What is e-business?

Agenda
E-business and e-commerce E-business concepts and dimensions Types of e-business Evolution of e-business Stakeholders and major players E-business framework

It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change
Charles Darwin

If youre not changing faster than your environment, you are falling behind
Jack Welsh, CEO of GE

A formula to remember

+
Business Idea

+
Innovative Software Platform

=
Professional What You Need Is Customization What You Get

E-Business

E-Business
5

E-Company
E-Company Backoffice Business Intelligence Tools Affiliate Programs Business events administration

E-Customers
Innovative CRM approach Personalized advertising Personalized promotion Personalized Business Offer

E-Business Core
Website Management Content Management Business integration Value-Added Services Management

E-Commerce
Personalized E-Store Interactive Service Desk Online Inventory Orders Management Shipments Management Online Payments

E-Community
Community Management Personal Space of Your Customer Advanced Means of Communication (Chats, Forums, Blogs, Instant Messengers) Value-Added Services Customized online activities

E-business and E-commerce

Electronic business or e-business is the use of ICT to improve business (from the use of email to facilitate administrative procedures in buying and selling through the Internet). Electronic commerce or e-commerce is where business transactions take place via electronic communication networks, especially the Internet.

E-business vs. E-commerce

The main difference between them is that e-commerce defines interaction between organizations and their customers, clients, or constituents. On the other hand, e-business is broader term that also encompasses an organizations internal operations. Electronic commerce describes the buying and selling of products, services, and information via computer networks including the Internet, where e-Business describes the broadest definition of EC. It includes buying and selling of products and services, servicing customers, collaborating with business partners, and conducting other intra-business tasks.

E-business and e-commerce

Three alternative denitions of the relationship between e-business and e-commerce

E-Business concepts
E-business defined from the following perspectives: Communications: delivery of goods, services, information, or payments over computer networks or any other electronic means Commercial (trading): provides capability of buying and selling products, services, and information on the Internet and via other online services

E-Business concepts (cont.)

Business process: doing business electronically by completing business processes over electronic networks, thereby substituting information for physical business processes Service: a tool that addresses the desire of governments, firms, consumers, and management to cut service costs while improving the quality of customer service and increasing the speed of service delivery

10

E-Business concepts (cont.)

Learning: an enabler of online training and education in schools, universities, and other organizations, including businesses Collaborative: the framework for inter- and intraorganizational collaboration Community: provides a gathering place for community members to learn, transact, and collaborate

11

Dimensions of e-business/e-commerce

12

Source: Choi et al. (1997), p. 18.

Dimensions of e-business/e-commerce
Pure vs. Partial: based on the degree of digitization of: - Product - Process - Delivery agent Traditional commerce: all dimensions are physical Pure e-business: all dimensions are digital Partial e-business: all other possibilities include a mix of digital and physical dimensions

13

Types of e-business
Business-to-business (B2B)
Business that sells products or provides services to other businesses

14

Business-to-consumer (B2C)
Business that sells products or provides services to end-user consumers

Consumer-to-consumer (C2C)
Consumers sell directly to other consumers

Types of e-business (cont.)

Business-to-government (B2G)
Government buys or provides goods, services or information to/from businesses or individual citizens

15

Business-to-employee (B2E)
Information and services made available to employees online

Mobile commerce (m-commerce)

E-commerce transactions and activities conducted in a wireless environment

Collaborative commerce (c-commerce)

Individuals or groups communicate or collaborate online

Evolution of e-business
How it started

16

Electronic data interchange (EDI) - electronically transfer routine documents (application enlarged pool of participating companies to include manufacturers, retailers, services) 1970s: innovations like electronic funds transfer (EFT) - funds routed electronically from one organization to another (limited to large corporations) 1990s: the Internet commercialized and users flocked to participate in the form of dot-coms, or Internet start-ups

Traditional Purchasing Process Flow

17

Source: ariba.com, February 2001.

Evolution of e-business (cont.)

1997: Introduction of a brand new phrase e-business 1999: The emphasis of e-business shifted from B2C to B2B 2001: The emphasis shifted from B2B to B2E, e-commerce, egovernment, e-learning, and m-commerce 2004: Total online shopping and transactions in the United States between $3 to $7 trillion E-business will undoubtedly continue to shift and change

18

Levels of e-maturity

19

Innovate Business development Integrate Order processing Interact Order taking Informate Where do you Brochure-ware want to

Be and Go.

Evolution of e-business (cont.)

The Future
By 2008: Number of Internet users worldwide reached 750 million 50 percent of Internet users will shop E-business growth will come more from:
B2C, B2B, e-government, e-learning, B2E, e-commerce

20

Stakeholders
E-Business relationships are formed with the following types of stakeholders:
Internal stakeholders: Management and staff Suppliers and manufactures Customers Intermediaries Financial institutions Web service providers Associations Web communities Etc.

