Electronic Commerce and the Virtual Enterprise

1. Electronic Commerce and the Virtual Enterprise Session 1: Defining Electronic Commerce and The Network Economy

2. Electronic Commerce “Electronic Commerce has generated over $1.2 billion in wealth in the past 18 months” -Al Gore How is this possible?

3. Electronic Commerce According to a recent survey, 66% felt the computer was the most significant invention of the 20th century. The airplane was 2nd at 18% Also, more people believe that Bill Gates (45%) has a greater impact on their day-to-day lives than Bill Clinton (44%) www.upi.com/corp/news/980430

4. Electronic Commerce Volchok Computing did a recent study -only 23% of senior execs at Fortune 1000 companies could explain the purpose of a modem while 93% of 6th graders got it right -98% of the 6th graders knew the Internet was not owned by anyone, 68% of the execs thought some corporation ran it -23% of the execs thought the Internet was part of Microsoft

5. Electronic Commerce Increasingly value is found not in tangible assets such as products but in intangible assets such as branding, customer relationship, supplier integration and the aggregation of key information assets. -Kalakota

6. Growth 1998-1999 Number of web users world-wide increased by 55% Number of hosts rose by 46% Number of web servers increased by 128% Number of new web address registrations rose by 137% www.ecommerce.gov/ede/chapter1.html

7. Growth Dell’s online sales more than doubled in 1998 to $14 million per day. Last quarter sales were $18 m/day 1st quarter 1999 Travelocity’s sales grew to $128 m - 156% increase over same period a year earlier Quicken mortgage arranged $400m in loans in 1Q99 versus $600 m for all of 1998 www.ecommerce.gov/ede/chapter1.html

8. Growth In early 1998 forecasters were suggesting that business-to-business e-commerce might rise to $300 billion by 2002. Most now consider that estimate to be too low. Forrester suggests b-b will reach $1.3 trillion by 2003 EVERY estimate of e-commerce volume and growth has been LOW www.ecommerce.gov/ede/chapter1.html

9. So what is Electronic Commerce?

10. So What is Electronic Commerce? -Hollywood SX www.hsx.com -Satellite www.terraserver.com -Voice Recognition 888-573-8255 Jupiter -Translations www.altavista.com -Bus Call www.buscall.com -Online cameras events.exploratorium.edu/CAM1/index.html -PoliceScanner www.policescanner.com -LA Traffic traffic.maxwell.com/la/ -Ebay www.ebay.com

11. So What is Electronic Commerce? Is it technology? Is it a process? Is is a methodology?

12. So What is Electronic Commerce? TECHNOLOGIES (TOOLS) METHODOLOGIES (PROCESSES) that enable ELECTRONIC FUNDS TRANSFER ELECTRONIC DATA INTERCHANGE ELECTRONIC BULLETIN BOARDS ELECTRONIC CATALOGS E-MAIL BAR CODING INTERNET / WWW CONTINUOUS ACQUISITION AND LIFE-CYCLE SUPPORT JUST IN TIME VENDOR MANAGED INVENTORIES

13. Elements of EC Defined Communications: the delivery of information, products services, or payments via telephone lines, computer networks, or any other means Business Process: the application of technology toward the automation of business transactions and workflows

14. Elements of EC Defined Service: a tool that addresses the desire of firms, consumers, and management to cut service costs while improving the quality of goods and increasing the speed of service delivery Online: provides the capability of buying and selling products and information on the Internet and other online services

15. EC Defined Key Elements of our definitions: -EC is NOT just technology -Technology applied to a business problem so that information is captured and exchanged in digital or electronic formats.

16. Electronic Commerce Technology is certainly integral to any definition of EC “Good Technology that is accepted by both business and society as a whole stands an excellent change of changing the rules” -Jeff Harrow, Compaq

17. EC versus IS/IT How is Electronic Commerce different from the Information Systems function in an enterprise? “EC endeavors to improve the execution of business transactions over various networks” - Kalakota & Whinston Information Systems manage information as a resource

18. E-commerce vs E-business?

19. E-commerce vs E-busines E-commerce concerns itself with the transaction E-business is everything before and after the sale Let’s look at a model for E-business

20. Stakeholders Employees A Model for E-business Internal Business Partners Supply Chain Mgt Enterprise Resource Planning External Knowledge Applications Enterprise App Integration Management Control Administration Control Customer Relationship Mgt Selling Chain Mgt Customers, Resellers

21. A Framework for Electronic Commerce This is my Model for this course Let’s talk through each component

22. Virtual Corporations • An organization that extends its influence beyond the • boundaries of time, distance, and physical facilities. • May be temporary in nature, designed to perform a • given task or permanent as long as the business • need exists Some examples?

23. The Network Economy As the virtual corporation emerges we begin to think of moving towards an economy based on the Network. What does that mean??? Some argue that the very nature of the firm will change - do we need to organize resources in the same way that we have?

24. The Network Economy The digital revolution gets all the headlines these days. But turning slowly beneath the fast-forward turbulence, steadily driving the gyrating cycles of cool technogadgets and gotta-haves, is a much more profound revolution - the Network Economy -Kevin Kelly, New Rules for the Networked Economy

25. The Network Economy What’s the value of a single Fax machine? As the number of nodes in a network increases arithmetically, the value of the network increases exponentially. Adding a few more members can dramatically increase value. Value is derived from plentitude - not scarcity!

26. The Network Economy The fate of individual corporations is not dependent on their own merits but also on the fate of their neighbors, their allies, their competitors... Networks churn - sustainable dis-equilibrium - quote from Kelly

27. The Network Economy Donald Hicks of UT studied the half-life of Texas businesses for the past 22 years -Their longevity has dropped by 1/2 since 1970 -Number of jobs growing faster than ever -Wages at highest point and growing “the vast majority of the employers on which Texans will depend in the year 2026 - or even 2006 - do not yet exist”

28. The Network Economy What are the implications for us? Change is constant Planning horizons shorten Education is continuous Spiral Development Others?

29. The Internet What was total e-commerce in 1990? What triggered the growth? Why?

30. The Internet Email TCP/IP EDI Internet E-Mall HTML HTTP Catalogs Browsers We will discuss many technologies but the Internet will be central to all

31. The Internet Jack Welch - The Internet is priority 1, 2, 3, and 4 for GE Clearly the Internet has emerged as a viable business platform WHY? Payment Systems Global access Security Information Exchange Marketplace

32. Emerging Internet Models Business-Consumer Business-Business Product Based www.amazon.com www.mercata.com www.officemax.com www.boeing.com Physical www.Estamps.com www.hallmark.com www.wsj.com www.photodisc.com Digital Service Based www.peapod.com www.etrade.com www.fedex.com www.expedia.com Traditional www.roboshopper.com www.ebates.com www.netseminar.com www.yesmail.com Digital

33. Assignment for Next Week For now the web page is: acasun.eckerd.edu/~duffja 1. Complete the matrix from the previous page 2. Read the Whitehouse position paper on ecommerce www.whitehouse.gov/WH/New/Commerce/read.html 3. Read New Rules for the Digital Economy www.wired.com/wired/archive/5.09/newrules_pr.html 4. Macro-Effects of E-commerce www.mhhe.com/business/mis/zwass/ecpaper.html 5. Send me an email - duffj@ctc.com 6. Read 1 & 2 in the text when available