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IT in Business

ElectronicCommerce andElectronic BusinessLecture 12

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What is Electronic Commerce?Definition

Electronic Commerce (e-commerce): Use ofcommunication networks, including the public

Internet, to conduct commercial transactions

between businesses or with consumers.

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Whatis Elec

tronic C

ommerce?Types of Electronic Commerce

Business-to-Consumer (B2C) E-Commerce:

Electronic commerce carried out by anenterprise in order to serve its consumer

customers.

Business-to-business (B2B) E-Commerce:

Companies doing business electronically

with other businesses.

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What is Electronic Commerce?Types of Electronic Commerce (Continued)

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What is Electronic Commerce?Types of Electronic Commerce (Continued)

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What is Electronic Commerce?Benefits of E-Commerce

Geographic Reach

Speed

Productivity

Information Sharing

New Features LowerCosts

Competitive Advantage

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What is Electronic Commerce?Benefits of E-Commerce (Continued)

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What is Electronic Commerce?Growth of E-Commerce

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What is Electronic Commerce?Growth of E-Commerce (Continued)

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Business-to-ConsumerE-Commerce ApplicationsOnline Retailing and Electronic Storefronts

Online Retailing: Shoppers visit a store over

the Internet and check out the products.

Electronic Storefront: Home page of an

online retailing business.

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Business-to-ConsumerE-Commerce ApplicationsElectronic Markets

Electronic Markets (e-markets):A collection ofindividual shops accessible through a single location

on the World Wide Web.

Auctions: Shoppers make bids to determine the saleprice of an item rather than relying on predeterminedfixed prices.

Brick and Mortar:Any physical store or building,regardless of how it is constructed or where it islocated.

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Business-to-ConsumerE-Commerce ApplicationsElectronic Markets (Continued)

ForwardAuction: Shoppers bid on a desired itemwith the knowledge that the seller will take thehighest offer.

Reverse Auction: The direct opposite of a traditionalauction. The bidders list their product or service

requirements and the maximum price they are willingto pay for it. Potential sellers who can provide thegood or service reverse bid against each other byposting their bids for buyers. The bidder offering therequested products or services at the best price wins

the bid.

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Business-to-ConsumerE-Commerce ApplicationsElectronic Markets (Continued)

Dutch Auctions: On electronic markets, the

market operator displays a high openingprice for an item and asks for buyers willing

to pay the price. At pre-specified intervals,

the price is lowered until a bidder is willing to

pay the displayed price.

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Business-to

-Co

nsum

er

E-Comm

erce Applic

atio

nsPortal

Portal:A gateway or hub site, such as Yahoo!, that provideschat rooms.

ContentAggregator:An e-commerce portal that assemblesinformation (that is, content) from a variety of sources,organizing the information into a form that is useful to visitors tothe Web site.

Infomediary:A Web site that locates, retrieves, and organizesspecialized information for potential users. The term is acomposite of information and intermediary.

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Business-to

-Co

nsum

er

E-Comm

erce Applic

atio

nsOnline Services

Electronic Banking/Cyber-banking: Customersconduct their banking activities without going to a

physical bank office. Virtual Bank:Operates exclusively over the Internet.

Personal Finance and Bill Payment Automatic Transfer of Bank Loan and Mortgage Payments

Automatic Payment of Utility Bills Online Bill Payment

Electronic Bill Presentment

Combined Electronic Bill Presentment and Payment

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Business-to

-Co

nsum

er

E-Comm

erce Applic

atio

nsOnline Services (Continued)

Securities and Investments

Travel Services

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Func

tio

ns Perform

ed by B2C E-C

ommerce Si

teCommon Functions ofB2C sites

Catalog and Content Management Content: Information distributed over the Internet.

Shopping and Checkout

Back Office Processing

BackOffice: Deals with the final steps in the sale. Processing Customer Payment

Updating Inventory Records

Preparing Item forDistribution

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Func

tio

ns Perform

ed by B2C E-C

ommerce Si

teCommon Functions ofB2C sites (Continued)

Advertising

Search Engines Banner Ads

Interactive Marketing: The use of customeradvertising prepared to fit the profile of a specificvisitor to a site. Interactive Coupon: Offered online.

