E-Business E-Commerce

E-BusinessE-Commerce

William R. Mussatto

CyberStrategies, Inc.mussatto@csz.com

8/15/2000

E-Commerce Topics

• E-Commerce Overview

• B2B: Business-to-Business– Procurement Models

• B2C: Business-to-Consumer

• C2C: Consumer-to-Consumer

E-Commerce OverviewContext: Three Components

• Supporting Infrastructure

• Electronic Business Processes (how business is conducted)

• Electronic Commerce Transactions (buying and selling)

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

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

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

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)

E-Commerce OverviewE-Business Process Examples:

Internal or Management-focused

• Automated Employee Services

• Training

• Information Sharing

• Video Conferencing

• Recruiting

• Advantages?

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

E-Commerce Overview

• Not Really New– EDI: Electronic Data Interchange

• B2B

• Internet Has Globalized E-Commerce– non-proprietary, common, communications

infrastructure

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”

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.

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.

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).

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

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

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

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.

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

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

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

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

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.

Extra

• Detailed walk through simple shopping cart system.

• Discussion of Industrial Strength E-Commerce as IBM sees it.