E-Commerce

1. E-Commerce Jason C.H. Chen, Ph.D. School of Business Administration Gonzaga University, Washington, U.S.A. Senior Consultant, Taskco.com chen@gonzaga.edu Nov. 20, 2000

2. Topics • E-Commerce:From B2C to B2B and Beyond • e-Bid Process • Features of a B2B application. • Business plan for an e-Marketplace (next year) • e-CRM and 1-1 Marketing (next year)

3. E-Commerce:From B2C to B2B and Beyond Jason C.H. Chen, Ph.D. School of Business Administration Gonzaga University, Washington, U.S.A. Senior Consultant, Taskco.com chen@gonzaga.edu Nov. 22, 2000

4. Outline of Topics • EC, B2C and B2B and their models. • How big is B2B? • Where is the Evidence? • What are the revenue models in B2B? • What is driving adoption of B2B? • Why now? • TASKCo.com

5. eBusiness Key Concepts • eBusiness • The strategy of how to automate old business models with the aid of technology to maximize customer value • eCommerce • The process of buying and selling over digital media • eCRM (eCustomer Relationship Management) • The process of building, sustaining, and improving eBusiness relationships with existing and potential customers through digital media

6. What is E-Commerce ? • Electronic commerce (EC) is an emerging concept that describes the buying and selling of products, services and information via computer networks, including the Internet.

7. Figure: E-commerce on the rise. Source: 1999 SG Cowen/Datamation Networked Computing Survey Figure: E-commerce apps are a big driver for storage. Average installed online storage in gigabytes. Source: 1999 SG Cowen/Datamation Networked Computing Survey No plans Start in 99/00 Expand in 99/00 Largely done

8. New Improved Enabled Reduced Improved Benefit channel for customer entire new operating cycle time existing service line of costs business business % of 25% 23% 18% 7% 5% Respondents Keep pace Reduced cost Other Not None Benefit with of sales available technology % of 5% 4% 6% 4% 3% Respondents Table: E-commerce’s most promising potential benefits

9. WHAT HOW eBusiness Processes WHY Customer Relationship Redesign Business Processes (Outside-In) Applying Technology

10. WHAT HOW eBusiness Processes WHY Customer Relationship Redesign Business Processes (Outside-In) Applying Technology

11. Traditional versus E-Business Models? C C B B C: Individual Consumer B: Business

12. What is B2C? • B2C (or Extranets) is just web-enabled relationships between existing partners; they tend to be run by a single company seeking to lower the cost of doing business with its current suppliers or individual customers. • Examples? • Amazon.com • Egghead.com

13. Intranet Figure: A B2C e-business Model Enterprise User Profiles Workflow Business rules Payment Analytics Internet Firewall

14. B2C Applications • Electronic storefront • Electronic malls • Advertising online • Service online • selling books, toys, computers • e-banking (cyberbanking) • online stock trading • online job market, travel, real estate

15. Figure : B2C and B2B Internet Commerce in the U.S. (Source: Forrester Research) Billion

16. “B2B” is business-to- business commerce conducted over the Internet (called B2B e-commerce space, or e-marketplaces) What is B2B? N

17. B2B e-Markepplaces:A CEO’s Perspective “The next chapter in the e-business revolution involves the transformation of entire markets and the redefinition of industries. We will see the rise of a new class of entities -- e-Marketplaces -- that will help online buyers and sellers find each other, attack the inefficiencies of traditional markets, and carve out for themselves important roles in the e-business economy.” Louis V. Gerstner Jr. Chairman of the Board and CEO IBM Corporation

18. e-market is Web sites where buyers and sellers come together to communicate, exchange ideas, advertise, bid in auctions, conduct transactions, and coordinate inventory and fulfillment Sellers Buyers E-Market is …Web-based marketplace MarketSite

19. Figure : A B2B Model(Source: Goldman Sachs Investment Research Report) Invoices, Payment , Clearing Banks, Financial InstitutionseCredit.com Enterprise Suppliers Customers • Production materials • Operating goods, services Logistics Celarix, NTE Transportation, Warehousing

20. Focus on e-Business Applications Knowledge Management/Business Intelligence E-Commerce E-Customer Relationship Procurement Network Trading Network E-Channel Management Businesses & Consumers (CRM) Businesses (PRM) M:1 M:N 1:N E-Portal Management E-Business, E-Services SCM/ERP/Legacy Appls

21. B2B Applications • Advertising • Auctioning • Procurement • Channel management • E-commerce

22. How Big is B2B? Figure: The Goldman Sachs B2B Sizing in USA

23. Where is the Evidence • Three highlights from the Goldman Sachs B2B survey 1.0: • E-Commerce spending on proprietary Web site, e-market, and procurement (75% say, in 2000) • Business are increasingly likely to develop B2B e-markets and to favor online auctions (74% say, in 2000) • Outsourcing e-commerce spending is commonplace among businesses (25% say, up to 75% of e-C spending)

24. B2B Revenue Model • B2B companies exhibit varying business models, depending on the key products and services they offer. The models include: • transaction fees, • auction-driving commissions, • advertising, • content subscriptions, • software licensing

25. B2C vs. B2B Source: Goldman Sachs Investmenet Research

26. The Magnificent Seven B2B Drivers • Increasing competition and globalization • Growing interactivity • Financial opportunity • Efficiencies and cost savings • Enhanced market and customer reach • Real-time needs • Regulatory and taxation issues N

27. Small Business Likely to Fuel B2B • Small businesses will fuel the B2B market • the use of and dependence on the Internet by small businesses as a medium for marketing, distribution, and commerce will likely fuel the B2B market. • as more small business access the Internet and set up corporate Web pages, the more they will employ the Internet to execute their business strategy.

