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Electronic Commerce Systems

Electronic Commerce Systems. Learning Objectives. Identify the major categories and trends of e-commerce applications. Identify the essential processes of an e-commerce system, and give examples of how they are implemented in e-commerce applications.

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Electronic Commerce Systems

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  1. Electronic Commerce Systems

  2. Learning Objectives • Identify the major categories and trends of e-commerce applications. • Identify the essential processes of an e-commerce system, and give examples of how they are implemented in e-commerce applications. • Identify and give examples of key factors and Web store requirements needed to succeed in e-commerce. • Identify and explain the business value of several types of e-commerce marketplaces. • Discuss the benefits and trade-offs of several e-commerce clicks and bricks alternatives.

  3. Electronic Commerce Fundamentals Section 1 • Impact of e-Commerce on Competitive Markets • Reliance on Internet and Related Technologies • Many Challenges and Opportunities in the Field • Real World Case 1- e-Bay, Inc. Click to go to Case 1

  4. Order Scheduling/ Fulfillment Delivery Order Billing/ Payment Mgmt. Market/ Product Research Market Stimulation Education Order Selection and Priority Customer Service and Support Terms Negotiation Order Receipt Product Service and Support Product Discovery Order Tracking Order Payment Product Receipt Product Evaluation Terms Negotiation Order Placement Scope of e-Commerce A Wide Range of Business Processes Support E-Commerce Marketing/Discovery Transaction Processing Service and Support Selling Process Buying Process

  5. Scope of e-Commerce E-Commerce Applications • Business-to-Customer (B2C) • Business-to-Business (B2B) • Customer-to-Customer (C2C)

  6. Scope of e-Commerce Example QuickSource Internet Auction 1 QuickSource user submits a request for quote (RFQ) for publication via Internet Firewall Web server sends confirmation to browser 6 2 Web server parses HTTP request, validates user identity and authorization, and processes request Web Server Farm Database Servers • Windows 2000 Advanced Server • Internet Information Server 5 • Windows 2000 Datacenter Server cluster • SQL Server 2000 Application servers notify suppliers of the new RFQ via e-mail 5 Database server updates RFQ status as “published” 3 4 • Windows 2000 Advanced Server cluster • J.D. Edwards OneWorld ERP software • Siebel Systems e-Business CRM software Transactions and user activity logged for billing and marketing purposes Storage-Area Network

  7. Access Control and Security Access Control Authentication Security Measures Content Management Dynamic Content Generation Data Repository Collaboration and Trading Mediation Negotiation Bidding/Auctioning Collaborative Buying Online Community Workflow Management Buying Process Automation Document Management Rule- and Role-Based Content Routing Profiling and Personalizing Profile Management Personalization Behavior Tracking Catalog Management Pricing Calculation Product Configuration Catalog Generation Event Notification Event-Driven Transaction Messaging Message to e-mail Message Boards Newsgroups Search Management Content-Based Search Parametric-Based Search Role- and Rule-Based Search Payment Shopping Cart Payment Method Support Payment Verification e-Commerce Processes • Electronic Commerce Technologies • Access Control and Security

  8. e-Commerce Processes Bselect Software Gathers and Analyzes the Behavior of Website Visitors

  9. e-Commerce Processes Profiling and Personalizing Be Free and Supergo Bike Shops: Personalizing e-Commerce • Use of Bselect Personalization Application • Profile Information Saved by Key • Tracks Customers Anonymously • Supergo Bike Used Bselect 1 Year • Bselect Suggests Additional Sales • Highly Successful Application • E-Commerce Sales Grew from 33% to 60%

  10. e-Commerce Processes • Search Management • Content and Catalog Management Cableton Systems: e-Commerce Configuration • Network Equipment Maker with $3 Billion in Sales • e-Sales Configuration Workbench • Guides Customer Through Complex Purchase Processes • 60% of Web Orders Used Configurator to Reduce Errors Resulting in Huge Savings

