Chapter 1 Introduction to e-Business

1. Chapter 1Introduction to e-Business

2. Learning objectives • Define e-commerce and e-business and understand the relationships of e-commerce and e-business to the existing IT resource in an organisation • Understand some fundamental concepts surrounding e-commerce and e-business ICT326 2005

3. Learning objectives • Appreciate the extent and diffusion of e-commerce • Discuss business uses of the Internet, and appreciate the costs and benefits for an organisation of adopting e-commerce and e-business • Understand the determinants of success for e-commerce and e-business ICT326 2005

4. Defining e-commerce and e-business • Commerce • Some transaction, an exchange of goods & services for money, or other goods & services • Does e-Commerce therefore imply commerce taking place electronically? • If yes, then payment by telephone, credit card, EFTPOS all represent e-Commerce ICT326 2005

5. Defining e-commerce and e-business • Does e-Commerce require completion of transaction electronically? • If yes, then Internet advertising, information provision, internet-based after-sales support & service are NOT examples of e-Commerce • Is e-Business different to e-Commerce? ICT326 2005

6. Defining e-commerce and e-business • Buying & selling over the internet • Online ordering, payment • + Activities that support revenue generation • Generating demand for goods/services by marketing & advertising activities • Sales support, customer service • Facilitating communication, information exchanges, collaboration ICT326 2005

7. Defining e-commerce and e-business • Deployment of Internet-based technologies & other ‘traditional’ IT to support commerce or the organisation’s core business, and to improve business performance • This can be achieved through increased connectivity, & via Intranets, Extranets, the Internet & EDI-based interorganisational systems ICT326 2005

8. Defining e-commerce and e-business • Aim to • Improve efficiencies internally • Improve efficiencies & effectiveness along supply chain • Create value for customers ICT326 2005

9. Defining e-commerce and e-business • An e-Business is one that • Creatively & intelligently utilises & exploits the capabilities of modern IT and Internet technologies to create efficiencies, achieve effectiveness gains, and exploit strategic opportunities ICT326 2005

10. E-business: new phenomenon or natural progression? Recent history… The hype of the dotcom era followed by Gloom & pessimism with respect to e-Commerce ICT326 2005

11. E-business: new phenomenon or natural progression? • Looking ahead… • terms e-Commerce and e-Business will merge into “broader” meaning • Will we eventually drop the ‘e’? • Do we still talk about telephone-enabled business? Fax–enabled business? • divisions between “traditional” & “on-line” businesses will fade/are fading • thinking of e-Commerce and e-Business primarily in terms of dot.coms or “pure play” Internet start-ups not all that helpful ICT326 2005

12. E-business: new phenomenon or natural progression? • As e-business matures.. • With maturity, question for all existing organisations & new businesses will be: • In what ways can Internet technologies be employed to improve our business performance? • efficiencies? • effectiveness? • flexibility, competitiveness? • Can our business (established or new) effectively harness the potentialities of the Internet & associated technologies to help us achieve our business goals? ICT326 2005

13. E-business: new phenomenon or natural progression? • It’s now 2010… • Are we still shopping in stores, shopping centres? • Do sales staff still call on customers? • Are we still flying interstate and internationally for business purposes? • Are we collaborating more electronically? • Have intermediaries (like travel agents, insurance brokers, real estate agents) disappeared? What will be remembered in history? 1960s, for advent of IT into business, or 1990s, for advent of Internet? ICT326 2005

14. E-business: new phenomenon or natural progression? • Key changes in contemporary business environments • Business environment now highly interconnected via computer networks, especially the Internet • Electronic linkages to players all along the supply chain allow the achievement of substantial efficiencies & better service ICT326 2005

15. E-business: new phenomenon or natural progression? • Key changes in contemporary business environments (cont.) • Direct access to customers & end consumers provides opportunities for goods & services to be better targeted towards specific consumer needs, & for information regarding customer preferences to be fed back into internal decision making about production, product & service design & development • Internal efficiencies can be achieved through the provision of more timely information & streamlined business processes ICT326 2005

16. Perspectives on e-commerce and e-business • Some key concepts: • B2C (B-C, B to C, b-c, etc) • B2B Obvious, or not? ICT326 2005

17. Perspectives on e-commerce and e-business ICT326 2005 Which of the relationships represent B2B and which represent B2C?

