E-BusinessE-Business

E-BusinessE-Business

► Automation of business processes through Automation of business processes through electronic means.electronic means.

► E-Business that includes a financial transaction is E-Business that includes a financial transaction is known as e-commerce.known as e-commerce.

► Benefits of e-business:Benefits of e-business:► Reduced costsReduced costs► Increased capabilityIncreased capability► Improved communicationImproved communication► Enhanced controlEnhanced control► Improved customer serviceImproved customer service► Source of competitive advantageSource of competitive advantage

E-business has been defined by IBM as ‘the E-business has been defined by IBM as ‘the transformation of key business processes transformation of key business processes through the use of internet technologiesthrough the use of internet technologies

► Includes: Includes: ►On-line marketing and salesOn-line marketing and sales►Supply chainSupply chain►Channel managementChannel management►Manufacturing and inventory controlManufacturing and inventory control►Financial operationsFinancial operations►Employee workflow proceduresEmployee workflow procedures

►E-business technologies empower:E-business technologies empower:►EmployeesEmployees►CustomersCustomers►SuppliersSuppliers►DistributorsDistributors►VendorsVendors►partnerspartners

E-CommerceE-Commerce

►Electronic orderingElectronic ordering►Online ordering, payment and deliver Online ordering, payment and deliver

servicesservices►EFTEFT►Electronic share tradingElectronic share trading►Commercial auctionsCommercial auctions►Direct consumer marketing and after Direct consumer marketing and after

sales servicesales service

Benefits of E-BusinessBenefits of E-Business

►Cost reduction – increased revenuesCost reduction – increased revenues►CapabilityCapability►CommunicationCommunication►Control and channel efficiencyControl and channel efficiency►VisibilityVisibility►Customer serviceCustomer service►Competitive advantageCompetitive advantage

Barriers to E-BusinessBarriers to E-Business

►E-business not relevant to some E-business not relevant to some peoplepeople

►Skills and expertise to use the internetSkills and expertise to use the internet►Customers do not use e-businessCustomers do not use e-business►Country factor conditionsCountry factor conditions►Economic issuesEconomic issues►CultureCulture►Organizational typeOrganizational type

Varieties of E-CommerceVarieties of E-Commerce

► B2BB2B► B2CB2C► C2BC2B► C2CC2C►G2GG2G►G2EG2E► B2GB2G►G2CG2C► B2MB2M

Market place channel Market place channel structuresstructures

►Means of deliveryMeans of delivery►Simplest is directSimplest is direct► Intermediaries – agents, traders, Intermediaries – agents, traders,

brokers, dealers, wholesalers, brokers, dealers, wholesalers, distributorsdistributors

Changes to channel Changes to channel structuresstructures

►Disintermediation – removal of Disintermediation – removal of intermediaries in supply chain (Home Depot)intermediaries in supply chain (Home Depot)

► Reintermediation – new roles for traditional Reintermediation – new roles for traditional intermediaries – amazon.com replacing intermediaries – amazon.com replacing retailers, search engines, directories, retailers, search engines, directories, portals, e-tailers (consumer sites)portals, e-tailers (consumer sites)

► Countermediation – is the creation of a new Countermediation – is the creation of a new intermediary by an established co to intermediary by an established co to compete via e-business – airlines, grocery compete via e-business – airlines, grocery delivery, financial services (car sales)delivery, financial services (car sales)

Categorizing an e-commerce Categorizing an e-commerce business model (Rappa)business model (Rappa)

► Brokerage model (buyer-seller)Brokerage model (buyer-seller)► Advertising model (ad revenue)Advertising model (ad revenue)► Infomediary model (collecting data about Infomediary model (collecting data about

customers and selling it to other cos)customers and selling it to other cos)► Merchant model (retail transaction)Merchant model (retail transaction)► Manufacturing model (direct selling)Manufacturing model (direct selling)► Affiliate model (incentives to affiliate partner sites)Affiliate model (incentives to affiliate partner sites)► Community model (investment by consumers, Community model (investment by consumers,

content, money, time)content, money, time)► Subscription model (extra payment for VAS)Subscription model (extra payment for VAS)► Utility model (pay as you go)Utility model (pay as you go)

Hardware & Software Hardware & Software InfrastructureInfrastructure

► System architecture (machines, OS, language)System architecture (machines, OS, language)► The internet (telecommunication link)The internet (telecommunication link)► www (navigation system)www (navigation system)► IntranetIntranet► InternetInternet► Server/clientServer/client► E-mailE-mail► Internet protocolInternet protocol► iDTViDTV► M-commerceM-commerce► Wi-fiWi-fi

IT & StrategyIT & Strategy

► Role of internet in businessRole of internet in business► Apex should plan itApex should plan it► Suitability, acceptability, feasibility Suitability, acceptability, feasibility

Kalakota & RobinsonKalakota & Robinson► Knowledge building & capability evaluationKnowledge building & capability evaluation►Develop a comprehensive e-business designDevelop a comprehensive e-business design► E-business blue printE-business blue print► Application development and deploymentApplication development and deployment

Stage models (Computing Stage models (Computing evolution)evolution)

► Initiation stage (clerical)Initiation stage (clerical)►Contagion stage (rapid & uncontrolled Contagion stage (rapid & uncontrolled

growth)growth)►Control stage (standards set by Control stage (standards set by

management)management)► Integration stage (use of new Integration stage (use of new

technology)technology)►Maturity stage (in line with business Maturity stage (in line with business

strategy)strategy)

Supply Chain ManagementSupply Chain Management

►A supply chain encompasses all A supply chain encompasses all activities and information flows activities and information flows necessary for the transformation of necessary for the transformation of goods from the origin of the raw goods from the origin of the raw material to when the product is finally material to when the product is finally consumed or discarded.consumed or discarded.

Push n Pull ModelsPush n Pull Models

► Push model – organization produces goods Push model – organization produces goods according to schedules on historical sales according to schedules on historical sales patternspatterns

► Slow response, overstocking, bottlenecks, Slow response, overstocking, bottlenecks, delays, unacceptable service levels, product delays, unacceptable service levels, product obsolescenceobsolescence

► Pull model – where production and distribution Pull model – where production and distribution are demand drivenare demand driven

► Reduced product obsolescence, higher service Reduced product obsolescence, higher service levels, reduced bull whip effect, use of electronic levels, reduced bull whip effect, use of electronic connectionsconnections

Use of ISUse of IS

►Value chainValue chain►Value networkValue network►To achieveTo achieve►Efficiency – profitability, capacity use, Efficiency – profitability, capacity use,

yield gainyield gain►Effectiveness – allocation of resourcesEffectiveness – allocation of resources