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BMKT 315 Introduction to e-Business

BMKT 315 Introduction to e-Business. Part I -- How did we get here?. Introduction to e-Business. What is e-business?. Any business carried out in electronic form Connecting electronically to your business stakeholders. What is e-business?.

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BMKT 315 Introduction to e-Business

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  1. BMKT 315 Introduction to e-Business

  2. Part I -- How did we get here? Introduction to e-Business

  3. What is e-business? • Any business carried out in electronic form • Connecting electronically to your business stakeholders

  4. What is e-business? • E-business is the strategic use of technology, particularly the Internet, to integrate and streamline the business processes, enterprise applications, and organizational structure of a business and create a high performance business model • Term will probably become redundant within 10 years as all businesses will be “e-businesses”

  5. Evolution of e-business

  6. Evolution of e-business

  7. “If you’re not an e-business by 2000, you won’t be in business by the year 2001” – Technology Sales Pitch, 1999

  8. In many ways fear of being left behind sparked the “.com gold rush”

  9. “If you’re an e-business in 2001, you’re lucky to be alive!” – Technology Sales Pitch, 2001

  10. “… For a small fee, we’ll show you how to truly leverage the technology we hyped up and sold to you in 1998.” – Technology Sales Pitch, 2001

  11. Why did the Internet market crash?

  12. Main reasons for “.com” crash • Not enough customers comfortable using the Internet… this meant companies had to spend a disproportionately high percentage of their budgets on marketing (e.g. 40-50% instead of usual 5% for traditional business) • Information technology costs very high… many people incorrectly assumed setting up e-commerce sites would be cheap (e.g. virtual inventory, virtual office) • This combination was a killer for many businesses (not enough customers and revenues and huge infrastructure costs)

  13. How can you separate the hype from reality?!

  14. People usually overestimate the short term of impact and underestimate the long term impact of technology • E-Business has really just started…

  15. Evolution of e-business

  16. What’s different than “.com” times • Customers now comfortable using the Internet… e.g. 70-80% Internet penetration rate in North America… companies can spend less on marketing • Information technology costs have decreased… instead of using EDI, people are using VPN (virtual private networks). • While revenues are still challenging to acquire, it’s a lot better than .com times & companies have fine-tuned their models • Google has figured out how to earn revenues from advertising… • Companies that had difficulty with profits such as PayPal have since been acquired by players like eBay with solid revenues • Signs that the “times are a changing” can be seen with these examples from the music industry • Madonna’s new contract shows importance of Web-based channels • Radiohead challenges traditional distribution approaches

  17. Send/Rcv. Proprietary Format Document EDI Document EDI Encode /Decode EDI Encode /Decode Proprietary Format Document EDI Document Send/Rcv. EDI Process Proprietary Format document Proprietary Format Document EDI document Document Buyer VAN Proprietary Format Document EDI document Vendor

  18. Unique attributes of e-business • Speed... e.g. crackberry addicts • Convenience... e.g. FedEx offloading CSR costs... and consumers happy to accept • Customization... e.g. build your own PC at Dell • Redefinitionofproductvalue... e.g. Google docs...free Web-based software supported by ads • Mediaflexibility... Madonna’s new deal

  19. E-business benefits • #1 driver is cost reduction • Increasing sales • Improving customer service • Minimizing competitive pressures • Expanding market reach • Addressing user concerns

  20. Integrated systems • Info systems that are joined together in such a way that they can easily share data between them • In past, integration was a key part of e-business development costs (connecting system A to B could cost 4x more than the actual systems cost) • Increased trend towards open standards (e.g. XML-based data transfer such as via RSS... Real Simple Syndication)... Integration costs declining • Still really difficult to connect large scale enterprise systems

  21. E-commerce vs. E-business • Transaction • “Cash register” • Smaller scale • Your individual projects focuses on e-commerce although there are small scale components of e-business (e.g. Integration with third party websites) • Encompassed much wider space than e-commerce • All electronic connections between business stakeholders • Websites • Intranets • Extranets • ERP Systems • Driven mainly by cost-savings • Your team project focuses on e-business

  22. Front Office (interfacing with customers)

  23. Back Office (behind the scenes)

  24. Key Terms -- Introduction to e-Business • Electronic data interchange (EDI) • Intranet • Extranet • Integrated systems • Systems integration • Trading exchange • E-business • E-business models • Front-end and back-end of e-business • B2C • B2B • B2G

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