18. Perspectives on e-commerce and e-business ICT326 2005

19. Perspectives on e-commerce and e-business • Organisational types & e-Commerce • Bricks and mortar • A traditional organisation, presenting to its customers through its factories, warehouses, retail outlets & sales force • Little adoption of e-Commerce ICT326 2005

20. Perspectives on e-commerce and e-business • Organisational types & e-Commerce (cont.) • Pure dot com (Internet pure play) • Presents to customers via web pages • Interactions accomplished over the Internet • Bricks and clicks (clicks and mortar) • Organisations that have both a traditional presence and web pages to support the completion of transactions ICT326 2005

21. Perspectives on e-commerce and e-business ICT326 2005

22. Business uses of the Internet • As organisations become more mature, potential benefits of e-Commerce increase • BUT so do the risks & costs associated with e-Commerce ICT326 2005

23. Business uses of the Internet • Businesses use Internet for the following: • Direct dialogue with customers, suppliers, interactive marketing & CRM • Commercial transactions • Communication & collaboration • Formation of strategic business alliances • Management of procurement & supply chain activities • Operational efficiencies ICT326 2005

24. Potential costs and benefits of e-commerce • Costs associated with moving toe-commerce • Computer hardware & software • Telecommunications hardware & software • Development and/or acquisition of systems • Systems integration • Use of consultants • Additional personnel (specialised IT staff, web designers, network specialists) • Training (both IT staff and general business staff) ICT326 2005

25. Potential costs and benefits of e-commerce • Costs associated with moving toe-commerce (cont.) • Security • On-going technical support • Operating costs & maintenance • Process re-engineering costs • Enhancement of business strategy & development of e-Business vision & strategy • Change management ICT326 2005

26. Determinants of e-commerce and e-business success • Profitability & viability • All e-Businesses must ultimately make a profit • Profitability is not certainty • Must understand e-Business models • Identify sources of costs & revenues, & risks associated with move to e-Business • Understand sources of value from customers’ perspective • Establish appropriate performance measures ICT326 2005

27. Determinants of e-commerce and e-business success • Planning • Sound planning is vital to successful e-Business ventures • Planning now resembles day-by-day strategic thinking & acting, not a bureaucratic process • Requires clear vision for organisation • Requires strategy for achievement of vision, along with organisational goals & objectives • Requires alignment between business strategy and all functional strategies, especially IS/IT ICT326 2005

28. Determinants of e-commerce and e-business success • Re-engineering of processes • Opportunity to become customer-centric organisation • Core business processes are likely to change • Must seek opportunities to re-engineer core business processes • Internet technologies providing opportunities to streamline internal operations, & build flexibility & responsiveness in relationships with business partners & customers ICT326 2005

29. Determinants of e-commerce and e-business success • Management of knowledge resources • Knowledge about customers, suppliers, business processes, technologies & ‘know-how’ now regarded as a corporate resource, & possible source of competitive advantage • Managing & exploiting this knowledge resource therefore vital to long-term success ICT326 2005

30. Determinants of e-commerce and e-business success • Developing & sourcing capabilities • Need to combine strengths associated with large enterprises (efficiency, power, resources) with those of small enterprises (speed, agility, responsiveness) • Careful decisions needed about where to source required knowledge, skills, capabilities • Trend to move towards flexible arrangements in accessing required resources • Some will be provided and required internally (insourced) while others will be provided by external providers (outsourced) ICT326 2005

31. Determinants of e-commerce and e-business success • Proactive uptake of technologies • Success is contingent on appropriate exploitation of technologies • Innovation and change regarded as opportunity, not threat • Adoption of technological innovation provides opportunity to enhance customer service, achieve efficiencies in operations, and the like ICT326 2005

32. Determinants of e-commerce and e-business success • E-Business Governance • Processes must be in place to ensure that business value derived from investments in IT & Internet • IT must support achievement of corporate goals & objectives, while not exposing organisation to undue risk • IT investments need to be aligned with priorities of organisation • Decision making & accountabilities deliberately designed to ensure risk is managed and positive outcomes achieved ICT326 2005