E-Business E-Commerce

1. E-BusinessE-Commerce William R. Mussatto CyberStrategies, Inc. mussatto@csz.com 8/15/2000

2. E-Commerce Topics • E-Commerce Overview • B2B: Business-to-Business • Procurement Models • B2C: Business-to-Consumer • C2C: Consumer-to-Consumer

3. E-Commerce OverviewContext: Three Components • Supporting Infrastructure • Electronic Business Processes (how business is conducted) • Electronic Commerce Transactions (buying and selling)

4. E-Commerce OverviewSupporting Infrastructure • Computers, routers, and other hardware • Satellite, wire, and optical communications • System and applications software • Support services: web site development, hosting, consulting, electronic payment, and certification services • Human capital, such as programmers

5. E-Commerce OverviewE-Business Processes • Electronic business (e-business) is any process that a business organization conducts over a computer-mediated network • Many examples: • production-focused • customer-focused • internal or management-focused

6. E-Commerce OverviewE-Business Process Examples: Production-focused • Procurement • Ordering • Automated Stock Replenishment • Payment Processing • Electronic Links with Suppliers • Production Control • processes directly related to production process

7. E-Commerce OverviewE-Business Process Examples: Customer-focused • Marketing • Electronic Selling (B2C or B2B) • Processing of Customer Orders and Payments • Customer Management and Support (CRM)

8. E-Commerce OverviewE-Business Process Examples: Internal or Management-focused • Automated Employee Services • Training • Information Sharing • Video Conferencing • Recruiting • Advantages?

9. E-Commerce Overview • Electronic commerce is any transaction completed over a computer-mediated network that involves the transfer of ownership or rights to use goods or services • from Census Bureau • Mostly: Electronic Buying and Selling of Goods • not just on the Internet

10. E-Commerce Overview • Not Really New • EDI: Electronic Data Interchange • B2B • Internet Has Globalized E-Commerce • non-proprietary, common, communications infrastructure

11. E-Commerce Overview • Primarily Web-Based • HTTP and HTTPS are transport mechanisms • SMTP used for notification and verification purposes • FTP used for download of soft goods • EDI is also quite substantial and becoming “web enabled”

12. E-Commerce OverviewSome Examples from the Census Bureau • U.S. Census Bureau • http://www.census.gov/epcd/www/ebusines.htm • An individual purchases a book on the Internet. • A government employee reserves a hotel room over the Internet.

13. E-Commerce OverviewSome Examples from the Census Bureau • A business calls a toll free number and orders a computer using the seller's interactive telephone system. • A business buys office supplies on-line or through an electronic auction. • A retailer orders merchandise using an EDI network or a supplier's extranet.

14. E-Commerce OverviewSome Examples from the Census Bureau • A manufacturing plant orders electronic components from another plant within the company using the company's intranet. • An individual withdraws funds from an automatic teller machine (ATM).

15. B2B: Business-to-Business • Organizational Buying and Selling • Procurement Models • buyer push • request for quote / information • hotelsupplies.com, medibuy.com • offering a bid price (priceline) • sellers bid to sell • buyer pull: browsing catalogs and adding to shopping cart

16. B2C: Business-to-Consumer • Census Bureau Statistics: • Third Quarter 2000: $5.3B in U.S. online retail sales • 0.78% of all retail (4th qtr. 1999 0.64% ) • See also: http://www.census.gov/mrts/www/mrts.html

17. B2C: Business-to-Consumer • Transaction Multiplier Effect • one B2C transaction causes several B2B transactions to take place • not unique to online transactions • but happens in nearly real-time

18. Consumer-to-Consumer • Auctions • seller push • buyers bid • Listings • seller push • buyer pull • tend to be free or as service to get visitors to a site.

19. E-Commerce SummaryDigital Economy • Growth outpacing last year’s most optimistic projections • as share of retail portion, e-commerce remains quite small-- less than 1 percent • From 1995 to 1998, IT-producers contributed to 35% of real economic growth • yet accounted for only 8 percent of U.S. GDP

20. E-Commerce SummaryDigital Economy • In 1996 and 1997, falling prices in IT-producing industries brought down overall inflation by an average 0.7% • partially responsible for keeping inflation at interest rates low simultaneously • IT industries have achieved extraordinary productivity gains • 10.4% average annual growth

21. E-Commerce SummaryDigital Economy • By 2006, almost half of the U. S. workforce will be employed by industries that are either major producers or intensive users of information technology products and services. • New high demand for core IT workers • engineers, computer scientists

22. Problems with .com • Faulty assumptions • Front end is all important. • Delivery is easy. • Attack of the brick and mortars. • Barns & Nobel • L.L. Bean • ToysRus

23. Class Problem • Design either a B2B site or a B2B site • Outline the areas • Specify what must happen when a customer goes to actually buy the item. • Take about 30 minutes and appoint someone to describe the steps.

24. Extra • Detailed walk through simple shopping cart system. • Discussion of Industrial Strength E-Commerce as IBM sees it.