BUSI1003 LEC05 Introduction to Management Information Systems Electronic Commerce

1. BUSI1003 LEC05 Introduction to Management Information SystemsElectronic Commerce References: Laudon, K. C. and Laudon, J. P., Management Information Systems: Managing the Digital Firm, 11th edition, Prentice-Hall, 2011.

2. SOME DEFINITIONS FIRST • ELECTRONIC COMMERCE • The buying and selling, marketing and servicing, and delivery and payment of products, services, and information over the Internet, intranets and other networks, between an internetworked enterprise and its prospects, customers, suppliers and other business partners. • Includes B2C, B2B and C2C e-commerce

3. SOME DEFINITIONS FIRST • ELECTRONIC BUSINESS • The use of Internet technologies to empower business processes, electronic commerce and enterprise communication and collaboration within a company and with its suppliers, and other business stakeholders

4. Selected (External) Target Groups General Public Intranet Extranet Internal Internet

5. Eight Unique Features of E-Commerce Technology • Ubiquity • Internet technology is available everywhere and anytime • Global reach • Across the national boundaries • Universal standards • Internet standards • Richness • Video, audio and text messages are possible

6. Eight Unique Features of E-Commerce Technology • Interactivity • Works through interaction with the user • Information density • Reduces information costs and raises quality • Personalization/customization • Allows personalized messages • Social Technology • User content generation and social networking

7. C B A/G Electronic Commerce Types

8. Core of E-Commerce Virtual Product Virtual Process Digital Process Digital Product Physical process Physical Product Virtual Delivery Agent Physical Agent Digital Agent Traditional Commerce Fundamental Dimensions of Electronic Commerce

9. Internet Business Models • E-tailor (Amazon.com) • Sell physical products directly to consumers or individual businesses • Transaction Broker (Etrade.com) • Save users’ time and money by processing online sales transactions • Generating a fee each time a transaction occurs • Provide information on rates and terms

10. Internet Business Models • Content Provider (WSJ.com & iTunes.com) • Create revenue by providing digital content • E.g., digital news, music, photos or video over the Web • Customer may pay to access the content • Revenue may be generated by selling advertising space • Market Creator (eBay.com) • Provide a digital marketplace where buyers and sellers can meet, search for products, display products and establish prices for those products • Can serve consumers or B2B e-commerce • Generating revenue from transaction fees

11. Internet Business Models • Community Provider (Facebook.com) • Provide an online meeting place where people with similar interests can communicate & find useful information • Create revenue through advertising • Portal (Yahoo.com) • Provide initial point of entry to the Web along with specialized content and other services • Revenue derives from advertising • Service Provider (Google Apps) • Provide Web 2.0 application, e.g., photo sharing, video sharing and user-generated content (in blogs and social networking sites) as services • Provide other services, such as online data storage and backup • Use either a subscription or advertising revenue model

12. E-commerce revenue models • Advertising • Yahoo • Sales revenue • Amazon • Subscription • Gartner • Free/Freemium • Flickr • Transaction Fee • E*Trade • Affiliate • Openrice

13. Web 2.0 Service • Social Networking • Social networking sites sell banner ads, user preference information, and music, videos and e-books • Social Shopping Sites • Swap shopping ideas with friends (Kaboodle, ThisNext) • Wisdom of Crowds • Large numbers of people can make better decisions about topics and products than a single person • Prediction Markets: • Peer-to-peer betting markets on specific outcomes (elections, sales figures, designs for new products)

14. B2B E-CommerceNew efficiencies and Relationships • EDI • Enables the computer-to-computer exchange between two organizations of standard transactions (e.g., invoice, purchase order…) • Private Industrial Network • B2B extranet which link to suppliers and other key business partners. It permits the firm and designated suppliers, distributors and other business partners to share product design and development, inventory management, production scheduling…to support collaboration and improve SCM • Net Marketplace • Provide a single digital marketplace based on Internet technology for many buyers and sellers

15. Companies use EDI to automate transactions for B2B e-commerce and continuous inventory replenishment. Suppliers can automatically send data about shipments to purchasing firms. The purchasing firms can use EDI to provide production and inventory requirements and payment data to suppliers.

16. A private industrial network, also known as a private exchange, links a firm to its suppliers, distributors, and other key business partners for efficient supply chain management and other collaborative commerce activities.

17. Net marketplaces are online marketplaces where multiple buyers can purchase from multiple sellers

18. E-Commerce Sales/Revenues  E-Commerce Sales/Revenues  E-Commerce in the Past Dot-com companies/investments  2000 2005

19. The Growth of E-Commerce Retail e-commerce revenues grew 15–25 percent per year until the recession of 2008–2009, when they slowed measurably. In 2010, e-commerce revenues are growing again at an estimated 12 percent annually.

24. B-C / C-C e-Business B-B e-Business A-B/C e-Business Logistic Management Payment Issues SETTING UP AN E-BUSINESS Legal and Regulatory Framework e-Marketing/ CRM How to make money? - business models What are the critical issues? - business strategies Where is the market? - potential customers and marketplaces How to start up? - steps and funding sources Security and Privacy

25. Mobile Commerce • Can be defined as any transaction with a monetary value – direct or indirect – that is conducted over a wireless telecom-munication network with a mobile device (Ngai & Gunasekaran, Decision Support Systems, 43 (2007) 3-15)

26. M-Commerce vs E-Commerce • Higher degree of mobility • versus PCs/laptops in E-Commerce • Broader reach • in terms of penetration, e.g., 84.9% internet penetration versus 199.6% mobile penetration in Hong Kong. • http://www.ofta.gov.hk/en/datastat/key_stat.html • Enhanced information network access • Versus supporting and realizing transactions in E-Commerce.

27. M-Commerce Applications • Mobile Lifestyle • Mobile Payment • Mobile Banking • Mobile Stock Trading • Mobile Tourism • Mobile Ticketing • Mobile Shopping • Mobile Searching • Mobile Mail • Mobile News and Sports • Mobile Gambling • Mobile Entertainment

31. M-Commerce Applications • Information-based services • Location-based services • Transaction-based services • Personalized services

33. New Dimensions • Mobile 2.0 • The social web meets mobility • Extensive use of user-generated content • Collaboration, coordination and support with E-Commerce • Integration with new technologies and applications, e.g., RFID, eBay with Skype, etc. • M-Commerce and culture • M-Commerce and health

35. M-Commerce Challenges • Immature/non-standardized wireless networks • Immature mobile technologies • Smaller bandwidth • Higher risk and exposure to threats, security and privacy • Smaller screen and keyboard • Less powerful mobile devices

36. E-Commerce Challenges • “Yet-to-prove” business models • Business process change requirements • Channel conflicts • Legal issues • Security & privacy