Definition: Electronic Business

• An process that an organization conducts over a

computer-mediated network
– Production – procurement, ordering, stock
replenishment, payment processing, production
control, etc.
– Customer-focused – marketing, selling, customer
order processing, etc.
– Internal or management-focused – employee
service, training, recruiting, information sharing,
etc.
 Definition: Electronic Commerce

• Any transaction completed over a

computer-mediated network that involves the
transfer of ownership or rights to use goods or
services.
• Completed transactions may have a zero price.
 Definition: Electronic-Business
Infrastructure
• The share of total economic infrastructure
used to support e-business processes and
conduct e-commerce transactions.
– Hardware
– Software
– Telecommunication networks
– Support services
– Human resources
E-BUSINESS
E-Business is the powerful business environment that is

created when we connect critical business systems directly to

customers, employees, vendors, and business partners using

intranets, E-Commerce technologies, collaborative

applications and the Web

Developing E-Business Successfully means…...

BUILDING RELIABLE AND SCALABLE SYSTEMS FOR…

• security
• collaboration
• messaging
• E-Commerce payments
• supply-chain management
• sales force
• data warehousing
• customer relations

AND INTEGRATE ALL THE ABOVE WITH……..

• Back-end operations
E-Business has…..

• Increased the competition

• made companies reconfigure their business
• created a critical new market
• exploded the distribution channels
• imparted more power to customer
Main Ideas of E-Business

• Start Simple but grow fast

• Build on what you have

Evolution of E-Business
THREE GENERATIONS OF E-BUSINESS

• Establishing static presence on the web

• Lining front-ends with the back-ends
• Benefits of automation and integration extended to
the customer

contd...
Generation 1
• Developing web-sites that served as the catalogs
Generation 2
• Linking the Web front-ends with back-end order management
and inventory control systems
• Enabled customers to place and track orders directly from a
company’s web site, thus giving customers more control over
the order process
• Vendor-centric : company’s ability to automate internal
process and link them to the web for the customers
contd...
 Generation 3

• Companies extends the benefits of automation and

integration to the customer
• not only deliver information directly to the customer but also
customize services and data delivery in order to enable rich
interaction among systems
• Companies conduct business programmatically
• Customer-centric approach: employs automation, integration
and data delivery techniques to provide maximum
competitive value to external customers
E-Business Models
There are three types of market places:

• Controlled by Sellers
• Controlled by Buyers
• Neutral Marketplaces
Seller Controlled Markets

• Set up by single vendor seeking many buyers

• Main aim
to retain value and power in any transaction
Buyer Controlled Markets

• Set up by or for one or more buyers

• Main aim
• to shift value and power in marketplace on the
buyer’s side
• Buyer intermediaries can also be there
…act as agents
Neutral Markets

• Set up by third party intermediaries to match

many buyers to many sellers
• Matches buyers to sellers at an auction
• Commission based
 e-Business vs e-Commerce

E-Business:
Improving business
E-Commerce: performance through low cost and
• marketing open connectivity:
• selling
• buying of products and • New technologies in the value chain
services on the Internet • Connecting value chains across businesses

in order to :

• Improve service/reduce costs

• Open new channels
• Transform competitive landscapes

e-Business is more than selling and marketing online!

 e-Business vs Business
Re-
Re-
Assess
Assess

Implement
Implement

‘Traditional’: ‘E-Business’:
Implementation
Implementation
Planning
Planning

Opportunity
Opportunity
Analysis
Analysis

Understand Business
Understand Electronic Business

Traditional business organization ‘develop step by Characteristics of an “Electronic Business journey”:

step’: ● Definitions of the future are ‘fuzzy’
● Definitions are clear
● Permanent and unpredictable change in the business and
● No change in the business and technology environment
technology environment
● High time pressure
● Time to market and speed are major competitive factors
● Continuous learning
● Continuous learning & fast adaptation is required

E-Business is not a project - but rather a journey that requires vision and non-linear procedures
 Phases of e-Business Development
Four stage model in E-Business maturity relates business value to e-business leverage

Convergence
Cross-Industry
Supplier/Customer
Just under 15% are in the convergence
integration phase.
Connections to suppliers
and customers are fully
Transformation
Over 50% are in the channel E-Business enabled.
phase of Industry transformation,
E-Business development achieve competitive
Business Value

with a web presence but no advantage

infrastructure tie-in.
Integration
er
ir v
Integrate with D
customers
Channel and suppliers
Brochureware
and buying /selling
ler
Enab

E-Business Leverage
Source: PricewaterhouseCoopers
Phases of e-Business Development
New Business Rules from E-Business
• Customers determine everything.
• Knowledge and information become more
valuable than physical assets.
• People want more choices of products and
services.
• Time is present time, distance is zero.
• Technology and network determine how the
business is conducted.
Choosing a Marketplace Model
Choosing a marketplace depends on four
factors:

• Are there transactions or benefits to be realized ?

