EC 589 -E-Commerce Management

IntroductionFrom E-Commerce to E-

Business

DePaul University – CTI John Fisher

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Agenda

Course OverviewThe New Economy From E-Commerce to E-MarketplaceProfile of customersE-Business TransformationAn Example

Implications for the Association Segment

Next Class

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Course Overview

EC 589 – E-Commerce ManagementCapstone course for ECT MajorsDevelopment of e-business strategiesApproaches and models for business transformation using the WebThe fall of the dot-comsImplementation issues in a brick & mortar world again

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Course Overview

Distance Learning SectionSame assignmentsSame requirementsCOL section will participate in two classes

Course Format Group discussion rather than formal lecture Case studies and recent topics in the news Guest speakers

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TextbooksMain Text:

E-Business 2.0: Roadmap for Success.  By Ravi Kalakota and Marcia Robinson, Addison-Wesley, 2000.  ISBN 0-201-60480-9

Supplemental Text (choose one):Now or Never: How Companies Must Change Today to Win The Battle for Internet Consumers.  By Mary Modahl, 2000. ISBN 0-06-662012-0 Enterprise E-Commerce by Peter Fingar, Harsha Kumar, Tarun Sharma (January 2000) Meghan-Kiffer Press; ISBN: 0929652118Futurize Your Enterprise: Business Strategy in the Age of the E-customer by David Siegel (September 16, 1999) John Wiley & Sons; ISBN: 0471357634Dynamic E-Business Implementation Management : How to Effectively Manage E-Business Implementation (E-Business Solutions) by Bennet P. Lientz, Kathryn P. Rea (July 2000) Academic Pr; ISBN: 0124499805

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Additional Material & Resources

Other reading: Located in Course Documents section of COL WebHBR, McKinsey Quarterly, Gartner GroupCurrent news articles – “In the News”

Other resourcesClass web page, BusinessWeek.com, etc

• See Link page on Class Web

Your company or one you know

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Assignments#1 Industry Impact Analysis – 20% (Individual)

5 Page paper & class presentation (Sept 19th)

#2 Case Analysis 1 – 20% (July 9th) (Group)5 Page paper & 1 page summary for class discussion

#3 Case Analysis 2 - 20% (Oct 3rd) (Individual)5 Page paper & 1 page summary for class discussion

#4 E-Business Analysis – 25% (Nov 21st) (Group)8 Page paper & class presentation

Class Participation – 15%Discussion groups on web page and class discussion

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IntroductionsJohn Fisher

• M.S. DePaul University 1989• CIO and EVP - Smith, Bucklin and Associates (www.sba.com)• Previously CNA Insurance and Continental Bank

Phone (312) 464-6100 x3313E-mail: jfisher@cti.depaul.edu or John_Fisher@sba.comOffice Hours: 5:00 - 5:45 Wednesday room 1108Class Web Page: http://facweb.cs.depaul.edu/jfisher/EC589/COL Web Page: http://dlweb.cti.depaul.edu/auth/login.asp

2 Minute Introduction: • Name, Company, Title/Responsibilities• Web page, e-mail address• Something else about yourself• What you expect to get out of this class?

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Setting the Stage

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Evolvement of E-Commerce

BrochurewareConsumer E-Commerce (B2C)

Transaction, Personalization, Service

E-business (B2B)Internet, Intranet, and Extranet

E-Marketplace (B2B)Vertical and Horizontal

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Rise of the Internet Usage

100 million people are online in US today, up from 36 million in 1996Internet service market will grow from $1.3 billion (1997) to $57 billion by 2003.Online retailing (b2c) will grow from $ 20 billion (1999) to $188 billion in 2004.Online trade (b2b) will grow to $2.7 trillion by 2004, 53% from eMarketplace.

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The New Economy

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Driving Principles of the New Economy

Intangible matters more. Information, convenience, and time are more important than physical products. Space has vanished. Global and instant connection. Time is collapsing. Instant interactivity breeds accelerated change.People are the prime driving force. Brain power and innovativeness determines success.

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Driving Principles of the New Economy

Growth is accelerated by network.Values rise exponentially with market share.Efficiency is achieved through infomediaries. Markets are driven by consumers and buyers.Personalization defines 1:1 interaction.Ubiquity of information and services is expected.

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From eCommerce to eMarketplace

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From E-Commerce to E-Marketplace

Internet Commerce (B2C)IntranetsExtranetsE-business integrationE-Marketplace

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The Internet Value PropositionTransform customer relationship

Customer centered, self service, 1:1; choices; delivery to customer location; customer needs

Displace traditional source of values Physical vs. digital valueEconomies of scale vs economy of scopeMass produced vs mass customizedInformation vs. knowledge valueDistribution as constraints vs. enablerLocal vs. global

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B2C Business Models

Merchant Modelvirtual merchantsCatalogue merchantsClick & Brick

Advertising ModelHorizontal portalVertical portalPersonalized portal

Intermediary (Brokerage)

Buy/sell fulfillmentBuyer/demand aggregatorVirtual mallHypermediary (financial settlement)Auction brokerReverse auction

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Four Strategies

Channel MasterIntegrate the commerce value chain with existing operations; build deeper relationship with customers

Customer MagnetCommunity and knowledge sharing

Value Chain PirateDigital Distributor

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The Commerce Value Chain

Attract Act React Interact

Get and keepcustomer interest

Turn interest into orders

Manage orders Service customers

AdvertisingMarketing

channelsmedia

CatalogSales

staticdynamic

Order capture--Shopping CartPaymentFulfillmentgoods

Customer serviceOrder tracking

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Traditional Value Chain

Logistics Operation R&DMarketing

& SalesCustomer

Service

MassMarket

CustomersSuppliers

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B2B Business ModelsFirm Based

CiscoFedExUPS

Enterprise Systems (ERP):

mySAP.com • Marketplace• Workplace• E-community

marketplaces

Virtual SCMSun Data uses FedEx

Marketplaces (Intermediary)

Vertical Hubs• E-steel• Chemedx

Functional Hubs• MRO.com• BidCom

MarketmakersGEIS Viewlocity -- High volocity supply chain

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Value Chain Decomposed

Logistics

Operation R&D

Marketing& Sales

Customer Service

Logistics

Logistics

Operation

Operation R&D

R&D

Marketing& Sales

Marketing& Sales

Customer Service

Customer Service

eMarket

eMarket

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B2B E-Marketplaces

Catalog ModelAggregating suppliers and buyers between participants in the hub (Chemdex, MRO.com)

Auction ModelsSpatial matching of buyers and sellers (for one of a kind, non standard, perishable (Auction.com)

Exchange ModelsTemporal matching of supply and demand, real-

time bid-ask matching (e-Steel)

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E-Marketplaces: Networking Value Chain Logistics

Specialists

Operation

Marketing& Sales

Customer Service

eMarketPlace

Component Suppliers

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Next Class

E-Business StrategyReadings in text and Supplemental materialCome prepared to discuss the topics