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Class 2 Electronic Commerce/Business

Asper School of Business 9.613 Using Information Technology Part-Time MBA, December 2001 Instructor: Bob Travica. Class 2 Electronic Commerce/Business. Outline. Concept of E-Commerce/Business E-Commerce as Strategic IS Management E-Commerce Domains Evolution of E-Commerce

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Class 2 Electronic Commerce/Business

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  1. Asper School of Business 9.613 Using Information Technology Part-Time MBA, December 2001 Instructor: Bob Travica Class 2 Electronic Commerce/Business 9613 Informatin Systems for Management

  2. Outline • Concept of E-Commerce/Business • E-Commerce as Strategic IS Management • E-Commerce Domains • Evolution of E-Commerce • Business-to-Consumer (B2C) E-Commerce • Business-to-Business (B2B) E-Commerce 9613 Informatin Systems for Management

  3. Concept of E-Commerce/Business • “E-commerce” & “E-business” used interchangeably -- • choose your term; mine: e-commerce, external character • (skip the intranet part in the textbook!) • Definition: E-commerce refers to conducting business • transactions electronically. Instances: • - Buying & selling on the Web/Internet • - Buying, selling, & running joint projects through • other computer networks • - Exchanging & managing trading documents with EDI 9613 Informatin Systems for Management

  4. Organization 1 2 Customer/Client (Individual or Organizational) Supplier Organization 1: Electronic Supply Chain 2: Web storefront 3: Extranet-supported Alliance & Consortia 3 Partner Organization E-Commerce as Strategic IS Management • E-Commerce is a matter of strategic management • of information systems in terms of technological changes, • management implications, costs, benefits 9613 Informatin Systems for Management

  5. E-commerce Domains Our focus • Business-to-Consumer - B2C (Web storefronts; e.g.: Chapters.com) P P • Business-to-Business - B2B • - Buying & selling: Electronic supply chain & e-marketplaces • (e.g.: McDonnell Aerospace, Covisint; EDI networks between • Gillette & suppliers) • - Partnering in joint projects • Consumer-to-Consumer - C2C (e.g., e-auctions) • Other 9613 Informatin Systems for Management

  6. Evolution of E-Commerce • E-commerce boom from 1993 on (but, EDI since 1960s!): • - graphical browser to Web (textual was already in place) • - increased consumer access to Internet • - business interest in Internet • - government regulations • - “easy money” (market bubble) • - globalization (consumer markets, sourcing, money markets) • Bonanza to bonazza (calm sea) since 1999 in B2C; • B2B continues 9613 Informatin Systems for Management

  7. B2C E-commerce • Smaller part of e-commerce ScopeP BenefitsP Costs IS Issues Firm perspective: - Global reach - 24/7 operations - Direct marketing - Efficiencies (orders, customer profiling…) - Customization effects Customer perspective: - Increased selection - Price comparison - Competitive pricing (reverse auctions) - Lower transaction costs 9613 Informatin Systems for Management

  8. B2C E-commerce Scope Benefits CostsP IS Issues Firm perspective: - Technology (overhaul, problems - next slide) - Delivery, Logistics - Payment - Legal boundaries - Competition increase - Brand-making costs - Intellectual property Customer perspective: - IT have-nots - Privacy (marketers’ spamming) - Payment - Recourse 9613 Informatin Systems for Management

  9. B2C E-commerce Scope Benefits Costs IS Issues P • Technology innovation needed continually: • - on the front-end • - in integrating front-end with accounting, • inventory, purchasing, marketing systems • - in interfacing with external delivery, logistics, • payment systems • Internal Users (personnel) & External Users (customers) • Data security systems (vs. virus menagerie & sniffing) • Internet dependability and bandwidth 9613 Informatin Systems for Management

  10. B2B E-commerce • Larger part of e-commerce ScopeP BenefitsP Costs IS Issues • Buyer, Seller, Partner benefits: • - Larger market • - Savings from efficiency in supply chain • - Dynamic pricing (auctions) • - 24/7 operations (e-marketplaces) • - Linking production processes and core competences • (partners in project) 9613 Informatin Systems for Management

  11. B2B E-commerce • Technology Scope Benefits Costs P IS Issues • Losses from increased competition & • dynamic pricing • Volatile business relationships • Costs of private networks • Costs of intermediaries (e-marketplaces) • Legal boundaries (Covisint) 9613 Informatin Systems for Management

  12. B2B E-commerce • Technology innovation needed continually: • - on the back-end • - in integrating back-end with accounting, • inventory, purchasing systems • - in interfacing with trading parties, e-marketplaces • & payment systems Scope Benefits Costs IS Issues P • Data security systems (firewall, digital signature, • encryption/decryption keys) • Internet dependability and bandwidth 9613 Informatin Systems for Management

  13. Summary • E-Commerce is a strategic issue in IS management • B2B e-commerce is here to stay; B2C will have place • Costs & benefits from e-commerce demand careful analysis • IS issues of E-Commerce are complex and demanding 9613 Informatin Systems for Management

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