e -Business Architecture Overview

1. e-Business Architecture Overview Issues for higher education Deborah Whitten Information Technology Analyst Purdue University West Lafayette, IN 765.494.9254 dwhitten@purdue.edu Jennifer Cobb, Manager Strategic Special Projects Vanderbilt University Nashville, TN 615.343.1837 jenny.cobb@vanderbilt.edu

2. Morning Agenda • Introductions • e-Business growth and opportunities • Business models, terminology and architectures • Infrastructure, platforms and technology • Drivers for higher education • Payment technologies

3. Afternoon Agenda • e-Business barriers for higher education • Strategic thinking and business process redesign • Key management issues • Organization and culture issues • Closing thoughts

4. Introductions • Session presenters • Logistics, facilities, refreshments, etc., • Participants profile • Questions and comments are welcome!

5. e-Business Impact Growth and opportunities

6. What is e-Business? • e-Business is a shorthand way of describing the integration of business strategies, processes and technologies “e-Business applications are those that enable and manage relationships between an enterprise, its functions and processes and those of its customer, suppliers, value chain, community or industry. These applications may not, themselves, be enterprisewide but are aimed at optimizing external relationships.” Source: Gartner Group

7. Other definitions • “E_business is about using the convenience, availability and world-wide reach to enhance existing businesses or creating new virtual business” Daniel Amor, Hewlett Packard • “A secure, flexible and integrated approach to delivering differentiated business value by combining the systems and processes that run core business operations with the simplicity and reach made possible by integrated technology” IBM

8. e-Business Components • e-Business encompasses • E-commerce (EC): Business to Business (B2B), Business to Consumer (B2C) • Customer relationship management (CRM) • Supply Chain Management (SCM) Supply Chain Planning (SCP) • Business Intelligence (BI) • Knowledge Management (KM) • Collaboration Technologies (CT) • Available to Promise (ATP) • EDI and E-mail were precursors • more...

9. e-Business=EC+CRM+SCM+BI+KM+CT Supply Chain Management Customer Relationship Management “Virtual Partners” informal information sharing deals Business Partners Administration and operations Distribution channels Customers Potential customers / influencers BI, KM, and CT for external information Product and services creation Legally defined Enterprise Logistics and fulfillment Potential competitors Supply Chain Suppliers Marketing, sales and, service Industry workers Product and services creation Electronic Commerce Back Office Web Commerce Front Office Source: Gartner Group

10. e-Growth of Everything • Growth of commerce across the Web • Business sales will rise from $43 billion in 1998 to $1.3 trillion in 2003 • Business-to-business (B2B) e-Commerce is large and will dwarf business-to-consumer (B2C) e-Commerce • Successful businesses will be expected to have web-commerce visibility • New intermediaries are helping to drive the growth of the market and securing formidable layer positions - will we see education micromarkets?

11. e-Growth of Everything • Growth of users • 500+ million Web Users and 700+ million connected devices by year-end 2003 • Growth of individual buying-power will drive productivity and services • New, more competitive business models (e.g., build-to-order) will also be enabled • Buyers will demand more personalization, customization and access to information • Immediate value can be captured through lower transaction and product costs

12. e-Growth of Everything The e-growth of ____________ over the next ___ years (fill in the blanks) *Web users *Connected Devices *B2B Commerce *Micro-markets in higher education *Online courses *Investment in the internet *Distance Learners *New e-businesses *B2C Services and revenue

13. Growth of Technology / Integration Increasing Business Value 2000 - 2005 Transformation Additional Features: -SC optimization -CRM apps -Common platform -Industry-specific app engines -Functional apps -Customer -Real-time ATP -Advanced personalization $5M-$50M $500K-$5M 1998 - 2003 Transaction Additional Features: -e-commerce -EDI supports -Communities -SCP apps -ERP front end -Customer self-service $5K-$500K 1997 - 2000 Interaction Additional Features: -Intranet aps -Interactivity -Personalization -Basic Search -Linked Sites 1996 - 1999 Presence Features -Marketing information -Brochures Increasing Application Cost Source: Gartner Group

14. Multiple Technology Approaches • Companies are utilizing two major technology approaches • Best-of-Breed • ERP modules • Most software vendors expect major growth in software and services • No one vendor has market leadership, but the top four are: • Ariba • CommerceOne • Oracle • SAP Software Selection Appears to Be Split Between ERP and Best-of-Breed Solutions

15. Investment Size Companies Plan to Invest Significant Dollarsto Develop Their e-Business Procurement Solutions Investment estimates ranged from $1-$10M with an average of $2 - $4M.

