Management Information Systems in Organizations

ELECTRONIC COMMERCE

Prepared by: Jan Wong

The Learning Outcomes

At the end of this session you should be able to:

DESCRIBE DISCUSS DESCRIBE

E-Commerce, it’s scope , benefits , limitations and types The importance and activities of online advertising B2B and emerging applications such as B2E

E - BUSINESS VS E - COMMERCE

E-Business

E-Co m m e rc e
Describes the process of buying, selling,

 Broader definition of ecommerce  Beyond buying and selling of goods and services  Includes servicing customers, collaborating with business partners, conducting e-learning, processing electronic

transferring, or exchanging products, services, and/or information via computer networks, including the Internet
Can take several forms depending on the degree

of digitization (the transformation from physical to digital).


The degree of digitization relates to: the product (service) sold the process the delivery agent (or intermediary).

E - COMMERCE ORGANIZATIONS
 Brick-and-mortar (or old-economy)
S Pure physical organizations / corporations

 Virtual (or pure-play)
S Organizations that are engaged only in E-

Commerce

 Click-and-mortar (or click-and-brick)
S Conduct some e-commerce activities, yet their

primary business is done in the physical world

TRANSACTION MEDIUMS
 Most e-commerce is done over the Internet.  Also be conducted on private networks, such as value-added networks (VANs, networks that add communication services to existing common carriers), on local area networks (LANs) or wide area networks (WANs)  In other words:
S Intranet, Extranet and even the Enterprise Web

8

TRANSAC TION TYPES

E-Commerce can happen between various parties business(B2B):
S

S Business-to-

Both the sellers and the buyers are business organizations.

S Collaborative commerce

(c-commerce):

S In c-commerce,

business partners collaborate electronically.
S

Usage of Extranets

S Business-to-consumers

(B2C):

S The sellers are

organizations, and the buyers are individuals.

S Consumers-to-businesses

(C2B):

8

S

TRANSAC TION TYPES

Consumer-to-consumer (C2C):
S

Individuals sell products or services to other individuals.

S Intrabusiness

(intraorganizational) commerce:
S An organization uses EC

internally to improve its operations. A special case is known as B2E (business to its employees)
S Government-to-citizens

(G2C):
S A government

provides services to its citizens
S

COMPONENTS of E - COMMERCE

“The field of e-commerce is broad, and there are many of EC applications” How can organizations support ECommerce Applications?

E-Commerce Framework

5

COMPONENTS /

PILLARS
of E - COMM

S People: S Sellers, buyers, intermediaries, information systems specialists and other employees, and any other participants. S Public policy: S Legal and other policy and regulating issues, such as privacy protection and taxation. S Marketing and advertising: S Like any other business, EC usually requires the support of marketing and advertising. S Support services: S Many services are needed to support EC. They range from payments to order delivery and content creation. S Business partnerships: S Joint ventures, emarketplaces, and

“To execute these applications, companies need the right information, infrastructure, and support services”

S Auctions are used in B2C,

B2B, C2B, e-government, and C2C commerce

TYPES OF E COMMERCE :

S Forward auctions
S Sellers use as a selling

AUCTIONS

“Electronic Auctions (eAuctions): A market mechanism by which sellers place offers and buyers make sequential bids”

channel to many potential buyers. Items are placed at sites for auction and buyers bid continuously for the items. S 2 types of forward auctions
S Reverse auctions S Have one buyer, usually an organization, that wants to buy a product or a service. Suppliers are invited to submit

S Enables an enterprise to form

TYPES OF E COMMERCE :

electronic relationships with its distributors, resellers, suppliers, customers, and other partners
S Sell-Side Marketplaces: S Sell products or services to

B2B

“The buyers, sellers, and transactions involve only organizations”

other organizations electronically, from their own private emarketplace S Similar to B2C E-Storefront / Market
S Buy-Side Marketplaces: S Buy products or services

from other organizations electronically, usually from their own private emarketplace S One buy-side model is a

S Examples: S Allow employees to manage

TYPES OF E COMMERCE :

B2E

their fringe benefits S Take training classes electronically. S Electronic corporate stores that sell a company’s products to its employees, usually at a discount

“Companies are finding many ways to do business electronically with their own employees by disseminating information over the Intranet”

S Some other uses: S Sales force automation
S Order processing &

tracking, contact management, information sharing, inventory monitoring and control, employee performance evaluation

S E-Commerce Between

strategic business units (SBUs)

S Buy / sell / trade between

BUs S E.g. Group of companies

S Government-to-Citizens

(G2C)

TYPES OF E COMMERCE :

S Paying of bills S Renewal of licenses S Information S Funding

E - GOVERNMENT
“Use of Internet technology in general and e-commerce in particular to deliver information and public services to citizens, business partners and suppliers, and those working in the public sector”

S Government-to-Business

(G2B)

S Company registration S Project tenders

S Government-to-Government

(G2G)

S Online non-commercial

interaction between Government organizations, departments, and authorities

TYPES OF E COMMERCE :

S C2C Auctions S Classified Ads S Personal Services
S Dating services, online

C2C

“E-commerce in which both the buyer and the seller are individuals (not businesses)”

coaches, clubs, etc
S Support Services to C2C S Paypal, ToCheckOut, iPay88

TYPES OF E COMMERCE :