  11. e-Commerce Processes Workflow Management Microsoft Corporation: e-Commerce Purchasing Processes • MS Market – Internal e-Commerce Purchasing System • Reduced Personnel Used for Purchasing Without Paperwork • High-Volume Low-Dollar Purchases Make Up 70% of Volume but Only 3% of Microsoft’s Accounts Payable • Very Successful Implementation

  12. Supplier n Supplier 2 Supplier 1 Catalog Content And Workflow Management Multisupplier Catalog MS Market Corporate Catalog Order Form Availability Order Entry Approval Workflow Purchase Order Workflow • Fulfillment • Shipping • Accounting • Messaging e-Commerce Processes Microsoft Corporation: e-Commerce Purchasing Processes Workflow Management of MS Market 1. Browse Suppliers 2. Find Products 3. Order Items 4. Confirm Order Employee Intranet Procurement 5. Transmit Order 6. Process Order 7. Order Completed

  13. e-Commerce Processes Collaboration and Trading Online Communities of Interest B2B e-Commerce Web Portals Dependence on Internet-Based Trading Platforms

  14. Electronic Payment Processes Electronic Payment Processes Web Payment Processes Electronic Funds Transfer (EFT) Secure Electronic Payments • Encrypt the Data Customer to Merchant • Encrypt the Data Passing Between Customer and Credit Authorizer • Take Sensitive Information Offline

  15. Client Browser Payment Server Merchant’s Web Server Credit Cards VISA MasterCard Bank Accounts Debit Cards Online Banking Online Buying Payflow Pro 1 ClickCharge e-Bill Payment CheckFree Paytrust Electronic Cash BillPoint PayPal Electronic Payment Processes Customer Merchant Request • Verify Merchant • Receive Order Info • Receive Payment Info • Confirm Order • Verify Customer • Review Payment Info • Authorize or Deny Payment Online Third-Party Computers with Links to Multiple Payment Systems

  16. Electronic Payment Processes Verisign Provides Security Plus…

  17. E-Commerce Applications and Issues Section II • E-Commerce is Here to Stay • B2C Applications • Brochureware • B2B – Website Support then Automating Procurement Systems Real World Case 2- Corporate Express: Click to go to Case 2

  18. Extranets And Exchanges B2C Portal Self-Service Web Stores Integrated Web Store Interactive Marketing Web Storefront & e-Catalog Supply Chain Management B2B Portal Procurement Automation Customer Self-Service e-Commerce Trends B2C and B2B Growth to e-Business Empowerment Short-Term Strategies High Long-Term Strategies e-Business Empowerment Customer Relationship Management Business Value B2C B2B Operations Automation Short-Term Projects Low High Time to Implement

  19. B2C e-Commerce Creating B2C e-Commerce • Offer Attractive Products or Services • Attractive Prices • Great Consumer Value • Realistic Forecasts of Profitability • Breakdown of Old Barriers of Time, Distance, and Form • Find Ways to Build Loyalty

  20. B2C e-Commerce Top Retail Web Sites • Amazon.Com www.amazon.com • eBay www.ebay.com • Eddie Bauer www.eddiebauer.com • Land’s End www.landsend.com

  21. B2C e-Commerce E-Commerce Success Factors • Selection and Value • Performance and Service • Look and Feel • Advertising and Incentives • Personal Attention • Community Relationships • Security and Reliability

  22. Awareness Consideration Preference Purchase Loyalty B2C e-Commerce How Traditional and Web Marketing Communications Differ in Supporting the Buying Process… Buying Process • Television Ads • General Interest Magazines • Point-of-Sale Promotions • Direct Marketing • Niche Magazines • Collateral • Television Ads • General Interest Magazines • Product Experience • Buyers Clubs Traditional Market Communications Web Market Communications • Buttons • Banners • Sponsorships • Banners • Microsites • Brochureware • Website • Daily Specials • Sweepstakes • First-time Order Incentives • e-Mail Alerts • Newsletters