16. Planned Savings Respondents Expect Substantial Savings 15+% 10-14% EXPECTED SAVINGS AS % OVER TWO YEAR PERIOD 5-9% < 5% % OF RESPONDENTS Source: Deloitte Consulting

17. Reasons for Going Online • Expand market reach • Collect experience with a new customer segment or customer location • Visibility • Generate more visibility in your target market and gain mind share • Responsiveness • Increase responsiveness to customers and partners

18. Reasons for Going Online • New services • Here-to-fore unrealistic services • Can only be transacted through e-business • Strengthen business relationships • Real-time data increase the profit (value) for every partner involved • Cost-reduction • Channel conflicts

19. How the Web Enables e-Business Business models, terminology and architectures

20. e-Business Opportunities • Business to Employee (B2E) • within the organization • utilizes an Intranet • Business to Business (B2B) • between two organizations • utilizes an Extranet • Business to Consumer (B2C) • sales of goods and services via a web site • utilizes the Internet

21. Internet Presence of Enterprises Phase 1: Hello, I’m online too Phase 2: Structured web site Phase 3: Trying e-commerce Phase 4: Doing e-business Phase 5: Pervasive e-business Phase 6: One-world, one computer all devices interconnected (1) information resource applications transparent to devices object orientedtechnology limited structure and product information no search engine no direct messaging with company detailed product information keyword search capabilities email message exchange with company • selling goods online • no interface to back-end systems • not really secure web site connected to Intranet applications uses secure protocols cost savings and profits realized connect and transmit data using any device future Internet technology Most companies are between Phase 2 and Phase 2 Daniel Amor, Hewlett-Packard Professional Books

22. e-Business Categories • e-Auctioning:electronic bidding for goods • e-Banking:online access to execute financial transactions • e-Commerce:online trade of goods and services • e-Directories:online repositories for retrieving information • e-Engineering:open source development • e-Franchising:distribution of goods sold exclusively through franchise partners

23. e-Business Categories • e-Gambling:electronic casino gaming • e-Learning:internet-based training • e-Mailing:electronic communication • e-Marketing:personal one-to-one marketing over the internet • e-Operational resource management:connecting buyers and suppliers for exchange of goods • e-Supply:supply chain management • e-Trading:buy and sell stock electronically

24. Basic e-Business Architecture Seller Storefront system Backoffice system Internet Inventory mgmt Buyer Web catalog Order processing & fulfillment Web commerce server Accounting system Payment gateway Bank Enterprise firewall

25. Multi-tier e-Business Architecture Back office servers and applications Commercial Site Internet Load Balancer Commerce servers and applications Payment gateway Enterprise firewall

26. Online Shopping Features • Search engine • Shopping basket • Payment • Reporting • Terms and conditions • Web design templates • Database • Interface to applications

27. The Online Shopping Storefront • May host a web catalog for selecting products • Enables the buyer transaction • verify selection • extend prices • total order • calculate tax • select payment method • determine shipping choice • present roll-up order to buyer • confirm order to buyer

28. The Online Shopping Website • Low order volume, few products offered • few web pages with link to html form • low cost and development effort • High order volume, large product offering • catalog search and browse capabilities • may include configurator • higher cost, development, and maintenance • retains customer preferences and personal data • complex ordering methods

29. The Web Catalog • Presents information about goods and services offered for sale, bid, or auction • single supplier catalog • aggregated catalog with multiple suppliers • hosted by third party provider • Can promote navigational “layering” of information • May provide links to other sources of information and real-time inventory data • Designed to merchandise products and company

30. Catalog Search Engines • Capabilities vary widely and can be highly sophisticated • keyword or full text • parametric • associative • Configurators • quote-to-delivery • assembles complex products • Design is driven by buyer interaction • hierarchical browsing • serendipitous discovery

31. The Shopping Cart • A metaphor describing the process by which the buyer selects items for purchase • Features include: • reviewing items • removing items • reviewing quantities • displaying cumulative totals on each page • Persistent shopping cart remembers the buyer’s selections between sessions

32. Merchandising • Merchandise Management Strategies • target sales promotions to customers based on their buying habits • adds “Personalization” by drawing on the customer profile and observing their interaction with the catalog • uses “Micro Marketing” techniques to analyze aggregate data about products and customers • Merchandise Management Tools • capture metrics for ongoing evaluation • assist in the refinement of workflow design

33. Tracking Customers • In order to track customers they need to be identified • Identification can be achieved through; • Basic authentication • Cookies • Domain name • IP address • Personalized URLs • Strong authentication