S Mostly B2C S In the past: S Home catalogs S TV shopping channels S Problems faced:
Expensive upkeep / production S Printed catalogs not up-to-date S TV shopping is limited to time
S

E - TAILING

( e - storefronts / marketplaces )
“Exchange of goods or services without a monetary transaction”

S Solution: E-Tailing. Why? S Delivery of services

(buying an airline ticket or stocks) can be done 100

percent electronically (convenience) S Cost reduction potential

S Seen also in B2C Service

TYPES OF E COMMERCE :

Industries

S Electronic banking S International and MultipleS S S S

E - TAILING

( e - storefronts / marketplaces )
“Exchange of goods or services without a monetary transaction”

Currency Banking Online Securities Trading Online Job Market Travel Services Real Estate

S However, also face major

issues:

S Resolving channel conflict S Resolving conflicts within

click-and-mortar organizations S Organizing order fulfillment and logistics S Determining viability and risk of online e-tailers S Identifying appropriate revenue models

E - COMMERCE SUPPORT SERVICES
 B2B and B2C applications require payments and order fulfillment. Portals require content, etc  These services include:
S e-infrastructure (mostly technology consultants,

S S S S S

system developers and integrators, hosting, security, and networks) e-process (mainly payments and logistics) e-markets (mostly marketing and advertising) e-communities (different audiences and business partners) e-services (CRM, PRM, and directory services) e-content (supplied by content providers)

WHY DO WE NEED E - COMMERCE SUPPORT SERVICES

E - COMMERCE SUPPORT SERVICES
 Electronic Payments are an integral part of doing business, whether in the traditional way or online.
S In most cases traditional payment systems are

not effective for EC, especially for B2B

 Types of E-Payments
S S S S S S S

Electronic checks (e-checks) Electronic credit cards Purchasing cards, Electronic cash (e-cash) Electronic Bill Presentment and Payments E-wallets Virtual credit cards

E - COMMERCE ALSO REQUIRES :

MARKET RESEARCH & ONLINE ADVERTISING / MARKETING

MARKET RESEARCH
 For successful e-commerce (especially B2C)
S Important to find out who are the actual and

potential customers and what motivates them to buy

 How?
1. Asking Customers What They Want 2. Observing Customer Behavior on the Web:
Ø Brand- and Vendor-Finding Agents and Price Comparisons Ø Search Agents Ø Collaborative Filtering Agents Ø Other Agents (e.g. Social Media Networks)

CONSUMER BEHAVIOR MODEL

MARKET RESEARCH :

MARKET RESEARCH
 Several models have been developed in an effort to describe the details of the decision-making process that leads up to and culminates in a purchase  Generic Purchasing-Decision Model
1. 2. 3. 4. 5. Need identification Information search Evaluation of alternatives Purchase and delivery After-Purchase­Evaluation

ONLINE ADVERTISING / MARKETING
 Advertisement is an attempt to disseminate information in order to influence a buyer–seller transaction  Traditional advertising media
S Impersonal, one-way mass communications S TV, Newspapers, Magazines, etc

 Internet advertising media
S Media-rich, dynamic, and interactive

ONLINE ADVERTISING / MARKETING
 Methods:
S Banners Ø Electronic billboards and is the most commonly used form of advertising on the Internet S Pop-Up, Pop-Under, and Similar Ads S E-Mail Advertising S Electronic Catalogs and Brochures S Other Forms of Internet Advertising Ø Pay-Per-Click (Google Adwords) Ø Sponsored search results

ONLINE ADVERTISING / MARKETING
 Online advertising issues & approaches:
S Unsolicited Advertising Ø Spamming S Permission Marketing Ø Also known as: Opt-In marketing S Viral Marketing S Interactive Advertising and Marketing S Online Promotions Ø Coupons, events, attractions Ø Search engine optimization

ONLINE ADVERTISING / MARKETING …

CAN ALSO DRAW OFFLINE EXPOSURE & SALES

THINGS TO TAKE NOTE OFF
 Difference between E-Commerce and E-Business  Brick-and-Mortar, Virtual & Click-and-Mortar  8 Transaction types in E-Commerce  How organizations can sustain it’s E-Commerce Applications (5 Components / Pillars)  The types Online Advertising  Why Market Research?  What are E-Commerce Support Services

ELECTRONIC

COMMERCE

Management Information Systems in Organizations

Coming

soon… next

class

ENTERPRISE SYS .: S . C . to ERP to Understanding ERP and CRM why organizations are moving to CRM
CRM

IT’S TIME FOR SOME DISCUSSIONS !
 Differentiate the following terms:
S E-Commerce and E-Business S Forward and Reverse Auctions S Spamming and Permission Marketing

     

What are: E-Bartering, E-Storefronts, E-Malls / Marketplace? What is Online Advertising? What are it’s benefits? List 5 reasons for E-Commerce failures and 5 suggestions for it’s success Discuss the major limitations of E-Commerce. Which of them are likely to disappear? Why? Discuss the benefits to both sellers and buyers of B2B What are the benefits of E-Government?

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