  23. B2C e-Commerce Amazon.Com: Tops in B2C Retailing • One of the Biggest and Best Virtual Retailers • Finally Making Profits • Quick Confirmation and Order Processing • Adding Goods and Services • Wants to be a Next-Generation Retail Commerce Portal

  24. B2C e-Commerce Steps in the Development of a Web Store

  25. B2C e-Commerce Example of Prodigy.Biz Site

  26. B2C e-Commerce NTT/Verio Inc.: Website Management • One of the World’s Leading Web Hosting Companies • Offers Complete Services to Web Retailers • Guarantees 99.9% Uptime • 24x7 Server Monitoring and Customer Support • Hosts more than 10,000 Web Businesses

  27. B2B e-Commerce • The Wholesale and Supply Side of the Commercial Process • Electronic Catalog Systems • Electronic Trading Systems • Electronic Data Interchange • Electronic Funds Transfer • Integrating Supply-Chain Management with Customer Relationship Management

  28. B2B e-Commerce Cisco Systems: B2B Marketplace Success • 70% of Product Sales Occur at Their Website • Wide Variety of Service Offerings in the Purchase Process • Regular Customers Linked to Back-End Data Systems • Strong Post-Sale Customer Support • Highly Successful and Widely Used Implementation

  29. B2B e-Commerce e-Commerce Marketplaces • One-to-Many • Many-to-One • Some-to-Many • Many-to-Some • Many-to-Many • e-Commerce Portals • Exchanges • Auctions • Market Makers • Infomediaries

  30. BUYERS SELLERS 3 1 B2B WEB PORTAL MARKET GENERATOR SERVER 2 4 CONTENT MANAGER SERVER POST-TRADE MARKET HISTORY SERVER B2B e-Commerce Example of a B2B Web Portal INTERNET INTERNET INTERNET AUCTION REVERSE AUCTION LIVE MARKET SERVER

  31. B2B e-Commerce ChemConnect and Heritage Services: Public and Private B2B Exchanges • Public B2B Exchanges • ChemConnect – A Chemical Exchange Online Auction • Much Quicker than any Other Method • Private B2B Exchanges • Heritage Built Private Exchange in their Own Web Portal • Private Exchanges Offer More Control and Automates Processes

  32. B2B e-Commerce Electronic Data Interchange • EDI an Early Example of IT in e-Commerce • EDI Over the Internet Using Secure VPNs is a Growing Application

  33. Joint Venture Strategic Partnership In-House Division Spin-Off (Banesandnoble.com) (Rite Aid and Drugstore.com) (KBtoys.com) (OfficeDepot.com) B2B e-Commerce Alternatives and Benefit Tradeoffs in Selecting an e-Commerce System Integration Separation • Greater Focus • More Flexibility • Access to Venture Funding • Established Brand • Shared Information • Purchasing Leverage • Distribution Efficiencies

  34. Clicks and Bricks in e-Commerce e-Commerce Integration • E-Commerce a Part of the Regular Business Plan • Joint Ventures • Strategic Partnerships • Independent Spin-Offs E-Commerce Channel Choices

  35. Clicks and Bricks in e-Commerce E-Commerce Channel Development Strategies

  36. Clicks and Bricks in e-Commerce Citigroup: From Failure to Success in e-Commerce Integration Strategies • Launch of e-Citi in 1977 • Sought to Attract its Own Customers Electronically Before Someone Else Did • Extremely High Costs and had Numerous Problems and Failures • Formed New Internet Operating Group in 2000 • By 2001 Online Customers Were Up 80% and 100 Websites Trimmed to 38 Saving $1 Billion

