Slide 1.

Introduction to e-
business and
e-commerce
Slide 1.2

Management issues
 How do we explain the scope and implications of e-business and e-commerce
to staff?
 What is the full range of benefits of introducing e-business and what are the
risks?
 How do we evaluate our current e-business capabilities?
 Slide 1.3

The impact of the Internet on business

 Andy Grove, Chairman of Intel, one of the early adopters of e-commerce,
has made a meteorological analogy with the Internet. He says:
Is the Internet a typhoon force, a ten times force, or is it a bit of wind? Or is
it a force that fundamentally alters our business? (Grove, 1996)
Slide 1.4

E-business opportunities
 Reach
 Over 1 billion users globally
 Connect to millions of products
 Richness
 Detailed product information on 20 billion + pages indexed by Google. Blogs, videos,
feeds…
 Personalized messages for users
 Affiliation
 Partnerships are key in the networked economy
Slide 1.5

What is E-business?

E-business (electronic business) is the conducting of business on the

 Internet, not only buying and selling but also servicing customers
and collaborating with business partners.

The processes and tools that allow an organization to use Internet-

 based technologies and infrastructure, both internally and
externally, to conduct day to day business process operations.

 Stands for electronic business and refers to any kind of sales,

services, purchasing or commerce on the Internet.

A new-tech jargon word used more for marketing than for technical
description. Most commonly it broadly refers to conducting business
 over the Internet (email and web) by communicating and perhaps
transacting (buying and selling) with customers, suppliers, and
business partners.
Slide 1.6

What is E-business?

Web

Universal Access

Standards

e-business
Using internet technologies to
transform key business processes

IT

Data

Applications

Core business processes
e-business = Web + I/T 
Reliability, security
and availablitiy
Slide 1.7

E-business types:

C2C B2B
B2C

CONSUME BUSINESS
RS
C2

A
A

B2
ADMINISTRATION
Slide 1.8

What is Consumers to
Consumers (C2C) ?

Abbreviation for consumer-to-consumer commerce; that

 is, commerce with no middle business people The most
notable examples are Web-based auction and classified
as sites. Most large venues for such models (for example,
eBay and Classifieds2000) are quickly permeated by
consumers who participate so actively and regularly that
they become small businesses for them.
C2C stands for consumer to consumer electronic commerce.
 The Internet has facilitated new types of C2C although it is
important to note that this kind of commerce -- in the form of
barter, yard sales, flea markets, swap meets, and the like -- has
existed since time immemorial. Notably, most of the highly
successful C2C examples using the Internet actually use some
type of corporate intermediary and are thus not strictly "pure
play" examples of C2C.
Slide 1.9

What is Business to
Business (B2B) ?

B2B stands for "business-to-business," as in

 businesses doing business with other businesses. The
term is most commonly used in connection with e-
commerce and advertising, when you are targeting
businesses as opposed to consumers.
 On the Internet, B2B (business-to-business), is the
exchange of products, services, or information
between businesses. B2B is e-commerce between
businesses. B2B Communication using XML over
HTTP B2B - the basics
 Business-to-business electronic commerce (B2B)
typically takes the form of automated processes
between trading partners and is performed in much
higher volumes than business-to-consumer (B2C)
applications.
Slide 1.10

What is Business to
Consumers (B2C) ?

 Refers to businesses selling products or services to

end-user consumers.

 B2B stands for transaction activities involving two

business entities (business-to-business transaction).
B2C stands for transaction activities involving a
business and a consumer (business-to-consumer
transaction).
 Electronic commerce comprises commercial
transactions, involving both organisations and
individuals. From the technical point of view e-
commerce is the processing and transmission of
digitised data. E-commerce decreases the distance
between producers and consumers. Consumers can
make their purchase without entering a traditional
shop.
Slide 1.11

What is Business to
Administration (B2A) ?

Short for business-to-administration, also known as e-

 government. B2A is the idea that government agencies
and businesses can use central Web sites to conduct
business and interact with each other more efficiently
than they usually can off the Web. FindLaw is an
example of a site offering B2A services -- a single
place to locate court documents, tax forms and filings
for many different local, state and federal government
organizations
Slide 1.12

E-business category

 E-banks
 E-trade
 E-consulting
 E-engineer
 E-learning
 E-mail
 E-marketing
 E-transactions
Slide 1.13

An example for e-bank

Slide 1.14

An example for e-trade

Slide 1.15

An example for e-consulting

Slide 1.16

An example for e-engineering

Slide 1.17

An example for e-learning

Slide 1.18

An example for e-mail

Slide 1.19

An example for e-marketing

Slide 1.20

E-business infrastructure

INTERNET
ACCESS,
HARDWARE SOFTWARE SERVICES,
E-payment,
CERTIFICATES,
ADVERTISEMENT
Slide 1.21

Virtual Markets

goods,
Needed, measure services,
price offer
deadline and
circumstance
s
buyer seller
s
mediator
buyer s seller
Good Good
s
sA sB
buyer seller
s finished orders order
s
Virtual connections to other
markets
Slide 1.22

The path of the deal

buyer seller
s

buyer seller
s

buyer seller
s
Slide 1.23

How safe are e-Business financial

transactions?

