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05-02-2013

E-Business

Chapter 1

Electronic Business Understanding new internet economy and business

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E-Business

Oxford University Press 2012. All rights reserved.

E-Business

Learning Objectives
To understand The objectives of e-business Transition from traditional business to e-business Role of e-commerce, e-business and difference between them Features and advantages of e-business technology Establishing e-business, different types of e-business models Knowledge perspective of e-business
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E-Business

Introduction
Traditionally, business is exchange of articles, goods and food items, a need based.. Further, a businessman travelling to places for selling goods / individuals going to shops to buy any item Later, many layers / middlemen came in to play
Cont..
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E-Business

Introduction Cont..
It reduced the pace of the transactions, loss of information and gap between the demand and supply Production limitations - Simple production processes, relatively simple technologies and low production volume Led to - numerous manufacturing companies, small in size, unspecialized Distributed and diffused markets, lack of transportation & communication facilities, lot of information inefficiencies Led to - distribution within a small locality, difficult to balance supply and demand
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E-Business

Introduction Cont..
Economic, technological growth, new transport, communication means changed the business scenario Advent of internet & its use in business changed the overall business E-commerce, e-business where end-to-end business is empowered by electronic communication technologies, revolutionized the business Made ways & means available to do business with pace and eliminate few middle layers in transaction

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E-Business

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Objectives of e-business
E-business objectives can be listed as Primary objective : to use internet and electronic communication system to deliver business value by its effective use in business transactions Information analysis and access Penetration Addressing particular customer segment Improving user satisfaction Knowledge augmentation and its business use to increase stakeholders wealth.
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E-Business

Traditional Business to e-business


Steps for transition of existing traditional business to e-business are Document existing business process Consider competitive business advantage, ROI and other key benefits Select technology to support business process Roll out deployment plan
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E-Business Layers
Business model sits on top of layers Technical layers include performance, availability and security related issues Two layers interact with each other through application development layer The business model and business processes are tested against business objectives and that drives application development Every layers needs to be considered while moving ahead with legacy system to e-business
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E-Business

Forces Driving transformation to e-business


Different forces drive the transformation from legacy systems to e-business Some of these forces are Market forces Technology forces Economic forces Social forces

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Contributors for e-Business success


The contributors of successful e-business can be
Website Knowledge about the use Skilled manpower Acceptance from society Robust infrastructure Appropriate pricing structure Smooth internal and external information flow Connectivity Mass communication Network production
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Higher Level Contributors for E-business Success

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E-Business

05-02-2013

E- Business and E-Commerce


e-business, not limited to mere monetary and outward business transactions Involves internal and external communication to improve pace, efficiency, performance, customer satisfaction and allows a faster and more open process, with customers having greater control e-commerce, function of creating financial exchange with the use of digital medium Instruments and methods like, credit cards, electronic fund transfer etc. have become commonplace
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E-Business

E- Business and E-Commerce Cont..


The broadest definition of e-commerce is the conduct of transactions by electronic means e-business is a superset and it can be defined as conducting business and all business related activities, internal, and external transactions along with communications using electronic means In short, e-business is the business that is empowered by e-commerce

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E-Business

Difference Between e-commerce / e-business


e-business Superset of e-commerce e-commerce Subset of e-business

E-commerce in e-business : Issues


1. Lack of awareness and understanding of the value of ebusiness and e-commerce 2. Reluctance to go for the required change in environment 3. Lack of ICT knowledge and skills 4. Doubts about the capability of organizations to take advantage of the benefits e-business 5. Assurance about security and privacy before getting engaged in use of internet related technologies 6. Lack of legal infrastructure& legal liability on e-payments 7. Issues related to financial costs
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E-Business

Deals with all aspects of business and not More about monetary limited to just business transactions transactions, buying & selling Internal processes such as production, inventory management, product development, risk management, finance, etc., are also part of e-business Focuses on the outward facing processes and not related to internal processes

Other aspects of business like contacting Does not include other the customer on-line, educating him, business aspects like in eproviding services, and product related business information, that all constitute e-business
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E-Business

E-business Framework

E-business Framework

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E-Business

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Features of E-Business Technology


E-business features drive the new economy Some of the major features of e-commerce are Ubiquity Global reach Universal standards Richness Interactivity Information density Personalization
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E-Business

E-business technology layers

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E-business Service Model


e component in each of these transactions is a value proposition This component gives easy interface for service request No processing component sits on the customer side All processing is done at the end of the service provider Customer does not need any special hardware or software
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E-Business

Advantages of E-business
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Provides flexibility No need for physical presence Cost reduction Transparency Personalization End-to-end information flow Integrated solution Saves time Improved communication with customers, suppliers Online publishing
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E-Business

Benefits for the retailer


E-business provides benefits for business houses, customers as well as for retailers These benefits come from information efficiencies and penetration, in the form of market exposure and cost reduction Benefits for retailers include Increased market exposure Increased sales Reduced costs
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E-Business

Establishing E-business
Establishing e-business can be transformation from traditional business or a completely new business Apart from the traditional parameters, other strategic aspects that need to be considered while establishing ebusiness are E-business frameworks and standards E-content interoperability Inclusive solutions Trusted frameworks Support for interoperable reference implementations
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E-Business Models
E-business model A framework with all business components to create value and meet business objectives A set of business processes through planned activities to achieve business objectives Aim to leverage unique properties and the strength of e component of technology to optimize business objectives Create new ways of creating, capturing, and delivering value to customers Various e-businesses models are distinguished by the nature of market relationship & the nature of transactions
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E-Business