34. Website Development Alternatives • Buy a ready-made solution • higher costs, less time to implement • requires programming skills for customizations • Electronic hosting solutions • lower cost, less time to implement • easier to implement and administer • less flexibility with customizations • Build the system from scratch • higher cost, longer time to implement • requires Perl, Java, or C++ programming skills • highly customizable to business rules

35. Website Shopping Products • Broadvision One-to-One Commerce • HP Emporium • IBM Net.Commerce • I-Cat Electronic Commerce Suite • Intershop Online • Internet Factory Merchant Builder • Microsoft Commerce Server • ElMedia Netshell • Open Market LiveCommerce

36. Internet Basic B2B Architecture E-mail, EDI Customer Supplier Application Server Fax Server

37. Web server Application Database Internet ODS DSS Mainframe System Interfaces Basic B2B Architecture Customer E-mail, EDI Directory Service Supplier Fax Server FTP Server

38. Other B2B Components • Supplier catalog aggregation & data rationalization • internally or externally hosted • Global Standard Product and Service Classifications (SPSC) codes released in February 1999 • improved access to product and price • Supply Chain Management (SCM) • optimizes the entire logistics, production, and distribution process from requiring raw materials, to scheduling and shipping products • Preferred supplier agreements • negotiated discounts between 5% and 10% • discourages maverick purchasing

39. Other B2B Components • Complex payment and reconciliation methods • promotes use of purchasing cards • electronic bank reconciliation • Evaluated Receipt Settlement (ERS) • Workflow approval process • enforces approvals through ordering rules • reduces cycle time from requisition to product delivery • better access to order status • Receiving

40. Purdue B2B System Replaces: • Form 12 purchase requisitions • Standing Orders • Form 100’s • SIRS (Stores Inventory Request System) • Fox Pro Purchasing Card database • Invoice Vouchers for payment of supplier invoices

41. Ariba Buyer is Used to; • Create purchase requisitions • Route purchase requisitions for approval • Check status of purchase requisitions • Approve purchase requisitions • Mark orders as received • Reconcile Pcard orders • Build queries and reports

42. e-Business Overview Infrastructure, platforms and technology

43. The Internet Protocol Suite Application Layer Application Layer Protocols FTP, SMTP HTTP Presentation Layer Session Layer Transport Layer (TCP) Network Layer (IP) HTML Link Layer (FDDI, PPP) Transport Layer

44. Internet A Global View of an Intranet Gateway Router Firewall Subnet Subnet

45. e-Business Platforms • Business need should dictate platform need • High-end commercial Unix systems • expensive up-front costs • scalable over multiple processors • fast and stable • Low-cost Intel operating systems • Linux, Windows NT, FreeBSD, NetBSD, MacOS X • larger pool of software available • easy to administer • less scalable

46. 7 Steps for Success Find a champion - Get management involved and explain the benefits 1 Plan for change - Technology will change the corporate culture 2 Define a pilot project - Don’t try to change everything at once 3 Estimate the costs - Training, maintenance and support will be the majority of costs 4 Measure productivity - Measure it before and after the pilot has been implemented 5 Re-engineer business processes - include technology, but don’t let it dominate 6 Learn as you go - Make adjustments while you implement 7

47. Internet Web Browsers • Browsers understand and process HTML • Need to conform to web standards set by; • Internet Engineering Task Force (IETF) • World Wide Web Consortium (W3C) private mail systems used in companies • public mail systems for individuals • Most popular browsers are; • Netscape Communicator • Internet Explorer • Opera • Lynx

48. Content Preparation • Most web sites contain HTML text, graphics, animation, interaction and sound • Managing these sites requires four types of software; • Web Page Editors • Graphics software • Multimedia tools • Sound software • Content Management Systems • facilitates control and organization of web site • automates publishing of documents

49. Mail and Collaboration Systems • Private mail systems used in companies and run by themselves • Lotus Notes • Microsoft Exchange • Novell • Public mail systems for individuals hosted by service providers • Software.com InterMail • Netscape • Sun SIMS • Hewlett Packard OpenMail • Netscape • Sendmail • MCIS

50. Enterprise Middleware • Network and systems management architecture • should manage all networks and systems centrally • should support open systems multi-vendor environments • should support multi-platform infrastructures • should integrate all necessary functions • should be extensible and customizable • Popular systems management tools • Open View - Hewlett Packard • Unicenter TNG - Computer Associates • Tivoli Enterprise - IBM