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Electronic Commerce Defined

 E-Commerce – online exchange of

goods, services, and money between
firms, and between firms and their
customers
 More than just buying and selling:
 Pre-sale events and marketing
 After-sale customer service

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Electronic Commerce Defined

 E-Commerce
 Business-to-Consumer (B2C)
 Business-to-Business (B2B)

 Business-to-Employee (B2E)

 Consumer-to-Consumer (C2C)

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Electronic Commerce Defined

 Internet and World Wide Web

Capabilities
 Expanding market
 Wider customer base

 More products

 Closer relationships with customers

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Electronic Commerce Defined

 Internet and World Wide Web

Capabilities
 Real-time access to information
 Web site linked to corporate database
 Example: Alaska Air
 Mass customization
 Tailoring products to a customers needs
 Example: Lands’ End
 Interactive communication
 Improving firm’s image through responsiveness
 Example: E*Trade

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Electronic Commerce Defined

 Internetand World Wide Web

Capabilities
 Collaboration
 Reduced transaction costs
 Enhanced operational efficiency
 Disintermediation
 Cutting out the “middleman”
 Reaching customers directly

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Electronic Commerce Defined

 Electronic Commerce Business

Strategies
 Brick-and-mortar
 Traditional, physical companies
 Click-only (“virtual”) companies
 Online only
 Example: eBay
 Click-and-mortar (or “Brick & Click”)
 Both physical and virtual
 Challenge: increased IS complexity

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Business-to-Business Electronic
Commerce
 Electronic Data Interchange
 Definition – EDI refers to the transmission of business
documents between organizations via networks
 Estimated $500 billion worth of goods per year
 EDI: usually over value-added networks (VANs)

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Business-to-Business Electronic
Commerce
 Electronic Data Interchange
 Advantages
 Wide variety of business documents
 Reduced document handling
 Shortens time of business transaction
 Reduces errors

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Business-to-Business Electronic
Commerce
 Electronic Data Interchange
 Disadvantages
 Costly to implement
 Costly to maintain
 Requires skilled technicians
 Often too costly for small or medium-sized companies

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Business-to-Business Electronic
Commerce
 The Internet Changed Everything
 B2B now available to companies of all sizes
 Intranet – internal, private network using Web
technologies to facilitate transmission of proprietary
information within the organization
 Extranet – two or more firms using the Internet to
do business together

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Business-to-Business Electronic
Commerce
 Intranet System Architecture
 Firewalls – hardware devices with special software
that prevent unauthorized access
 An intranet server is placed behind the firewall
 Packets are never routed outside the firewall, but
remain within the organizations network

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Business-to-Business Electronic
Commerce

 Intranet Applications

 Training
 Online Entry of Information
 Real-Time Access to Information
 Collaboration

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Business-to-Business Electronic
Commerce
 Extranet System Architecture

 Extranet
 Connects two or more business partners
 Like an intranet
 Same software, hardware, and networking

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Business-to-Business Electronic
Commerce
 Extranet Applications
 Supply Chain Management
 Example: Dell Computers
 Real-Time Access to Information
 Example: CSX railroad
 Collaboration
 Example: Caterpillar

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Business-to-Consumer Electronic
Commerce
 B2C
 Internet – fastest acceptance of any
communications technology
 Retail transactions between a company and
end consumers
 Electronic retailing (e-tailing)

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 Business-to-Consumer Electronic
Commerce

 Stages of B2C E-Commerce

 E-Information
 Disseminate information globally
 Example: Ferrari
 E-Integration
 Consumer-driven access to information
 Example: Allstate and Burlington Northern Santa Fe
 E-Transaction
 Interactive communication and transaction support
 Example: eBay and Priceline.com

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