CS5038 The Electronic Society

1. CS5038 The Electronic Society • 1. Overview of Electronic Commerce • Background • Definitions • Perspectives • Variations • Business Models • Pressures on businesses • Responses of businesses • The Networked Business • Benefits • Problems • Also look at 2. Retailing (next) and then 3. Customers

2. General Business Terminology • Transactions : Exchange of goods, services, information, money. • Supply Chain: entire system (directly) concerned with getting products and services from a supplier to a customer. • Business process tasks: undertaken by business in producing goods and services • Broker: middleman who helps facilitate transaction • Tendering: process of bidding to provide a good or service.

3. 4-slide Microeconomics • Most firms basically try to maximize profits (in some overall sense) • Profit = revenue – cost • Two basic ways to increase profits. • Within those various strategies.

4. 4-slide Microeconomics (B) • ``One man draws out the wire, another straights it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head: to make the head requires two or three distinct operations: to put it on is a particular business, to whiten the pins is another ... and the important business of making a pin is, in this manner, divided into about eighteen distinct operations, which in some manufactories are all performed by distinct hands, though in others the same man will sometime perform two or three of them.” • Adam Smith An Inquiry into the Nature and Causes of the Wealth of Nations, 1776.

5. 4-slide Microeconomics (C) • Theory of the firm • why they exist, why they reach the size they do, why they are organized a certain way, why they behave in certain ways. • Transaction costs (internal and external)

6. 4-slide Microeconomics (D) • Information economics • Information can have a value • Broker often makes money by using information that it would be difficult for non-specialists to get. • Asymmetric information: Sometimes different participants in a market have different amounts of information about each other. • Car dealer vs. customer • Insurance company vs. customer

7. E-Commerce Definitions E-commerce : Any kind of transaction done, partly, or completely, over a (computer and telecommunications) network `E-commerce’ also refers to the processes used by participants in such transactions.

8. E-commerce Definitions • Intrabusiness (Organisational) – internal to organisation, intranet: e.g. • Between business units • From businees to employees • Between employees

9. E-commerce definitions • Interorganisational Information System (IOS) – information between organisations; used for collaborative commerce • Often used to improve efficiency of supply-chain • E.g. when vendor of some product starts to run low in stock IOS can share that information back to the suppplier, who can then ship more stock. • Electronic Data Interchange (EDI) standards

10. E-commerce definitions Business-to-business (B2B) - online transactions (e.g. purchases) with other businesses

11. E-commerce definitions Business-to-consumer (B2C) - online transactions between businesses and consumers

12. E-commerce definitions Business-to-employee (B2E) - information and services made available to employees online (subset of intrabusiness).

13. E-commerce definitions • Consumer-to-consumer (C2C) - online transactions between consumers

14. E-commerce definitions • Consumer-to-Business (C2B) – consumers seek sellers or sell services to organisations. • E.g. Price comparison websites • Freelancers http://www.elance.com/ , http://www.guru.com/ , http://www.peopleperhour.com/ • E.g. affiliate schemes, say, a link from a consumer’s web-page to an online retailer, and the consumer gets rewarded either per-click or per-sale.

15. E-commerce definitions Peer-to-Peer (P2P) – direct transactions without middlemen. E.g. consumers exchange games, DivX videos, MP3 music

16. E-commerce definitions Government-to-Citizens (G2C) – government provides services and information to citizens Example: http://dvlaregistrations.direct.gov.uk/

17. E-commerce definitions • Exchange – system to host buyers and sellers; dynamic pricing; matching services • Examples: • http://www.adpdsi.com/uk/Products/Layered/ADP_Exchange/default.asp

18. E-commerce definitions Exchange-to-Exchange (E2E) – system to connect exchanges If complicated supply chain, probably need to interact, build-systems to deal with multiple exchanges.

19. Electronic Commerce Terms • EC defined from these perspectives • Communications • E-delivery: Goods, services, information, payments

20. Electronic Commerce Terms • EC defined from these perspectives • Communications • E-delivery: Goods, services, information, payments • Business process • Automate business transactions and workflow

21. Electronic Commerce Terms • EC defined from these perspectives • Communications • E-delivery: Goods, services, information, payments • Business process • Automate business transactions and workflow • Service • Cut service costs, improve quality and speed

22. Electronic Commerce Terms • EC defined from these perspectives • Communications • E-delivery: Goods, services, information, payments • Business process • Automate business transactions and workflow • Service • Cut service costs, improve quality and speed • Online • Buying, selling and other services on internet

23. Electronic Commerce Terms • EC defined from these perspectives • Communications • E-delivery: Goods, services, information, payments • Business process • Automate business transactions and workflow • Service • Cut service costs, improve quality and speed • Online • Buying, selling and other services on internet • Collaborations • Inter- and intraorganisational

24. Electronic Commerce Terms • EC defined from these perspectives • Communications • E-delivery: Goods, services, information, payments • Business process • Automate business transactions and workflow • Service • Cut service costs, improve quality and speed • Online • Buying, selling and other services on internet • Collaborations • Inter- and intraorganisational • Community • Gather to learn, transact, communicate