28. Benefits of B2B • B2B solutions create competitive dynamics through: • cost savings • the composition of cost (product versus process costs) • the number of intermediaries in the supply chain. • new financial (revenue) opportunities • the rate of industry-wide B2B adoption • business model N

29. Why Now? • B2B catalysts are now arising to stimulate adoption (mentioned earlier). • Interactive networks have recently become ubiquitous and inexpensive, accelerating the use of B2B applications. • A viral effect will spur copycat behavior throughout the market as more companies continue to implement B2B applications.

30. Which Industries are Likely to Embrace B2B Solutions • Industries that are B2B inclined exhibit certain key characteristics: • the supply chain is highly diffuse, • techno-innovators dominate the culture, • process represents more than 20% of total costs, • products exhibit complex configurations, • expense pressure is intense.

31. Research show that leading industries migrating online and adopting B2B solutions include the following: • Aerospace/Defense: 35% • Electronics: 25% • Chemicals: 20% • Motor vehicles and parts: 18% • Medical equipment and transport: 17%

32. What Makes a B2B e-market Company Succeed? • Five Critical Success Factors for e-markets: • Business model, • market size, • industry expertise, • branding and distribution, • management execution hustle (not just the formulation of strategy) N

33. Solutions for e-Enterprise Organizations • Streamlines buying and selling between trading partners • Maximizes trade efficiency across the entire supply chain • Strategic e-commerce capabilities in Internet time • Delivers compelling ROI Sellers MarketSite Buyers

34. Solutions for Internet Market Makers • Turn your supply chain into a revenue generation opportunity • Leverage your industry domain expertise into strategic e-commerce solutions • Brings e-commerce to businesses of any size, across all industries Your Portal

35. Global Solution for Businesses: The Global Trading Web Global Trading Web Connect once to trade with anyone,anytime, anywhere in the world.

36. European e-markets • B2C e-commerce in Europe is likely to remain approximately two to three years behind the U.S. . • B2B in Europe currently lags the U.S. by two years. • How about in Asia?

37. TASKCo Mission Leveraging Internet to Help Customers to: Expand Markets Fundamental Business Drivers Have Not Changed Improve Efficiencies Retain Customers

38. Focus on e-Business Applications Knowledge Management/Business Intelligence E-Commerce E-Customer Relationship Procurement Network Trading Network E-Channel Management Businesses & Consumers Businesses M:1 M:N 1:N E-Portal Management E-Services SCM/ERP/Legacy Appls

39. Catalog ? Objectives This Market Place offers an integrated suite of capabilities that enables all modes of access, reduce buyer’s total cost of ownership and seller’s marketing costs, eventually increase revenue for both parties. ePayment — Suppliers — — Buyers — • Financing and Credit • Risk Mgmt. • Billing and Payment Processing • Payment Settlement (A/P and AR) • Financial Control Management eSuppliers eProcure eBuyer • 3rd Party Logistics • Order Mgmt. • Catalog Maintenance • On-Line ordering and tracking • eCustomer Service and Transaction Processing • Order Acknowledgement • Needs evaluation • Fact-based Negotiation • Procurement Policies & Procedures Mgmt. • Maintenance,Disposal, &Renewal • Catalog Production • Order Acceptance • Logistics • Financing eService • Reporting ofItem Level Detail • Trend Analysis • Budget Tracking • Usage/Demand Analysis and Forecasting • Asset Recognition and Tracking • Payment Info.(e.g., P-Card) B2B Marketplace

40. TASKCo.com Business Knowledge Management Services Textile.com Component Electronics PC Industry IPBank.com Travel.com Home Hardware.com Transportation.com MediNet.com Logistics.com Finance.com Customs.com TASKCo Trading Network Infrastructure and Operation

41. 企業間電子採購作業 賣方/供應商 企業電子商務市場 買方/經銷商 供應商 供應商作業平台 經銷商作業平台 經銷商 企業採購電子商務作業系統 •訂單管理 •財務管理 •交貨管理 •顧客管理 •電子型錄 •詢價管理 •快速下單 •帳戶管理 供應鏈 Supply Chain 電子採購作業系統 需求鏈 Demand Chain 物流 資訊流 金流

42. B2B e-Procurement Processes Seller/Supplier e-Marketplaces Buyer/Wholesale Supplier Trading Platform Buye/r Wholesale Buyer/Wholesale Trading Platform Supplier B2B e-Procurement Process System • Order mgt. • Finance mgt. • Shipping mgt. • Customer mgt. • e-catalogue • inquiry/ • negotiation • quick ordering • account mgt. 供應鏈 Supply Chain e-procurement process system 需求鏈 Demand Chain Material Flow Information Flow Money Flow

43. Repository (Shared) MARKETPLACE MARKETPLACE Operational Data Timely news (filtering) Document, Update Process Business Intelligence Lotus Notes 3 V.A. (one-stop) 1 4 e-portal Context Data Mining Tools (Pattern Analysis) Work Flow 2 Knowledge Management OLAP Tools (Decision Support) Category    easy access ASP KNOWLEDGE MANAGEMENT PROCESSS in the TASKCo Platform

44. Repository (Shared) MARKETPLACE MARKETPLACE Operational Data Timely news (filtering) Document, Update Process Business Intelligence Lotus Notes 3 V.A. (one-stop) 1 4 e-portal Context Data Mining Tools (Pattern Analysis) Work Flow 2 Knowledge Management OLAP Tools (Decision Support) Category    easy access ASP KNOWLEDGE MANAGEMENT PROCESSS in the TASKCo Platform

45. Conclusion So grab your board, take the challenge because…