e-commerce jason c.h. chen, ph.d. school of business administration gonzaga university, washington,...
TRANSCRIPT
E-Commerce
Jason C.H. Chen, Ph.D.
School of Business Administration
Gonzaga University, Washington, U.S.A.
Senior Consultant, [email protected]
Nov. 20, 2000
Topics
• E-Commerce:From B2C to B2B and Beyond
• e-Bid Process• Features of a B2B application.• Business plan for an e-Marketplace (next
year)• e-CRM and 1-1 Marketing (next year)
E-Commerce:From B2C to B2B and Beyond
Jason C.H. Chen, Ph.D.
School of Business Administration
Gonzaga University, Washington, U.S.A.
Senior Consultant, [email protected]
Nov. 22, 2000
Outline of Topics
• EC, B2C and B2B and their models.• How big is B2B?• Where is the Evidence?• What are the revenue models in B2B?• What is driving adoption of B2B? • Why now?• TASKCo.com
eBusiness Key Concepts
• eBusiness– The strategy of how to automate old business models
with the aid of technology to maximize customer value• eCommerce
– The process of buying and selling over digital media• eCRM (eCustomer Relationship Management)
– The process of building, sustaining, and improving eBusiness relationships with existing and potential customers through digital media
What is E-Commerce ?
• Electronic commerce (EC) is an emerging concept that describes the buying and selling of products, services and information via computer networks, including the Internet.
9%6%6%
22%
15%
8%
26%24%
21%
In pilot stage Starting toimplement
In use
1997 1998 1999
Figure: E-commerce on the rise.Source: 1999 SG Cowen/Datamation Networked Computing Survey
364434
775
623
E-commerce status at sitesFigure:E-commerce apps are a big driver for storage. Average installed online storage in gigabytes.Source: 1999 SG Cowen/Datamation Networked Computing Survey No plans Start in 99/00 Expand in 99/00 Largely done
BenefitNewchannel forexistingbusiness
Improvedcustomerservice
Enabledentire newline ofbusiness
Reducedoperatingcosts
Improvedcycle time
% ofRespondents
25% 23% 18% 7% 5%
BenefitKeep pacewithtechnology
Reduced costof sales
Other Notavailable
None
% ofRespondents
5% 4% 6% 4% 3%
Table: E-commerce’s most promising potential benefits
eBusiness Processes
WHY Customer Relationship
Redesign Business Processes (Outside-In)
Applying Technology
WHAT
HOW
eBusiness Processes
WHY Customer Relationship
Redesign Business Processes (Outside-In)
Applying Technology
WHAT
HOW
C
B
C
B
Traditional versus E-Business Models?
C: Individual ConsumerB: Business
What is B2C?
• B2C (or Extranets) is just web-enabled relationships between existing partners; they tend to be run by a single company seeking to lower the cost of doing business with its current suppliers or individual customers.
• Examples?– Amazon.com– Egghead.com
Enterprise
User ProfilesWorkflow
Business rulesPaymentAnalytics
Internet
Intranet
Figure: A B2C e-business Model
B2C Applications
• Electronic storefront• Electronic malls• Advertising online• Service online
– selling books, toys, computers– e-banking (cyberbanking)– online stock trading– online job market, travel, real estate
Figure : B2C and B2B Internet Commerce in the U.S. (Source: Forrester Research)
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
1998 1999 2000 2001 2002 2003
B2C
B2B
Billion
What is B2B?
• “B2B” is business-to- business commerce conducted over the Internet (called B2B e-commerce space, or e-marketplaces)
N
B2B e-Markepplaces:A CEO’s Perspective
“The next chapter in the e-business revolution involves the transformation of entire markets and the redefinition of industries. We will see the rise of a new class of entities -- e-Marketplaces -- that will help online buyers and sellers find each other, attack the inefficiencies of traditional markets, and carve out for themselves important roles in the e-business economy.”
Louis V. Gerstner Jr.
