ISYS6318 – E-business Concept

Week – 3
E-Environment
 LEARNING OUTCOMES
• Describe all aspects of e-business including concepts, business
models, strategies, platforms and technology.
 OUTLINE
• Social and legal factors.
• Environmental issues related to internet use.
• Taxation.
• Economic factors and business competition.
• Political factors.
• E-government.
• Technology innovation and assessment.
Social and legal factors
• There are various reasons for everyone to do their online activities,
especially transaction activities.
• Leaders must be able to understand the factors that influence or
become a driving force for people to carry out activities online.
 Internet Adoption Factors
• Chaffey et al. (2009) suggest that the following are important factors
that influence the adoption of any e-commerce service:
• Access fee. Internet access costs, the more users it should be, the cheaper it is.
• Value proposition. How big is the need or obligation of the customer to make
transactions online.
• Ease of use. How easy is it for users to take advantage of internet technology
and e-commerce applications.
• Security. Security in transactions and data security must be guaranteed by law
and company.
• Fear of the unknown. The influence of security-related rumors and more can
turn potential users away.
 Channel Usage Factor
• To examine how much influence an online channel is, we must know
how much media, intermediaries and influencers can influence users
to take advantage of the digital business services we offer.
• These three things are the main factors related to user motivation.
• Businesses need to research this in order to effectively run their
marketing campaigns through the right media, intermediaries and
influencers.
 Online Motivation Factors
• Rodgers et al. (2007) provide a useful framework for understanding
different motivations for using the web. According to him there are
four (4) common and cross-cultural motives:
• Research (information acquisition)
• Communication (socialization)
• Surfing (entertainment)
• Shopping.
 Online Purchasing Factors
• Online purchases are influenced by the level of customer trust in e-
commerce services.
• The level of customer trust is also influenced by how reliable the
security of the online transaction services used is.
• E-commerce service providers and digital businesses must pay close
attention to this security factor in addition to government regulators
who must also establish legal certainty.
 Factors Related to B2B Transactions
• Daniel et al. (2002) examined digital business adoption in UK SMEs
and noted four defining points:
• Developers, who are actively developing services, but are limited at the time
of research so that they are less innovative.
• Communicators, who use email to communicate internally and with
customers and suppliers.
• Web presence.
• Transactors. Participants in business transactions.
Environmental issues related to internet use
• In 2007 IMRG launched the Go Green, Go Online campaign where they identified six reasons
why they believe e-commerce is environmentally friendly:
• Reducing the number of vehicles. This is related to the reduced need to travel for shopping and
work. With digital technology, almost everything can be done from home.
• Decreased storage requirements for goods. This is related to the pre-order trend when making
online purchases.
• Reducing the use of paper for advertisements, brochures and newsletters.
• Reducing the need for packaging. This is related to the sale of digital materials such as software,
books, music and videos that can now be downloaded directly, no longer needing to be
packaged as in the past.
• Reducing waste. The decline in the use of paper and automatic packaging has an effect on this.
• Digitization. Many of today's products are converted into digital format.
Taxation
• In Indonesia, the tax issue is hot, especially after news emerged from
the Indonesian Ministry of Finance encouraging ecommerce
practitioners, in this case product sellers, to have a NPWP, which
indirectly encourages them to obey taxes.
• Regulations related to taxation for ecommerce practitioners are the
Minister of Finance Regulation (PMK) Number 210 / PMK.010 / 2018
concerning Tax Treatment of Trade Transactions through Electronic
Systems. The regulation regulates taxes for:
• E-commerce players.
• Marketplace organizers.
• Other ecommerce organizers.
Economic factors and business competition
• The electronic economy (e-economy) is defined by Booz Allen
Hamilton (2002) as a system of dynamic interactions between citizens,
businesses and governments that utilize online technology to achieve
social or economic good.
Political factors
• The political environment that can influence the digital business
ecosystem is shaped by interactions between government agencies,
public opinion, consumer pressure groups and industry-supported
organizations.
• Every policy that emerges related to digital business is of course the
result of a consensus which is a balancing act of all these forces.
• Booz Allen Hamilton (2002) reviews the approaches used by
governments to encourage Internet use and identifies five broad
themes in policy:
• Improve access device penetration.
• Increase the skills and confidence of the target group.
• Determine the qualifications of Internet users (eg, a certain age regarding
adult content etc.).
• Build trust, provide security or eliminate fear.
• Direct marketing campaign.
E-government
• Internet governance is the control applied to managing the growth of
the Internet and its use.
• Electronic government (e-government) is the use of internet
technology to provide government services to citizens.