Ingredients of Business Models


Various ingredients of business models are
The offerings and value proposition Revenue model / cash flow Market forces and available opportunities Competition Positioning of product Market strategy Technology and information technology strategy Organizational structure and development Management team Knowledge management
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E-Business

Elements of successful e-business Model


Web technology provides a platform for building an e-business model to improve internal and external processes New business models aim to use and leverage unique qualities of internet and in turn the World Wide Web A successful business model needs to address various elements as Value proposition Market opportunity Competitive environment Competitive advantage
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E-Business

Information & Financial Transactions

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E-Business

Technology Evolution in E-arena

Transaction based e-business Models


e-business models are classified based on parties taking part in transaction Properties of business transactions like purpose of transactions and parties involved, are used while deciding the type of e-business model
1. 2. 3. 4. 5. 6. Business to business, B2B model Businesses to consumer, B2C Business to government, B2G Consumer to consumer, C2C Consumer to business, C2B and Business to employee, B2E
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E-Business

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B2B e-business Models


Most common type of business transactions, 75 to 80% of transactions are of this type Various companies and transactions coming under this model are Transactions among providers, distributors, players, manufacturers and other ancillary organizations Various logistics related transactions, distribution of material, storage or warehousing Organizations providing software as a service (SAAS), application service providers (ASP), Outsourcing of activities related to e-transactions including project development, webhosting, security services etc. , KPOs, BPOs, inter bank transfers, security companies etc.
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B2B Transactions

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B2C e-business Model


Second most popular e-business model after B2B Uses a concept of on-line distribution / selling of services, products or information from organizations to actual consumers Advantages of B2C model
Reduces the transaction costs Increases the information space available to consumers Allows smaller players to enter in the global market Saves cost needed for setting up shops and physical distribution channels
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E-Business

B2C e-business Model Cont..


Manufactures, distributors, information providers, and publishers use B2C model extensively Includes different transactions between companies and consumers like Customer buying various articles like books, computers, computer accessories, etc. Customer accessing information, analysing information, and in some cases buying information or information centric articles Customer seeking some sort of services from the companies
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E-Business

B2C Transactions

B2G e-business model


Transactions between private contractors and government agencies are part of this model Refers to commercial enterprises selling product, services and information to government agencies Connects government and private sector Include use of internet for public procurement and for different government related procedures Increases transparency in different operations E.g. energy providing companies and government energy distribution companies, infrastructure building companies, government infrastructure authorities etc.

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E-Business

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C2C e-business model


About individuals doing business in online environment Allows individual auctions, individuals trying to sell old/ new articles, cars, etc. through electronic means/ website Slowly becoming popular Major hurdle in accepting C2C model is the trust factor The peers interact with each other by various means like Direct transaction between individuals Individuals interacting through some well-known portal or the auction site The individuals advertise their product through some site using classifieds or advertisement
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E-Business

C2C Transactions

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M-commerce and e-business


Advent of wireless technologies and cell phones made it possible to carry business transactions using mobile phones Commerce / transactions that take place using wireless technology (cellular phones, wireless devices, etc.) is referred to as m-commerce Many of the B2B and B2C transactions are possible over m-commerce to build m-business models Poses different sort of technology and usability challenges
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E-Business

Strength / Opportunity analysis of E-business


As a part of SWOT analysis, strengths of e-business include 1. Organization / company can reach to very specific target group 2. Can have very specific instructions and services for the said target group 3. Low investments within the traditional sector 4. Reputation of traditional brands can still be used and even glorified with innovative marketing means through electronic channels
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Cont..
E-Business

Strengths Cont..
5. E-business is easily expandable compared to traditional businesses 6. Allows prices to respond according to demand (direct marketing 7. Help in increasing the yield maximize revenue 8. Lowers the cost of stocks and personnel 9. Minimizes dependence on physical resources 10.Available 24 hours a day

Opportunities
Creates opportunities for businesses like 1. use of gimmicks for promotional activities on line 2. Allows dealing with wholesale trade companies as theres a connectivity between various companies 3. Promote brands and take those brands to global level 4. Selling well-known brands very easily, as the customers cannot see the actual product, they prefer branded 5. Operate in niche markets at global level 6. Allows organization to improve decision efficiencies because of integration and availability of information
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E-Business

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E-Business

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Opportunities Cont..
7. Ability to connect and integrate with other organizations allowing to sell complete range of products by using partnerships 8. Allows to sell product and the related services together 9. Help in building efficient market, as the increase in transparency due to electronic communication means 10. Delivers different kinds of services for different prices
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E-Business

Proactive E-Business Strategy


It is a framework that is about business transactions, means, social environment and entities taking part in business transactions Business model is the result of a business strategy E-business strategy is
Totality of how a company selects its customers Defines and differentiates its offerings Defines the task it will perform itself & the tasks it will outsource Configure its resources Creates utility customers and Captures profit
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E-Business A Knowledge Perspective


E-business empowers individuals, businesses and customers with the ability to collect information & use it Knowledge Management (KM) is about making right knowledge available with right person at right time Includes building of right knowledge and processing it to take it to next level E-business makes the KM platform available for this knowledge management to empower business Knowledge about suppliers, retailers, specific areas and services empower business with knowledge E-businesses build and use effectively this knowledge on eplatform Oxford University Press 2012. All rights reserved. E-Business