  37. Summary • Electronic Commerce • E-Commerce Issues • B2C E-Commerce • B2B E-Commerce

  38. Clicks and Bricks Alternatives E-Commerce Channel E-Commerce Marketplaces a. Auction b. Catalog c. Exchange d. Portal E-Commerce Success Factors E-Commerce Technologies Electronic Commerce a. Business-to-Business b. Business-to-Consumer c. Consumer-to-Consumer Electronic Data Interchange Electronic Funds Transfer Essential e-commerce Processes a. Access Control and Security b. Catalog Management c. Collaboration and Trading d. Content Management e. Electronic Payment Systems f. Event Notification g. Profiling and Personalizing h. Search Management i. Workflow Management Infomediaries Trends in e-commerce Web Store Requirements KEY TERMS

  39. Optional Case Studies Click to go to Case 1 Real World Case 1 eBay Inc.: Managing Success in a Dynamic Online Marketplace Real World Case 2 Corporate Express: The Business Value of Integrating Customer and Supplier Procurement Systems Click to go to Case 2 Real World Case 3 E-Trade and Wells Fargo: The Business Case for Clicks and Bricks e-Commerce Click to go to Case 3 Real World Case 4 Providence Washington Insurance and Tharco: The Business Value of an Online Customer Interface Click to go to Case 4

  40. Next... Decision Support Systems Chapter 9

  41. eBay Inc.: Managing Success in a Dynamic Online Marketplace Case 1 1- Why has eBay become such a successful, fast growing, and diverse online marketplace? Visit the eBay website to help you answer, and check out their many trading categories, specialty sites, international sites, and other features. Return to Chapter 8 Return to Cases Page

  42. Buyers/Sellers Feedback Rating System eBay’s Fraud Policy PayPal-Electronic eBay Payments Vortex-Draws Products/Players Expansion into B2C and B2B User Voice in Decisions eBay Inc.: Managing Success in a Dynamic Online Marketplace Case 1 Discussion Points Would Include:

  43. eBay Inc.: Managing Success in a Dynamic Online Marketplace Case 1 2- Why do you think eBay has become the largest online/offline seller of used cars, and the largest online seller of certain other products, like computers and photo equipment?

  44. Kruse International Purchase Acquire not Start Marketplace Requires a Different Strategy Include listings-Online AutoTrader.com LLC Arranged Insurance and Warranty Plans Established an Escrow Service Established Shipping/Inspection Services B2C is Similar to C2C Selling eBay Inc.: Managing Success in a Dynamic Online Marketplace Case 1 Discussion Points Would Include:

  45. eBay Inc.: Managing Success in a Dynamic Online Marketplace Case 1 3- Is eBay’s move from a pure consumer-to-consumer auction marketplace to inviting large and small businesses to sell to consumers and other businesses, sometimes at fixed prices, a good long term strategy? Why or why not?

  46. Profitability to eBay eBay’s Meets Shift in Demand eBay Maintains-Voice of the Customer IT Delivers Online System eBay Inc.: Managing Success in a Dynamic Online Marketplace Case 1 Discussion Points Would Include: Return to Chapter 8 Return to Cases Page

  47. Profitability to eBay eBay’s Meets Shift in Demand eBay Maintains-Voice of the Customer IT Delivers Online System Trading Assistants Impact on eBay eBay Inc.: Managing Success in a Dynamic Online Marketplace Case 1 Discussion Points Would Include: Return to Chapter 8 Return to Cases Page

  48. Corporate Express: The Business Value of Integrating Customer and Supplier Procurement Systems Case 2 1- What is the business value to Corporate Express of integrating its systems with the procurement systems of its customers? Return to Chapter 8 Return to Cases Page

  49. Half of 75,000 Daily Orders Electronically Smallest of Corporate Express’ 30,000 Customers Log onto E-Way Conduct Purchasing Transactions E-Way Checks Controls Corporate Express Tailors Catalog to User’s Practices Buyer Time/Cost Savings Case 2 Corporate Express: The Business Value of Integrating Customer and Supplier Procurement Systems Discussion Points Would Include:

  50. Corporate Express: The Business Value of Integrating Customer and Supplier Procurement Systems Case 2 2- What are the business benefits of Corporate Express’ E-Way Web portal to its smaller customers? Its larger customers?

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