• Types of actions taken by many governments to encourage digital
business or e-business in their countries:
• Access, participation and skills.
• E-business adoption.
• Confidence, trust and security.
• E-government strategy and implementation.
• The environment for an information economy company.
• International dimension.
Technology innovation and assessment
https://blog.octo.com/en/accelerate-innovations-by-blending-the-best-practices-of-three-models-of-innovation-diffusion-gartner-g-a-moore-c-christensen/
 Alternative Innovation Decisions
• Ignore the novelty.
• Adopt it.
• Evaluating first, then deciding whether to adopt or not.
 Gartner Hype Cycle (1)
• Technology triggers - The first phase of the hype cycle is a 'technology
trigger or breakthrough', product launch, or other event that generates
enthusiasm among the public.
• Inflated peaks of expectations - In the next phase, the frenzy of publicity
usually generates excessive enthusiasm and unrealistic expectations.
There may be several successful applications of the technology, but there
are usually more failures.
• Period of disappointment - Technology enters the trough of
disillusionment because it fails to meet expectations and quickly becomes
neglected. As a result, the publicity for the related technology has
dropped dramatically.
 Gartner Hype Cycle (2)
• The slope of enlightenment - Although the publicity about the related
technology may have stalled, some businesses are continuing to
explore and experiment to understand the benefits and practical
applications of technology.
• Productivity plateau - A technology reaches a 'productivity plateau'
because its benefits have been widely demonstrated and accepted.
Technology has become increasingly stable and developed in the
second and third generations. The altitude of the final plateau varies
according to whether the technology is broadly applicable or only
benefits certain markets.
 Adopter Technology
• Enthusiast / Innovators. (2.5%) have greater resources, are more educated,
are more prosperous and are more willing to take risks.
• Early adopters / Opinion leaders. (13.5%) are younger, more educated, tend to
be community leaders, in terms of welfare, they are still below enthusiasts.
• Early majority. (34%) are more conservative but open to new ideas, active in
the community and influence their social environment.
• Late majority. (34%) are older in age, less educated, moderately conservative
and less socially active.
• Laggards. (16%) are very conservative, have little resources and capital, the
oldest in terms of age and the majority are poorly educated.
 Business Growth Horizons
  Horizon 3 Horizon 2 Horizon 1
Description The initial phase where The phase where theThe phase where
the business has not business has started
business maturity has
been established for and has the prospect
been reached,
long or is in the of making a profit in
maximum profit is
planning stage the future if it has
obtained, the business
sufficient resources
is in a defensive
position
Metrik Value of options or Net present value Return on invested
shares (NPV) capital (ROIC)
Human Resources Champions and Business Builders Business maintainers
visionaries
Capability Capacity requirements Capabilities are being It already has a mature
remain unclear built or acquired capability platform
 REFERENCES
• Chaffey, Dave. (2013). Digital Business and e-Commerce Management: Strategy,
Implementation and Practice. 6. Pearson. United Kingdom. ISBN: 978-0-273-
78654-2.
• Jelassi, Tawfik. Martinez-Lopez, Francisco J. (2020). Strategies for e-Business:
Concepts and Cases on Value Creation and Digital Business Transformation. 4.
Springer. ISBN: 978-3-030-48949-6.
• Kementrian Keuangan. (2019). Ini Ketentuan Pajak Bagi Pelaku E-Commerce.
Kementerian Keuangan. https://www.kemenkeu.go.id/publikasi/berita/ini-
ketentuan-pajak-bagi-pelaku-e-commerce/.
• Gartner_Inc. Understanding Gartner's Hype Cycles.
https://www.gartner.com/en/documents/3887767/understanding-gartner-s-hype-
cycles.
 REFERENCES
• On Digital Marketing. The 5 Stages of Technology Adoption. (2015, July 24).
https://ondigitalmarketing.com/learn/odm/foundations/5-customer-segments-
technology-adoption/.
• Fagnent, S. Accelerate Innovations by Blending the Best Practices of Three
Models of Innovation Diffusion (Gartner, G.A. Moore , C. Christensen). (2018,
February 08). fr. https://blog.octo.com/en/accelerate-innovations-by-blending-
the-best-practices-of-three-models-of-innovation-diffusion-gartner-g-a-moore-c-
christensen/.
• Mc Kinsey Quarterly. (2018, February 9). Enduring Ideas: The three horizons of
growth. McKinsey & Company.
https://www.mckinsey.com/business-functions/strategy-and-corporate-
finance/our-insights/enduring-ideas-the-three-horizons-of-growth.