• Is electronic market for product developing quickly ?
• Does company have substantial market share or buying power ?
• Would a neutral intermediary be beneficiary ?
E-Business Cycle
FOUR PROCESSES
• Transform
• Build
• Run
• Leverage
 Transform

• Ability of company to transform core business processes

and leveraging the reach and pervasiveness of the
internet

• where to start?

• Key to success lies in making e-business priorities, the

priorities of business
Transform contd…..

PRIORITY WHAT TO DO

• Extending reach and • Enable web-site for

capturing new markets E-commerce

• Improve customer • start giving instant

retention through information to
better services customers on web-site
Build

• Involves building the transform applications

• Fastest and effective way is simply to extend and

continue to modernize existing applications and
develop the new ones with the existing information
systems
Run

To run e-business successfully and optimally:

• offer reliability to ensure trust

• provide security that provides confidence
• manageability to ensure performance
• Since e-business solutions must grow quickly in
multiple dimensions, SCALABILITY is also important
Leverage

Outside the Organization

• Becoming customer-centric means leverage existing

data for greater understanding of the customer.

• What do customer buy, when and how do they buy?

-----------Use this information optimally
Leverage Contd...

Inside the Organization

• Leverage the experience and knowledge of
individuals within the organization -----
to make a complex process work
to roll out a new product

• Leverage existing knowledge and replicate best

processes across the organization to improve
innovation & responsiveness
The Benefits of e-Business
• Generate additional Revenues
• New markets
• New products
• New customers
• Reduce Costs (Integration and ‘Collaboration’)
• Process efficiency
• Reduce IT variety and -complexity
• Synergies with other initiatives
• Customer Retention (‘Added Services’ and ‘Virtual Community’)
• Know more about your customers
• Integrated channel management
• Proactive and personalized offerings
• Improve Image / Position Brand
• Applying innovative technologies
• Leadership enterprise
• Address younger customer segments
• Not to miss the boat
• Keeping options open
• Acquire know-how
• Focused investments
 Potential Benefits of E-Business
• More product/service selections
• Higher Productivity
• Improved accessibility and convenience
• Better availability of information
• Shorter lead time
• Improved communication
• Stronger competitive position
 Capabilities and Benefits of E-Business

• Global Reach. Goods and services can be sold to customers worldwide.

• Personalization. Companies can customize products and reduce inventory.
• Interactivity. Customers and suppliers can negotiate prices online.
• Right-time and integrated marketing. Online retailers provide products when and
where customers want them and promotions can be directed to individual customers.
• Cost savings. E-business can reduce costs.
 E-Business Challenges (Internet Fraud)

• Internet Crime Complaint Center logs more than 200,000 complaints annually.
• 50% of the complaints referred to law enforcement agencies deal with online
auctions.
• Phishing is a growing form of Internet fraud that uses e-mail or pop-up messages to
get unsuspecting victims to disclose personal information.
• Vishing, or voice phishing, involves phone calls to credit card customers to obtain
personal and banking information.
• Payment fraud is growing.
 E-Business Challenges (Privacy]

✓ Privacy is among the top concerns of Internet users.

✓ E-business sites often require passwords and use electronic

signatures, an electronic form of identity verification.
✓ Companies can track customers’ shopping and viewing habits through
cookies.
✓ Customers usually prefer that companies do not share their personal
information. Merchants have responded by joining privacy
organizations.
✓ Privacy protections may soon become legally required.
✓ Employees also have concerns that employers are monitoring their
Internet behavior.
✓ Companies worry about data theft.
E-Business Challenges (Poor website design)

• 50% of shopping carts are abandoned before any purchase is made.

– Lack of Information
– Inability to find the information they need
– Feeling overwhelmed by too much information
• Companies that have brick-and-mortar experience often have better success
satisfying customers than Internet-only retailers.
• Online sales can compete with business partners such as retailers and
distributors causing disputes called channel conflict.
Impact of E-Business