From E-Commerce to E-Business The Convergence of Business and Technology

1. John A. Foster, 2002 From E-Commerce to E-Business 1 From E-Commerce to E-BusinessThe Convergence of Business and Technology John A. Foster Principal E-Business Architect Eastman Kodak Company john.foster@kodak.com

2. John A. Foster, 2002 From E-Commerce to E-Business 2 Key Questions Did e-commerce start with the Internet and the Web? What�s the difference between �e-commerce� and �e-business�? If the Web is so great, why did all those companies fail? Are web services the next big thing in e-business?

3. John A. Foster, 2002 From E-Commerce to E-Business 3 Electronic Commerce (narrow definition) Key point: TRANSACTION FOCUSED.Key point: TRANSACTION FOCUSED.

4. John A. Foster, 2002 From E-Commerce to E-Business 4 Electronic Commerce (expanded definition) Key point: PROCESS FOCUSED.Key point: PROCESS FOCUSED.

5. John A. Foster, 2002 From E-Commerce to E-Business 5 The Beginning of E-Commerce

6. John A. Foster, 2002 From E-Commerce to E-Business 6 � and the Supporting Technologies

7. John A. Foster, 2002 From E-Commerce to E-Business 7 The Elements of EDI A strength of EDI is its transport & infrastructure But it came with a price

8. John A. Foster, 2002 From E-Commerce to E-Business 8 Electronic Data Interchange

9. John A. Foster, 2002 From E-Commerce to E-Business 9 Integrated Voice Response Applications

10. John A. Foster, 2002 From E-Commerce to E-Business 10 Evolution to E-Business

11. John A. Foster, 2002 From E-Commerce to E-Business 11 � and the Supporting Technologies

12. John A. Foster, 2002 From E-Commerce to E-Business 12 The Elements of Internet E-Business Many choices, but also more challenge and responsibility

13. John A. Foster, 2002 From E-Commerce to E-Business 13 Internet System to System

14. John A. Foster, 2002 From E-Commerce to E-Business 14 Web Applications

15. John A. Foster, 2002 From E-Commerce to E-Business 15 Internet economy poses opportunities and threats � Transform traditional business models using IT as enabler Compression of time & space 30% of BancAmerica�s online customers are outside of traditional geographic area Adaptec reduces manufacturing cycle from 12 to 8 weeks, slashing $10M in inventory costs �Always open� �Friction reduction� creating new sources of economic value Intermediation premium (e.g. broker�s fee) ? Manual sourcing by fax and phone ? Cost of brick & mortar ? But adding market turbulence �The Internet will change everything.�

16. John A. Foster, 2002 From E-Commerce to E-Business 16 Market TurbulenceTravel, Brokerage, Books Slide: build slide of market turbulence in the form of competitive dynamics. Main Point(s)/Script: Now, let�s take you through Market Turbulence more in depth. We�ll take a look at 3 markets and how the Internet is changing the competitive dynamics in each. Stock Brokerage Industry (1) First, you are the �Actor�, in this case, you are Schwab and you are selling to this customer space against (click) traditional competitors such as Merrill Lynch. (2) (click) The Internet comes along and with it the the emergence of a new entirely electronic, Internet-only competitor, ETrade. ETrade enabled by the Internet in effect shifts the customer space. stock trading is now (1) very easy,and (2) cheap. (3) (click) Schwab responds by opening a new Internet channel and manages to not only gain a foothold, but leverages their trusted brand to the Internet and now is the most popular trading site. (5) (click) but, out of nowhere, comes an �Out-of-Market� competitor, Intuit. Leveraging their technology expertise and their installed base over 7 million Quicken customers, they launch trading capabilities on their site. Travel Industry (4) (click) The travel industry. Here it�s a little different. Sabre is selling to their customer space, which in this example, is traditional travel agencies. The Internet comes along, and now Preview Travel who is a customer of Apollo (competitor to Sabre) shifts the customer space. Now, customers can easily make their own bookings. (5) (click) Sabre decides this is a good idea and launches their own Internet direct channel, Travelocity. This competes against Preview Travel and traditional travel agencies. (6) (click) Now, an out of market competitor arrives, Microsoft Expedia, who by leveraging their technology expertise, builds a site that by December �97 had revenues of over $1 million per day. Process: build the slide as you go along. Keep a brisk pace since this mirrors how fast the competitive landscape is changing. Interaction: minimal, since you are building the slide and emphasizing the main points. Demo: build slide Evidence: evidence is straightforward, may have some other facts to reference (or to respond to questions) if need be. Transition: Lets now look at the third major opportunity/threat created by the internet:how companies have redefined sources of competitive advantage by removing �frictional� losses in their business system Slide: build slide of market turbulence in the form of competitive dynamics. Main Point(s)/Script: Now, let�s take you through Market Turbulence more in depth. We�ll take a look at 3 markets and how the Internet is changing the competitive dynamics in each. Stock Brokerage Industry (1) First, you are the �Actor�, in this case, you are Schwab and you are selling to this customer space against (click) traditional competitors such as Merrill Lynch. (2) (click) The Internet comes along and with it the the emergence of a new entirely electronic, Internet-only competitor, ETrade. ETrade enabled by the Internet in effect shifts the customer space. stock trading is now (1) very easy,and (2) cheap. (3) (click) Schwab responds by opening a new Internet channel and manages to not only gain a foothold, but leverages their trusted brand to the Internet and now is the most popular trading site. (5) (click) but, out of nowhere, comes an �Out-of-Market� competitor, Intuit. Leveraging their technology expertise and their installed base over 7 million Quicken customers, they launch trading capabilities on their site. Travel Industry (4) (click) The travel industry. Here it�s a little different. Sabre is selling to their customer space, which in this example, is traditional travel agencies. The Internet comes along, and now Preview Travel who is a customer of Apollo (competitor to Sabre) shifts the customer space. Now, customers can easily make their own bookings. (5) (click) Sabre decides this is a good idea and launches their own Internet direct channel, Travelocity. This competes against Preview Travel and traditional travel agencies. (6) (click) Now, an out of market competitor arrives, Microsoft Expedia, who by leveraging their technology expertise, builds a site that by December �97 had revenues of over $1 million per day. Process: build the slide as you go along. Keep a brisk pace since this mirrors how fast the competitive landscape is changing. Interaction: minimal, since you are building the slide and emphasizing the main points. Demo: build slide Evidence: evidence is straightforward, may have some other facts to reference (or to respond to questions) if need be. Transition: Lets now look at the third major opportunity/threat created by the internet:how companies have redefined sources of competitive advantage by removing �frictional� losses in their business system

17. John A. Foster, 2002 From E-Commerce to E-Business 17 The Ultimate Impact The Internet dramatically lowers the cost of communication

18. John A. Foster, 2002 From E-Commerce to E-Business 18 New Tools for the Old Economy Tremendous tools for �old economy� companies to apply to business processes.

19. John A. Foster, 2002 From E-Commerce to E-Business 19 Challenge: Process Improvement E-Business is like putting a magnifying glass in front of your core processes

20. John A. Foster, 2002 From E-Commerce to E-Business 20 Challenge: Systems Development Product software development and information systems development are becoming intertwined

21. John A. Foster, 2002 From E-Commerce to E-Business 21 Challenge: Commercialization Product commercialization must become business commercialization

22. John A. Foster, 2002 From E-Commerce to E-Business 22 Why Did the �.com� Companies Fail? Flawed business model Companies view the technology as their business, rather than having a business Lose money on individual transactions Amazon.com loses almost $3 per order on multi-product orders Lack of control over supply of what they sell Priceline.com All the good ideas duplicated by established concerns with deep pockets and staying power

23. John A. Foster, 2002 From E-Commerce to E-Business 23 Likely Winners

24. John A. Foster, 2002 From E-Commerce to E-Business 24 Web Services � the Future?

25. John A. Foster, 2002 From E-Commerce to E-Business 25 Web Services Built on the foundation from Internet e-Business

26. John A. Foster, 2002 From E-Commerce to E-Business 26 Web Services � �ready for prime time�? Favorable Signs Takes �component� foundation � Reuse culture Semantic agreement � and leverages Internet technologies http XML Challenges Cross-vendor interoperability Simplicity Security Pre- and post-transaction processes Trading partner agreements

27. John A. Foster, 2002 From E-Commerce to E-Business 27 Core Services

28. John A. Foster, 2002 From E-Commerce to E-Business 28 �Helper� Services

29. John A. Foster, 2002 From E-Commerce to E-Business 29 Summary E-business has been around for 20+ years, but the opportunities have been accelerated by the Internet and the web. Business is still business The Internet hasn�t changed that � though for a while many thought it might have. Web services may be the �next big thing�, but EDI, IVR, etc. will probably still be around.