New security technology like 128-bit SSL encryption ensures the safety and privacy of both
 you and your customers, and is built into the latest e-Business software tools. Your security
and privacy is a top priority with all e-Business providers.
Secure VPN

SERVER
WEBSERVER
SERVER
Merchan
Merchan
INTERN Merchan
t
tt

WEB
WEB
Consumer
ET SSL Storefro
Storefro
Storefro
nt
nt
Acquiring nt
BANK VIRTUAL
POS
Credit Card
Network
PAYMENT
GATEWAY
Slide 1.24

Can my business benefit from e-

Business?

Reduce administrative and operating costs

 Reduce inventory costs

 Reduce the cost of procurement

Improve customer service and satisfaction

 Streamline procurement procedures


Increase communication efficiency and interaction with
employees, vendors, customers and strategic partners
 Increase revenues and profit margins
Slide 1.25

Summary and examples of transaction alternatives between businesses,

Figure 1.8
consumers and governmental organizations
Slide 1.26

Figure 1.2 The distinction between buy-side and sell-side e-commerce

Slide 1.27

Figure 1.3 Three definitions of the relationship between e-commerce and e-business
Slide 1.28

Figure 1.4 The relationship between intranets, extranets and the Internet
Slide 1.29

Figure 1.7 Evolution of web technologies

Source: Adapted from Spivack (2007)
Slide 1.30

Cost/efficiency and competitiveness drivers

 Cost/efficiency drivers
 Increasing speed with which supplies can be obtained
 Increasing speed with which goods can be dispatched
 Reduced sales and purchasing costs
 Reduced operating costs
 Competitiveness drivers
 Customer demand
 Improving the range and quality of services offered
 Avoid losing market share to businesses already using e-
commerce
Slide 1.31

Figure 1.10 Usage of different e-business services in European countries

Source: European Commission, 2008
Slide 1.32

Figure 1.12 Barriers to development of online technologies

Source: DTI (2002)
Slide 1.33

Figure 1.13 A simple stage model for buy-side and sell-side e-commerce
Slide 1.34

Figure 1.14 Variation in different online activities by gender

Source: UK National Statistics (2006) Individuals accessing the Internet – Report from the UK National Statistics Omnibus Survey. Published online at www.statistics.gov.uk
Slide 1.35

Market Value of an Organization

Tangible Assets Intangible Assets
• Buildings • Skills & competencies
• Equipment • Motivation of employees
• Furniture • Databases
• Cash • Information technologies
• Efficient & responsive processes
• Customer loyalty & relationships

Value of tangible assets

1982: 62%
1992: 38%
2000: 10-15%
Source: Brookings Institute
1-1-35
Slide 1.36

Major Industry trends

• Consumer trends
• Service/process trends
• Organizational trends
• Enterprise technology trends

1-1-36
Slide 1.37

Consumer Trends
• Speed of service
• Self-service
• Integrated solutions, not piecemeal products

1-1-37
Slide 1.38

Service/Process Trends
• Convergence of sales & service: customization and
integration
• Ease of use: make service consistent and reliable
• Flexible fulfillment and convenient service delivery:
streamline your supply chain

1-1-38
Slide 1.39

Organizational Trends
• Contract manufacturing: becoming brand intensive,
not capital intensive
• Retain the core, outsource the rest: Business process
outsourcing
• Increasing process transparency and visibility
• Continuous innovation and employee retention

1-1-39
Slide 1.40

Enterprise Technology Trends

• Enterprise applications: Connect the corporation
• Infrastructure convergence: Increasing melding of
voice, data and video
• Multichannel integration: computer telephony
integration and voice recognition
• Wireless applications enter the mainstream
• Leveraging legacy investment: The rise of middleware
for systems integration

1-1-40
Slide 1.41

Business Drivers of the New Economy

 Global financial interdependence
 Deregulation
 Unrestricted capital flows
 Digitization
 Global communication and transportation
 New geopolitical realities

1-1-41
Slide 1.42

Key Business Challenges

• Agility and Speed
• Focus on core competencies and processes
• Customer centrality
• Mass customization
• Flexible IT architecture
• Interoperability of infrastructure and
applications portfolios

1-1-42
Slide 1.43

New Business Models and Structures

• Aggregators
• Portals
• Info-mediaries
• E-tailers
• Hybrids
• Virtually integrated
• Mega-mergers
Transformation:
From Product to Information

1-1-43
Slide 1.44

E-Business is About Business

Business
Driving IT

E-Business

IT Driving
Business

1-1-44
Slide 1.45

Major Benefits of eBusiness

 Global reach
 Reduced cost
 Convenience
 Higher productivity and efficiency

1-1-45
Slide 1.46

E-Business
E-Business is about enabling organizations to
cohesively bring together their processes and
Internet technologies for cost effectiveness,
efficiency and better relationships between partners.

