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E-Commerce Strategies

E-Commerce Strategies. Kelly Halbert Verizon E-Business Group December 2000. Definition: E-Commerce. Any business transaction that takes place via digital processes over a network. History of E-Commerce. 1969 ARPANET 1970s Bitnet and Usenet 1970s Electronic Funds Transfer 1980s EDI

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E-Commerce Strategies

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  1. E-CommerceStrategies Kelly Halbert Verizon E-Business Group December 2000

  2. Definition: E-Commerce Any business transaction that takes place via digital processes over a network

  3. History of E-Commerce • 1969 ARPANET • 1970s Bitnet and Usenet • 1970s Electronic Funds Transfer • 1980s EDI • 1980s Business Commerce • 1992 World Wide Web • 2000 E-Commerce is Expanding Exponentially

  4. Types of E-Commerce • Business-to-Business • Business-to-Consumer

  5. Why E-Commerce? • Everyone else is doing it • Direct-to-Consumer • On-line companies perceived as aggressive • Customer Satisfaction

  6. E-Commerce Forces • Customer Forces • Technological Forces • Economic Forces

  7. Business Imperatives • Lower Costs • Increased Revenues • Increased Speed of Transactions • Reduced Inventory Levels

  8. Benefits of E-Commerce • Manage Supply and Value Chains • Buy and Sell Products on the Internet • Automates business transactions. • Cuts customer service cost and improves the quality of service.

  9. E-Biz Model • Virtual Companies • Automated Supply and Value Chains • Internal Value Chain

  10. B-B Supply Chain

  11. Internal Value Chain

  12. Infonomics • New World Economy • Information

  13. E-Commerce Obstacles

  14. How are Businesses using E-Commerce? • Product Catalogs and Online Buying • Purchase Orders • Logistics Control • Customer Service • Call Centers

  15. Transactions and Functions • EDI – Electronic Data Interchange • EFT – Electronic Funds Transfer • Purchases • Marketing • Customer Service • Inventory • Intranet

  16. Key Components of a Digital Nervous System • Hardware • Software • People • Data • Procedures

  17. Hardware • Servers • Routers • Bridges • Hubs • Switches • Gateways

  18. Software • Web Server Software • Transaction Server Software • Browser • Security

  19. E-Commerce Architecture

  20. Myths • Cheap, Easy, and Lucrative • Everyone is Doing It • Middlemen are Eliminated • All Products become Commodities

  21. Risk Management • Project Related Risks • Technical Risks • Business Risks

  22. Risk Management Alternatives • What are our options and what do those options cost? • What is the risk of not doing something? • Outsourcing vs. Insourcing • Is the technology proven or new?

  23. Top 10 E-Commerce Failure Risks • Project has unclear mission statement. • Project does not have a clear business case. • Project specifications are vague. • Project is due to be delivered in one big chunk. • Project team does not have the experience. • Some team members are not committed. • Project plan does not include time for holidays, vacations, sick days. • Project plan includes no knowledge transfer plan for when consultants leave. • Project schedule was dictated by management without regard to the amount of work required. • Customer, partner, and management expectations are unrealistic.

  24. Cost • Promotional Site = $300,000 • Transactional Site = 1 to 3 Million • The largest cost associated with e-commerce is labor because of IT staffing shortage

  25. Measuring Success • Customer Satisfaction • Business Partner Satisfaction • Number of New Customers • Customer Attrition • Product Availability

  26. Brand ManagementMoving from Brick-and-Mortar to the Virtual World • Create a cyberbrand that attracts customer loyalty • Customer loyalty in cyberspace is much lower than in the real world • Customer retention cost are much higher in cyberspace • Customer acquisition costs are lower in cyberspace

  27. Internet Innovations • Portals – Yahoo! • E-Tailing – Amazon • Auctions – e-Bay • Application Hosting – Application Service Providers

  28. Portals • Gateway to the Web • Search Tool • Links • News • Advertisers

  29. External Service Providers • Internet Service Providers • Web Hosting Providers • Application Server Providers

  30. Choosing a Partner • Trust • Culture • Reputation and Image • Technology • Financial Stability

  31. Independent Software Vendors • ERP Vendors = SAP, Oracle, Peoplesoft • Database Software Manufacturers = Oracle • Web Software Co = iFront, Mercado • Home Productivity = Intuit, Norton

  32. Technical Standards • United Nations’ Electronic Data Interchange for Administration, Commerce, and Transport (UN/EDIFACT). • American National Standards Institute (ANSI)

  33. Tax Issues • State Sales Tax • Foreign Taxes

  34. Legal Issues • Since cyberspace doesn’t really exist as a physical place, where should legal issues be resolved. • The electronic trail is not treated with the same respect as a paper trail.

  35. Top 10 Benefits • Greater market share • Reduces administrative cost • Streamline business processes • Improves relationship between business partners and customers • Equal market access for small and large businesses • New ways to manage supply and value chains • Seamless business operating environment • Makes it possible to buy and sell on the Internet • Automates business transactions • Allows businesses to provide better customer service

  36. Reference Trepper, Charles, E-Commerce Strategies, Microsoft Press, 2000.

  37. Thanks Special Thanks to Chris Jones For His PowerPoint Assistance

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