21

Major Players

22

Major business pressures

23

E-business framework
E-Business does not affect an organizations fundamental goals, rather it provides a new ways to achieve them:
E-business adoption strategy and direction Vision must be communicated to all stakeholders The interaction among stakeholders Smaller network, more flexible organizations, shifting priorities and roles

24

Information system and technology infrastructure Mechanism to improve, enrich, change, and deepen relationships with key stakeholders Culture Need to adapt the new way, will impact on rules, belief, norms, and behaviours

25

E-Commerce Styles

26

Figure 14.1
26

27

What is Architecture?
By definition: The architecture of a system describes its components, and the relationships.

E-Commerce Architecture (Cont.)

28

Figure 14.2
28

29

The components vary but usually include: Client PC connected to Internet through ISP with a web browser Vendor a merchant or intermediary who provides the catalogue Transaction system; shopping basket, etc Payment gateway

30

Architectural Framework for Electronic Commerce

1) Application services 2) Brokerage and Data services, Data or transaction management 3) Interface and Support Layers 4) Secure Messaging, Security, and Electronic Document Interchange 5) Middleware and Structured document interchange 6) Network infrastructure and basic communications services

31

32

6) Network Infrastructure
E-commerce framework is being built on the WWW architecture. Wireline - coaxial, fiber optic Wireless

33

5) Middleware Services
needed to solve all the interface, translation, transformation, and interpretation problems the ultimate mediator between diverse software programs that enables them talk to one another As computing is shifting from application centric to data centric, middleware services should focus on:
transparency transaction security and management - authentication and authorization distributed object management and services. Objects are defined as the combination of data and instructions acting on the data.

4) Secure Messaging, Security, and Electronic Document Interchange

Messaging can be defined as:
the software that sits between the network infrastructure and the clients or e-commerce applications. a framework for the total implementation of portable applications

34

They offer solutions for communicating nonformatted (unstructured) data, letters, memos, reports, as well as formatted (structured) data such as invoices, PO. With messaging tools, people can communicate and work together more effectively, no matter where they are located.

35

3) Interface and Support Services

Interfaces for e-commerce applications such as interactive catalogs, the customized interface to consumer applications such as home shopping. Support directory services, functions necessary for information search and access, which operate behind the scenes and attempt to organize the enormous amount of information and transactions generated to facilitate e-commerce. The difference - interactive catalogs deal with people, directory support services interact directly with software application.

2) Information Brokerage and Management

It provides service integration through the notion of information brokerage, the development of which is necessitated by the increasing information resource fragmentation. Information brokerage is intermediary who provides service integration between customers and information providers, given some constraint such as a low price, fast service, or profit maximization for a client It also addresses the issue of adding value to the information that is retrieved. E.g. FX company provides not only the latest currency exchange rate, but also hedging and risk management etc.

36

(1) E-Commerce Application services:

Distinct Categories of e-Commerce
Business to Consumer (B2C) Business to business (B2B) Consumer to Consumer (C2C) Consumer to Business (C2B) Intraorganizational e-commerce

37

Client Server Architecture

E-commerce is based on client/ server architecture
Client processes requesting service from server processes First used in 1980s, the model improves to be e-commerce usability, flexibility, interoperability and scalability.

38

In e-commerce the client is defined as the requestor of a service and a server is the provider of the service
Browser is the client and the customer, the computer that sends the HTML files is the server The server can also be a computer program that provides services to other computer programs

A web server is the computer program that serves requested HTML pages or files.
Uses client/server model and http(hypertext transfer protocol) Every computer on the internet that contains a web site must have a web server program.

39

Client Server Architecture

Most popular web servers are Deerfields WebSite and Microsofts Internet Information Server (IIS) Web servers are included as part of a larger package of internet and intranet related programs for serving e-mail, downloading requests for FTP files and building and publishing web pages. Typically the e-commerce customer is the client and the business is the server. In the client/ server model single machine can be both client and the server The client/ server model utilises a database server in which RDBMS user queries can be answered directly by the server

40

Client Server Architecture

The client/ server architecture reduces network traffic by providing a query response to the user rather than transferring total files. The client/ server model improves multi-user updating through a graphical user interface (GUI) front end to the shared database. In client/ server architectures client and server typically communicate through statements made in structured query language (SQL).

Two-Tier Architectures

41

The user system interface is usually located in the users desktop environment and the DBM services are usually in a server that is a more powerful machine that services many clients.

Client User Interface (Business Rules)

Server (Business Rules) Data Access

42

Two-Tier Architectures
It runs the client processes separately from the server processes, usually on a different computer:
The client processes provide an interface for the customer, and gather and present data usually on the customers computer. This part of the application is the presentation layer The server processes provide an interface with the data store of the business. This part of the application is the data layer The business logic that validates data, monitors security and permissions, and performs other business rules can be housed on either the client or the server, or split between the two.
Fundamental units of work required to complete the business process Business rules can be automated by an application program.

43

Two-Tier Architectures
Typically used in e-commerce
Internet retrieval, desicion support

Used in distributed computing when there are fewer than 100 people simultaneously interacting on a LAN. Implementation of processing management services using vendor proprietary db procedures restricts flexibility and choice of RDBMS for applications. Also lacks flexibility in moving program functionality from one server to another.

