances • Businesses coordinate some of their operations or link some of their resources to form business alliances, which serve the interests of all businesses in the alliance. • Types of alliances • Between a business and a competitive business • Between a business and a noncompetitive business • Between a business and its suppliers and customers Powered by DeSiaMore

  29. The Strategic Impact of Interorganization Systems • Interorganizational systems provide for the sharing of information and processing between businesses in a business alliance. • Ordering products electronically with and EDI system is less expensive than ordering other ways. Powered by DeSiaMore

  30. Characteristics of Interorganizational Systems • Businesses are involved in InterOrganzational Systems (IOS) as either: • Sponsors – a business that sets up and maintains an IOS • Participant – a business that uses an IOS Powered by DeSiaMore

  31. Characteristics of Interorganizational Systems (cont’d.) • Business can participate in an IOS in several ways: • A business simply enters input and receives output by using an IOS sponsored by another business. • A business accesses data storage or processing capabilities of another business in the IOS. • A business can participate in an IOS by using the capabilities of the IOS received from the sponsor for managing internal operations. Powered by DeSiaMore

  32. Electronic Data Interchange Systems • An Electronic Data Interchange (EDI) system provides for electronic communication of data between businesses. • Types of data sent include • Purchase order data • Shipping data • Invoice data • Product description data • Price list data • Insurance data Powered by DeSiaMore

  33. Traditional versusInternet EDI • An EDI system, like all IOSs, requires a data communications link between businesses. • Internet EDI systems require special software to send encrypted standardized data. • EDI data is generally input directly into the system upon receipt. Powered by DeSiaMore

  34. EDI Benefits and Problems • Benefits of EDI • Speed • Data entry errors are reduced • Problems with EDI • Organizational participation • Technical problems must be solved • Can be expensive Powered by DeSiaMore

  35. Global Information Systems • Electronic Commerce and the Strategic Impact of • Information Systems Powered by DeSiaMore

  36. Global Information Systems • Global (international) information systems provide communication between business locations around the world, transfer of data between international locations, and use of system functions at different locations worldwide. Powered by DeSiaMore

  37. International Business • Businesses engage in international activities for several reasons. • International sales • International production • International product development Powered by DeSiaMore

  38. International Business (cont’d.) • International businesses generally follow one of several basic strategies. • Multinational strategy – the business allows its foreign operations to function largely independently. • Global strategy – the central headquarters coordinates the activities of the foreign operations closely. Powered by DeSiaMore

  39. International Business (cont’d.) • International strategy – involves transferring knowledge and skills from the central headquarters to the foreign operations. • Transnational strategy – involves using knowledge and skills from both the central headquarters and the foreign operations. Powered by DeSiaMore

  40. Characteristics of Global Information Systems • Global information systems differ from domestic information systems in a number of ways. • Data communications technology • Cost of data communications • Concern for cultural differences between countries • Political and legal factors – Transborder Data Flow (TDF) Powered by DeSiaMore

  41. Characteristics of Global Information Systems (cont’d.) • Businesses that follow a multinational strategy tend to have decentralized, or independent, information systems for their central headquarters and different foreign operations. • Businesses that follow a global strategy ten to have highly centralized GIS determined by the central headquarters. Powered by DeSiaMore

  42. Characteristics of Global Information Systems (cont’d.) • Businesses that follow an international strategy tend to have distributed GIS in which systems in the central headquarters are connected to those in the foreign operations. • Business that follow the transnational strategy require complex, integrated GIS in which the central headquarters and all the foreign operations participate equally. Powered by DeSiaMore

  43. Global Electronic Commerce • Global e-commerce systems should: • Offer sites in several languages, with a feature that allows the user to select the preferred language. • Allow customers to pay in several different currencies. • Be sensitive to cultural differences in various countries. Powered by DeSiaMore

  44. Strategic Information Systems Electronic Commerce and the Strategic Impact of Information Systems Powered by DeSiaMore

  45. Strategic Information Systems • A Strategic Information System (SIS) affects the way a business competes with other businesses, thus giving it an advantage over its competitors. Powered by DeSiaMore

  46. Identifying Strategic Information Systems Opportunities • Look at the business’s value chain. • Primary activities • Creating product • Selling product • Servicing product Powered by DeSiaMore

  47. Identifying Strategic Information Systems Opportunities (cont’d.) • Support Activities • Inbound logistics • Operations • Outbound logistics • Marketing and Sales • Service • Procurement • Human resource management • Technology development • Firm Infrastructure Powered by DeSiaMore

  48. Electronic Commerce and the Strategic Impact ofInformation Systems Key Terms Powered by DeSiaMore

  49. Business Alliance Business-to-Business (B2B) Electronic Commerce Business-to-Consumer (B2C) Electronic Commerce Competitive Advantage Consumer-to-Consumer (C2C) Electronic Commerce Electronic Auction Electronic Business (E-Business) Electronic Catalog Electronic Commerce (E-Commerce) Electronic Commerce (E-Commerce) System Electronic Payment Key Terms Powered by DeSiaMore

  50. Electronic Shopping Cart E-tailer Global (International) Information System Interorganizational Information System Intrabusiness (Organizational) Electronic Commerce Strategic Information System (SIS) Transborder Data Flow (TDF) Value Chain Key Terms (cont’d.) Powered by DeSiaMore

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