Chairman of the Board and CEO
IBM Corporation
E-Market is …Web-based marketplace
• e-market is Web sites where buyers and sellers come together to communicate, exchange ideas, advertise, bid in auctions, conduct transactions, and coordinate inventory and fulfillment
Buyers
Sellers
MarketSite
Figure : A B2B Model(Source: Goldman Sachs Investment Research Report)
Banks,Financial Institutions
eCredit.com
Suppliers
· Production materials· Operating goods,
services
Enterprise Customers
LogisticsCelarix, NTE
E-ChannelManagement
ProcurementNetwork
TradingNetwork
E-Customer Relationship
E-Commerce
E-Portal ManagementE-Services
SCM/ERP/Legacy Appls
Bu
sinesses
Bu
sinesses &
C
onsu
mers
1:NM:1 M:N
Knowledge Management/Business Intelligence
Focus on e-Business Applications
B2B Applications
• Advertising• Auctioning• Procurement• Channel management• E-commerce
$39 $114$294
$522
$782
$1,500
$1,113
0
300
600
900
1200
1500
1800
1998 1999 2000 2001 2002 2003 2004
($ B
illio
ns)
B2B
Figure: The Goldman Sachs B2B Sizing in USA
How Big is B2B?
Where is the Evidence
• Three highlights from the Goldman Sachs B2B survey 1.0:– E-Commerce spending on proprietary Web site,
e-market, and procurement (75% say, in 2000)– Business are increasingly likely to develop B2B
e-markets and to favor online auctions (74% say, in 2000)
– Outsourcing e-commerce spending is commonplace among businesses (25% say, up to 75% of e-C spending)
B2B Revenue Model
• B2B companies exhibit varying business models, depending on the key products and services they offer. The models include:– transaction fees,– auction-driving commissions,– advertising,– content subscriptions,– software licensing
B2C vs. B2B
B2C B2B
Switching Costs Low with multiple suppliers High when integrated with e-frastructure;few qualified suppliers
RelationshipType
Transactional Long term, mission critical
Transaction Type Smaller average selling price Larger average selling priceRevenue Model Traffic volume is critical;
Large customer base is keyDon’t need every customer, only need theright customers
Source: Goldman Sachs Investmenet Research
The Magnificent Seven B2B Drivers
• Increasing competition and globalization• Growing interactivity• Financial opportunity• Efficiencies and cost savings• Enhanced market and customer reach• Real-time needs• Regulatory and taxation issues
N
Small Business Likely to Fuel B2B
• Small businesses will fuel the B2B market– the use of and dependence on the Internet by
small businesses as a medium for marketing, distribution, and commerce will likely fuel the B2B market.
– as more small business access the Internet and set up corporate Web pages, the more they will employ the Internet to execute their business strategy.
Benefits of B2B
• B2B solutions create competitive dynamics through:– cost savings
• the composition of cost (product versus process costs)
• the number of intermediaries in the supply chain.
– new financial (revenue) opportunities• the rate of industry-wide B2B adoption• business model
N
Why Now?
• B2B catalysts are now arising to stimulate adoption (mentioned earlier).
• Interactive networks have recently become ubiquitous and inexpensive, accelerating the use of B2B applications.
• A viral effect will spur copycat behavior throughout the market as more companies continue to implement B2B applications.
Which Industries are Likely to Embrace B2B Solutions
• Industries that are B2B inclined exhibit certain key characteristics:– the supply chain is highly diffuse,– techno-innovators dominate the culture,– process represents more than 20% of total
costs,– products exhibit complex configurations,– expense pressure is intense.
• Research show that leading industries
migrating online and adopting B2B solutions include the following:– Aerospace/Defense: 35%– Electronics: 25%– Chemicals: 20%– Motor vehicles and parts: 18%– Medical equipment and transport: 17%
What Makes a B2B e-market Company Succeed?
• Five Critical Success Factors for e-markets:– Business model,– market size,– industry expertise,– branding and distribution,– management execution hustle (not just the
formulation of strategy)
N
Solutions for e-Enterprise Organizations
• Streamlines buying and selling between trading partners
• Maximizes trade efficiency across the entire supply chain
• Strategic e-commerce capabilities in Internet time
• Delivers compelling ROI
Buyers
Sellers
MarketSite
Solutions for Internet Market Makers
• Turn your supply chain into a revenue generation opportunity
• Leverage your industry domain expertise into strategic e-commerce solutions
• Brings e-commerce to businesses of any size, across all industries
Your Portal
Global Solution for Businesses:The Global Trading Web
Global Trading
Web
Connect once to trade with anyone,anytime, anywhere in the world.
European e-markets
• B2C e-commerce in Europe is likely to remain approximately two to three years behind the U.S. .
• B2B in Europe currently lags the U.S. by two years.
• How about in Asia?