25. Variations • Pure vs. Partial EC: based on the degree of digitisation of

26. Variations • Pure vs. Partial EC: based on the degree of digitisation of • Product

27. Variations • Pure vs. Partial EC: based on the degree of digitisation of • Product • Process

28. Variations • Pure vs. Partial EC: based on the degree of digitisation of • Product • Process • Delivery agent

29. Variations • Pure vs. Partial EC: based on the degree of digitisation of • Product • Process • Delivery agent • Traditional commerce: all dimensions are physical

30. Variations • Pure vs. Partial EC: based on the degree of digitisation of • Product • Process • Delivery agent • Traditional commerce: all dimensions are physical • Pure EC: all dimensions are digital

31. Variations • Pure vs. Partial EC: based on the degree of digitisation of • Product • Process • Delivery agent • Traditional commerce: all dimensions are physical • Pure EC: all dimensions are digital • Partial EC: all other possibilities include a mix of digital and physical dimensions

32. Variations (2) • Internet vs. Non-Internet EC • VANs – value added network (hosted service that acts as intermediary between businees partners) • LANs – local area network • Vending Machine • Click and Mortar

33. Dimensions of E-Commerce Prentice Hall, 2002

34. Business Models A method of doing business by which a company can generate revenue to sustain itself.

35. Business Models A method of doing business by which a company can generate revenue to sustain itself. • Name your price – priceline.com

36. Business Models A method of doing business by which a company can generate revenue to sustain itself. • Name your price – priceline.com • Find the best price – hotwire.com

37. Business Models A method of doing business by which a company can generate revenue to sustain itself. • Name your price – priceline.com • Find the best price – hotwire.com • Dynamic brokering – getthere.com

38. Business Models A method of doing business by which a company can generate revenue to sustain itself. • Name your price – priceline.com • Find the best price – hotwire.com • Dynamic brokering – getthere.com • Affiliate marketing – amazon.com

39. Business Models A method of doing business by which a company can generate revenue to sustain itself. • Name your price – priceline.com • Find the best price – hotwire.com • Dynamic brokering – getthere.com • Affiliate marketing – amazon.com • Electronic tendering systems – gxs.com

40. Business Models A method of doing business by which a company can generate revenue to sustain itself. • Name your price – priceline.com • Find the best price – hotwire.com • Dynamic brokering – getthere.com • Affiliate marketing – amazon.com • Electronic tendering systems – gxs.com • Online auctions – ebay.com

41. Business Models A method of doing business by which a company can generate revenue to sustain itself. • Name your price – priceline.com • Find the best price – hotwire.com • Dynamic brokering – getthere.com • Affiliate marketing – amazon.com • Electronic tendering systems – gxs.com • Online auctions – ebay.com • Customization and personalization – dell.com

42. Business Models A method of doing business by which a company can generate revenue to sustain itself. • Name your price – priceline.com • Find the best price – hotwire.com • Dynamic brokering – getthere.com • Affiliate marketing – amazon.com • Electronic tendering systems – gxs.com • Online auctions – ebay.com • Customization and personalization – dell.com • Electronic marketplaces and exchanges – e-steel.com

43. Business Models A method of doing business by which a company can generate revenue to sustain itself. • Name your price – priceline.com • Find the best price – hotwire.com • Dynamic brokering – getthere.com • Affiliate marketing – amazon.com • Electronic tendering systems – gxs.com • Online auctions – ebay.com • Customization and personalization – dell.com • Electronic marketplaces and exchanges – e-steel.com • Supply chain improvers – productbank.com.au

44. Business Models A method of doing business by which a company can generate revenue to sustain itself. • Name your price – priceline.com • Find the best price – hotwire.com • Dynamic brokering – getthere.com • Affiliate marketing – amazon.com • Electronic tendering systems – gxs.com • Online auctions – ebay.com • Customization and personalization – dell.com • Electronic marketplaces and exchanges – e-steel.com • Supply chain improvers • Collaborative commerce Where is the company positioned in the value chain?

45. Rappa’s Business Models http://www.digitalenterprise.org/models/models.html

46. Rappa’s Business Models http://www.digitalenterprise.org/models/models.html • Brokerage – exchange, trading community, aggregator

47. Rappa’s Business Models http://www.digitalenterprise.org/models/models.html • Brokerage – exchange, trading community, aggregator • Advertising – portals, sponsorship banners

48. Rappa’s Business Models http://www.digitalenterprise.org/models/models.html • Brokerage – exchange, trading community, aggregator • Advertising – portals, sponsorship banners • Infomediary • Recommender - users provide recommendations on products, e.g. http://www.epinions.com • Registration - session tracking of users, allows greater targeting of advertising, e.g. http://www.nytimes.com

49. Rappa’s Business Models http://www.digitalenterprise.org/models/models.html • Brokerage – exchange, trading community, aggregator • Advertising – portals, sponsorship banners • Infomediary • Recommender - users provide recommendations on products, e.g. http://www.epinions.com • Registration - session tracking of users, allows greater targeting of advertising, e.g. http://www.nytimes.com • Merchant - retail

50. Rappa’s Business Models http://www.digitalenterprise.org/models/models.html • Brokerage – exchange, trading community, aggregator • Advertising – portals, sponsorship banners • Infomediary • Recommender - users provide recommendations on products, e.g. http://www.epinions.com • Registration - session tracking of users, allows greater targeting of advertising, e.g. http://www.nytimes.com • Merchant - retail • Manufacturer – eliminate middleman