Three-Tier Architectures
Also called as multi-tier architecture A middle tier is added between the client environment and the DBM server environment Variety of ways to implement:
Transaction processing (TP) monitors Message servers Application servers

44

Web client

Web server

Database server

Three-Tier Architectures with TP Monitor

The most basic type
Type of message queuing, transaction scheduling, prioritisation service

45

Client connects to TP instead of the DB server The transaction is accepted by the monitor which queues it and takes responsibility to complete it by freeing up the client When a third part provides this service it is called TP heavy When it is embeded in the DBMS, it can be considered 2-tier and is referred to as TP lite

Three-Tier Architectures with TP Monitor

TP monitor provides:
The ability to update multiple DBMSs in a single transaction Connctivity to a variety of data sources (flat files & nonRDBMSs) The ability to attach priorities to transactions Robust security

46

More scalable than a 2-tier architecture Most suitable for e-commerce with many thousands of users

Three-Tier Architectures with Message Server

Messages are prioritised and processed asynchronously
Headers contain priority info, the address, the id no

47

Message server connects to the RDBMS and other data sources The message server focuses on intelligent messages, whereas the TP environment has the intelligence in the monitor and treats transactions as dumb data packets They are sound business solutions for the wireless infrastructures of m-commerce.

Three-Tier Architectures with an Application Server

Allocates the main body of an application to run on a shared host rather than in the user system interface client environment The application server does not drive GUIs rather it shares business logic, computations, and a data retrieval engine. With less sw on the client
There is less concern with security, Applications are more scalable Support and installation costs are less on a single server than maintaining each on a desktop client.

48

Three-Tier Architectures with an Object Request Broker Standard interoperability and object request broker Need for improving
(ORB) standards in the client/ server model. ORB support in a network of clients and servers on different computers means
A client program (object) can request services from a server program Object without having to understand where the server is in a distributed network or what the interface to the server program looks like

49

ORB is the programming that acts as the mediary or as a broker between a client request for a service from a distributed object or component and server completion of that request.

Three-Tier Architectures with an Object Request Broker Standard There are two prominent distributed object
technologies:
Common Object Request Broker Architecture (CORBA) Component Object Model (COM)

50

The industry is working on operability between CORBA and COM

Distributed Enterprise Architecture

Based on ORB technology Uses shared, reusable business models on a business enterprise-wide scale. Standardised business object models and distributed object computing are combined to give greater flexibility to the business With the emergence and popularity of ERP sw, distributed enterprise architecture promises to enable e-commerce to extend business processes at the enterprise level.

51

The Relationship Between Ecommerce and Web Database Constructionsand constantly evolving, supported by E-commerce is dynamic
technologies that are constantly changing Database storage is the oldest technology and currently used by e-commerce Business can implement
New sales and marketing channels Customer support Exchange of documents with other businesses

52

Transact over the internet using web interfaces to interact with back-end relational databases

53

E-Commerce Architecture I
Request HTTP Response Internet Explore Netscape Microsoft IIS Apache Web Server IBM HTTP Server

Browser

Web Server

54

E-Commerce Architecture II
Browser
Web Server

HTML,DHTML,XML JavaScript VBScript Java Applet

Middle Ware

55

E-Commerce Architecture II
Browser
Java Servlet/JSP JDBC JavaBeans RMI/CORBA J2EE/EJB Oracle9i DB2 mySQL Web Server

Middle Ware JDBC Driver

56

E-Commerce Architecture II
Browser
Application Server --Sun one Application Server --BEA Weblogic --IBM WebSphere -- JBoss Oracle8i DB2 mySQL Middle Ware JDBC Driver Web Server

E-Commerce Architecture: Three-Tier

Browser
Web Server Tier 1 Presentation Layer Tier 2 Application Server Business Logic Layer Tier 3 Database Data Layer

57

Web-based E-commerce Architecture

Tier 1 Tier 2 Tier 3 Tier N

58

DMS

Client

Web Server

Application Server

Database Server

59

Summary
Java Technologies for E-Commerce Application: Servlets, JSP, JDBC Java Technologies for Enterprise Application: RMI, EJB

60

Merchant Server

Internet

eg via existing channel; EFPOS or phone line

Buyer with Browser

Source: Treese & Stewart

Catalogue and Order DB

$$ Financial network

61

Internet

Merchant Server with SET Module SET Payment Gateway

Catalogue & Order DB

Buyer with Browser and a SET Wallet

Adapted from : Treese & Stewart

$$ Financial interchange network (Visa, MasterCard, etc)

62

Catalogue Servers with secure link

Catalogue Customer & Order DB & OrderDB

Internet

$$ Fulfilment network

Shared Transaction Server Buyer with Browser

Source: Treese & Stewart

$$ Financial network

63

Networking Services Software solutions Platform

64

65

You need

R and R
Relationships Repeat business