1-1-46
Slide 1.47

E-Business
E-Business is the electronic connection of business operations
to customers, suppliers, employees and other partners. It
includes, but not limited to, product marketing, order entry,
inventory tracking, order fulfillment and after-sales support.

1-1-47
Slide 1.48

E-Commerce
E-Commerce has a narrower definition and only involves
buying and selling goods and services over the Internet. It is
normally limited to catalogs, order entry, authorization and
delivery confirmation.

1-1-48
Slide 1.49

The E-Business Network

Intranet and
Extranet Network
Network
Hardware
Software
E-Business
Network
Enabling Networking
Technology Vendors
E-
Commerce
Applications

1-1-49
Slide 1.50

eBusiness: Technologies and Skills

• Web technologies
• Database technologies
• Integration technologies
• Networking technologies
• Security technologies
• CIW Tracks:
– Designer
– Developer
– Administrator

1-1-50
Slide 1.51

What is Important in an E-Business Network?

 Functionality
 Reliability
 Security
 Speed
 Scalability
 Access Control

1-1-51
Slide 1.52

Why Does an E-Business Network

Matter to a User?
 To share knowledge and reap productivity gains by finding
information faster
 To communicate faster with clients and suppliers
 To provide options for teleworking
 To implement web services
 To enable teams to work collaboratively irrespective of
geography
 To better automate business procedures

1-1-52
Slide 1.53

Why Does an E-Business Network

Matter to an Enterprise?
 To create fundamental changes in business processes
 To enable fast responses and agile maneuvering
 To negotiate more effectively with suppliers
 To create competitive advantage
 To provide instant access to global markets
 To lower costs
 To enable the convergence of voice, data and video
 To use the e-business as a key to business operations

1-1-53
Slide 1.54

CEOs are Focusing on These

E-Business Issues
 Building customer loyalty
 Achieving market leadership
 Streamlining business processes
 Creating new products/services
 Ascertaining compliance
 Reaching new markets

1-1-54
Slide 1.55

E-Business Best Practices

 Personalize relations
 Maintain visitor privacy
 Make your site easy to use
 Manage visitor perceptions
 Maintain site consistency
 Manage business knowledge
 Response quickly

1-1-55
Slide 1.56

E-Business Hype Cycle

Visibility

Peak of expectation

Dot Com

True E-business
WWW
Enlightenment
Disillusionment

Tech Trigger

1990-96 97 98 99 2000 01 02 03 04 05 06 07 08 09 2010

Source:1-1-56
Gartner Group
 Worldwide IT Spending Growth
Slide 1.57

(New Scenario)

%
12
11.3
10.6 10.5
10 10
10

8
7 Old
6 6.1
New
4

2 2.4

0
2000 2001 2002 2003

Source: IDC, October 18, 1-1-57

2001
Slide 1.58

Global E-Readiness
It describes the extent to which a country’s business environment
is conducive to Internet-based commercial opportunities
 EIU E-Readiness Assessment Model 2001
 Connectivity (30%)
 Business Environment (20%)
 E-Commerce Adoption (20%)
 Legal Environment (15%)
 Supporting E-Services (10%)
 Social and Cultural Environment (5%)

1-1-58
 Grouping of Countries by E-readiness Ranking
Slide 1.59

 
E-business leaders E-business E-business followers E-business
contenders laggards

US (8.73) Ireland (7.28) Greece Bulgaria (3.38)

Australia France Czech Republic China
UK Austria Hungary Ecuador
Canada Taiwan Chile Iran
Norway Japan Poland Romania
Sweden Belgium Argentina Ukraine
Singapore New Zealand Slovakia Algeria
Finland South Korea Malaysia Indonesia
Denmark Italy Mexico Nigeria
Netherlands Israel South Africa Kazakhstan
Switzerland Spain Brazil Vietnam
Germany Portugal (6.21) Turkey Azerbaijan
Hong Kong (7.45) Colombia Pakistan (2.66)
Philippines

Egypt
Peru
Russia
Sri Lanka
Saudi Arabia
India
Thailand
Venezuela
 
.Source: The Economist Intelligent Unit, 2001
1-1-59
Slide 1.60

Conclusions
 E-Business is about business done in electronic medium

 IT deployment decisions are business/investment decisions.

 IT investments make well-managed companies better, and poorly-

managed companies worse.

1-1-60