E-Mail Spam: Unsolicited advertising by e-mail.

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Business-to-Business E-Commerce ApplicationsSupplyChain Management

Supply Chain Characteristics

Supply Chain: The flow of parts, components,materials, funds, and information between a

companys sources and its customers.

Supply Chain Management: The oversight of

activities interconnecting suppliers and buyers.

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Business-to-Business E-Commerce ApplicationsSupplyChain Management (Continued)

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Business-to-Business E-Commerce ApplicationsSupplyChain Management (Continued)

Supply Chain Software

Capacity Requirements Planning Demand Planning Module

Manufacturing Planning Module

Distribution Planning Module

Logistics Planning Module

Transportation Planning Module

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Business-to

-Business E-Comm

erce Applic

atio

nsSupplyChain Management (Continued)

Supply Chain Integration Strategies

Supply ChainIntegration:

The synchronization of all partiesinvolved in making a product or delivering a service in order

to meet buyer, seller, and customer needs.

Efficient Consumer Response/Continuous Replenishment:

Data and information on products are captured at the point

of sale and shared with suppliers periodically (usually daily)

so that both can work together to jointly forecast futuredemand for replenish able items, monitor trends, and detect

opportunities for new items.

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Business-to

-Business E-Comm

erce Applic

atio

nsSupplyChain Management (Continued)

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Business-to

-Business E-Comm

erce Applic

atio

nsSupplyChain Management (Continued)

Supply Chain Integration Strategies

Efficient Consumer Response/ContinuousReplenishment

Disintermediation: Name given to removing

intermediaries (like brokers and distributors) from the

supply chain.

Vendor-ManagedInventory: Companies dealdirectly with vendor, that is, manufacturers or

suppliers.

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Business-to

-Business E-Comm

erce Applic

atio

nsSupplyChain Management (Continued)

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Business-to

-Business E-Comm

erce Applic

atio

nsE-Procurement

ElectronicProcurement (e-procurement): Giveemployee access to catalogs of products and

services from multiple suppliers.

Direct Spending: To obtain materials or componentsfrom suppliers for use in the manufacture of aproduct or delivery of a service.

Indirect Spending/Maintenance, Repair, andOperations (MRO): Buys goods and services thatsupport operation of the company as a whole.

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Business-to

-Business E-Comm

erce Applic

atio

nsE-Procurement

E-ProcurementObjectives

Reducing Purchasing Costs Providing Employee Self-Service

Increasing Leverage with Suppliers

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Business-to

-Business E-Comm

erce Applic

atio

nsElectronic Exchange

Electronic Exchange/B2B hub:Commerce sites onthe Internet where buyers and sellers can come

together to shop, exchange information, or carry outtransactions to buy or sell products and services.

Public Exchange/Independent Exchange:A thirdparty the market maker operates the electronic

market, displays the markets information content,and provides electronic tools for conducting trade. Vertical Exchange: Structured to serve members of a

specific industry.

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Business-to

-Business E-Comm

erce Applic

atio

nsElectronic Exchange (Continued)

Public Exchange/Independent Exchange

Horizontal Exchange

:Seeks to simultaneously serve theinterests of companies across different industries.

Customers seek their services because of functional

expertise rather than industry expertise.

Consortia-led Exchange: Industry players combineforces to create a common forum for the exchange of

goods and services.

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Business-to

-Business E-Comm

erce Applic

atio

nsElectronic Exchange (Continued)

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Business-to

-Business E-Comm

erce Applic

atio

nsElectronic Exchange (Continued)

Private Exchange:An Internet-base trading

forum (I.e., an electronic market)implemented by a single company with a

select group of suppliers and customers.

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Business-to

-Business E-Comm

erce Applic

atio

nsElectronic Exchange (Continued)

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The End

Thank You