BUSINESS PLUG-IN B11

1. BUSINESS PLUG-IN B11 Ebusiness

2. LEARNING OUTCOMES • Describe the four common tools an organization can use to access Internet information • Compare ISPs, OSPs, and ASPs. Be sure to include an overview of common services provided by each • Describe how marketing, sales, financial services, and customer service departments can use ebusiness to increase revenues or reduce costs

3. LEARNING OUTCOMES • Explain why an organization would use metrics to determine a Web site’s success • Identify the different types of egovernment business models • Define m-commerce and explain how an egovernment could use it to increase its efficiency and effectiveness

4. INTRODUCTION • Pure play – an Internet retailer that has no physical store, such as Expedia.com and Amazon.com • Ebusiness – conducting business on the Internet, not only buying and selling, but also serving customers and collaborating with business partners • Ebusiness model – an approach to conducting electronic business through which a company can become a profitable business on the Internet

5. Accessing Internet Information • Four tools for accessing Internet information • Intranet – internalized portion of the Internet, protected from outside access, for employees • Extranet – an intranet that is available to strategic allies • Portal – Web site that offers a broad array of resources and services • Kiosk – publicly accessible computer system that allows interactive information browsing

6. Providing Internet Information • Three common forms of service providers • Internet service provider (ISP) –provides individuals and other companies access to the Internet • Online service provider (OSP) – offers an extensive array of unique Web services • Application service provider (ASP) – offers access over the Internet to systems and related services that would otherwise have to be located in organizational computers

7. Providing Internet Information • Common ISP services include: • Web hosting • Hard-disk storage space • Availability • Support

8. Providing Internet Information Wireless Internet service provider (WISP)

9. Providing Internet Information • ISPs, OSPs, and ASPs use service level agreements (SLA) which define the specific responsibilities of the service provider and set the customer expectations • Review Figure B11.3 for a listing of the top ISPs, OSPs, and ASPs

10. Organizational Strategies for Ebusiness • Primary business areas taking advantage of ebusiness include: • Marketing/sales • Financial services • Procurement • Customer service • Intermediaries

11. MARKETING/SALES • Generating revenue on the Internet: • Online ad (banner ad) - box running across a Web page that contains advertisements • Pop-up ad - a small Web page containing an advertisement • Associate programs (affiliate programs) - businesses generate commissions or royalties • Viral marketing - a technique that induces Web sites or users to pass on a marketing message • Mass customization - gives customers the opportunity to tailor products or services

12. MARKETING/SALES • Generating revenue on the Internet: • Personalization - occurs when a Web site can fashion offers that are more likely to appeal to that person • Blog - Web site in which items are posted on a regular basis and displayed in reverse chronological order • Real simple syndications (RSS) - a Web feed format used for Web syndication of content • Podcasting - the distribution of audio or video files, such as radio programs or music videos, over the Internet to play on mobile devices

13. MARKETING/SALES • Generating revenue on the Internet: • Search engine optimization (SEO) - a set of methods aimed at improving the ranking of a Web site in search engine listings • Spamdexing - uses a variety of deceptive techniques in an attempt to manipulate search engine rankings, whereas legitimate SEO focuses on building better sites and using honest methods of promotion

14. FINANCIAL SERVICES • Online consumer payments include: • Financial cybermediary • Electronic check • Electronic bill presentment and payment (EBPP) • Digital wallet

15. FINANCIAL SERVICES • Online business payments include: • Electronic data interchange (EDI) • Value-added network (VAN) • Financial EDI (financial electronic data interchange)

16. FINANCIAL SERVICES Electronic Trading Network

17. PROCURMENT • Maintenance, repair, and operations (MRO) materials (also called indirect materials) – materials necessary for running an organization but do not relate to the company’s primary business activities • Eprocurement - the B2B purchase and sale of supplies and services over the Internet • Electronic catalog - presents customers with information about goods and services offered for sale, bid, or auction on the Internet

18. CUSTOMER SERVICE • Customer service is the business process where the most human contact occurs between a buyer and a seller • Ebusiness strategists are finding that customer service via the Web is one of the most challenging and potentially lucrative areas of ebusiness • The primary issue facing customer service departments using ebusiness is consumer protection

19. Consumer Protection

20. Consumer Protection • Ebusiness security • Encryption • Secure socket layer (SSL) • Secure electronic transaction (SET)

21. INTERMEDIARIES • Intermediaries – agents, software, or businesses that bring buyers and sellers together that provide a trading infrastructure to enhance ebusiness • Reintermediation – using the Internet to reassemble buyers, sellers, and other partners in a traditional supply chain in new ways

22. Measuring Ebusiness Success • Most companies measure the traffic on a Web site as the primary determinant of the Web site’s success • However, a large amount of Web site traffic does not necessarily equate to large sales • Many organizations with high Web site traffic have low sales volumes

23. Measuring Ebusiness Success • Web site traffic analysis can include: • Cookie • Click-through • Banner ad • Interactivity

24. Behavioral Metrics • Clickstream data tracks the exact pattern of a consumer’s navigation through a Web site • Clickstream data can reveal: • Number of pageviews • Pattern of Web sites visited • Length of stay on a Web site • Date and time visited • Number of customers with shopping carts • Number of abandoned shopping carts

25. Behavioral Metrics • Web site metrics include • Visitor metrics • Exposure metrics • Visit metrics • Hit metrics

26. New Trends in Ebusiness: Egovernment and Mcommerce • Egovernment -involves the use of strategies and technologies to transform government(s) by improving the delivery of services and enhancing the quality of interaction between the citizen-consumer within all branches of government

27. New Trends in Ebusiness: Egovernment and Mcommerce

28. New Trends in Ebusiness: Egovernment and Mcommerce • Mobile commerce - the ability to purchase goods and services through a wireless Internet-enabled device.

29. CLOSING CASE ONEMail with PostalOne • United States Postal Service’s (USPS) productivity has grown by only 11 percent over the past three decades • USPS is pursuing several ebusiness projects to help increase growth including: • NetPost Mailing Online • Post Electronic Courier Service • NetPost.Certified • EBillPay

30. CLOSING CASE ONE QUESTIONS • Do you think the USPS’s steps are far-reaching enough to ensure its relevance in ebusiness? • What other strategic alliances, akin to its partnership with CheckFree, can the Postal Service develop to stay competitive? • Why would the USPS compete in a market that private companies already serve well?

31. CLOSING CASE ONE QUESTIONS • How can the USPS use portals to help grow its business? • How can the USPS use ebusiness sales and marketing techniques such as blogs, podcasts, and SEO to improve its business? • How can the USPS use ASPs to improve its business?

32. CLOSING CASE TWOMade-To-Order Businesses • Mass customization is a new trend in the retail business • Lands’ End, Nike, and Stamps.com are a few of the companies using mass customization to enhance the way they do business

33. CLOSING CASE TWO QUESTIONS • What role does ebusiness play in a mass customization business strategy? • How can Lands’ End use additional sales and marketing ebusiness techniques to improve its business? • How can Nike use ebusiness financial services to improve its business?

34. CLOSING CASE TWO QUESTIONS • How can Stamps.com use ASPs and electronic bill payment to improve its business? • Choose one of the examples above and analyze its ebusiness approach. Would you invest $20,000 in the company? • Choose one of the examples above and explain how the company is attempting to gain a competitive advantage with mass customization and personalization. How could this company use podcasts, blogs, and SEO to improve its business?