TASKCo Mission
ExpandMarkets
Improve Efficiencies
RetainCustomers
FundamentalBusiness
Drivers HaveNot Changed
Leveraging Internet to Help Customers to:
E-ChannelManagement
ProcurementNetwork
TradingNetwork
E-Customer Relationship
E-Commerce
E-Portal ManagementE-Services
SCM/ERP/Legacy Appls
Bu
sinesses
Bu
sinesses &
C
onsu
mers
1:NM:1 M:N
Knowledge Management/Business Intelligence
Focus on e-Business Applications
This Market Place offers an integrated suite of capabilities that enables all modes of access, reduce buyer’s total cost of ownership and seller’s marketing costs, eventually increase revenue for both parties.
— Suppliers — — Buyers —
• Needs evaluation• Fact-based Negotiation• Procurement Policies &
Procedures Mgmt.• Maintenance,
Disposal, &Renewal
• Catalog Production
• Order Acceptance
• Logistics• Financing • Reporting of
Item Level Detail
• Trend Analysis
• Budget Tracking
eService
eSuppliers
ePayment
• Financing and Credit
• Risk Mgmt.
• Billing and Payment Processing• Payment Settlement (A/P and AR)• Financial Control Management
eProcure
• 3rd Party Logistics
• Order Mgmt.• Catalog
Maintenance
• On-Line ordering and tracking
• eCustomer Service and Transaction Processing
• Order Acknowledgement
eBuyer
B2B Marketplace
Catalog ?
• Usage/Demand Analysis and Forecasting
• Asset Recognition and Tracking
• Payment Info.(e.g., P-Card)
Objectives
TASKCo.com Business
TASKCo Trading NetworkInfrastructure and Operation
TASKCo Trading NetworkInfrastructure and Operation
Finance.comFinance.com
Logistics.comLogistics.com
Texti
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Texti
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Com
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on
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Com
pon
en
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ics
PC
In
du
str
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C I
nd
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IPB
an
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IPB
an
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Travel.
com
Travel.
com
Hom
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ard
ware
.com
Hom
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ard
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.com
Tran
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ati
on
.com
Tran
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.com
Med
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Med
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Knowledge Management ServicesKnowledge Management Services
Customs.comCustoms.com
企業間電子採購作業賣方 / 供應商 企業電子商務市場 買方 / 經銷商
企業採購電子商務作業系統供應商
供應商作業平台 經銷商作業平台
經銷商
• 訂單管理 • 財務管理• 交貨管理• 顧客管理
• 電子型錄• 詢價管理• 快速下單• 帳戶管理 供應鏈
Supply Chain
電子採購作業系統 需求鏈 Demand
Chain物流
資訊流
金流
B2B e-Procurement Processes Seller/Supplier e-Marketplaces Buyer/Wholesale
B2B e-Procurement Process System
Supplier Supplier
Trading Platform
• Order mgt.• Finance
mgt.• Shipping
mgt.• Customer
mgt.
• e-catalogue• inquiry/ negotiation• quick
ordering• account mgt.
供應鏈 Supply Chain
e-procurement process system 需求鏈 Demand Chain
Material Flow
Information Flow
Money Flow
Buyer/WholesaleTrading Platform
Buye/r Wholesale
Document,UpdateProcess
OperationalData
Repository(Shared)
Lotus Notes
OLAP Tools (Decision Support)
Data MiningTools (Pattern Analysis)
Wor
k
Flo
w
KNOWLEDGE MANAGEMENT PROCESSS in the TASKCo Platform
e-portal
BusinessIntelligence
KnowledgeManagement
MA
RK
ET
PL
AC
E
MA
RK
ET
PL
AC
E
ASP
Category
V.A.(one-stop)
Context
1
2
3
4
easy access
Timely news (filtering)
Document,UpdateProcess
OperationalData
Repository(Shared)
Lotus Notes
OLAP Tools (Decision Support)
Data MiningTools (Pattern Analysis)
Wor
k
Flo
w
KNOWLEDGE MANAGEMENT PROCESSS in the TASKCo Platform
e-portal
BusinessIntelligence
KnowledgeManagement
MA
RK
ET
PL
AC
E
MA
RK
ET
PL
AC
E
ASP
Category
V.A.(one-stop)
Context
1
2
3
4
easy access
Timely news (filtering)
So grab your board, take the challenge because…