BITS Pilani Pilani Campus

BITS–CM–HHSM ZC471 Management Information Systems

BITS Pilani Pilani Campus

Lecture Session-6

23 – 08 – 14

BITS Pilani, Pilani Campus

• Part-I: IT in the Organization • Ch. 1 – IT supports organizational performance

in turbulent business environment

• Ch.2 – IT: Concepts, types and IT support

• Part-II: Data and IT Infrastructure • Ch.4 – Networks and collaboration as business

solutions

• Ch.5 – Securing the enterprise and business

continuity

Recap

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Part III: Web Revolution Chapter 6 E-Business and E-Commerce

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1. Describe electronic commerce, its scope, benefits, limitations, and types.

2. Explain how online auctions and bartering work.

3. Understand the major applications of business-to-consumer commerce, including service industries and the major issues faced by e-tailers.

4. Describer business-to-business applications.

5. Explain about intrabusiness and B2E

Learning Objectives

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6. Describe e-government activities and

consumer-to-consumer e-commerce.

7. Identify the e-commerce support services,

specifically payments and logistics.

8. Increasing importance and activities of

online advertising.

9. Issues relating to e-commerce.

Learning Objectives

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• Opening Case: Dell is using E-Commerce for

success

• Closer Look 6.1 – Interesting student targeted

web sites

• Closer Look 6.2 – Blogger.com – Web 2.0 Social

commerce of Google – web 2.0; 20% time; API;

• IT at work 6.1– eBay: World’s largest auction site • Pamela Ker, Omidyar – Candy dispensers – C2C: bidding – B2C –

eBay stores; eBay marketplaces

• IT at work 6.2 – Amazon.com: King of e-tailing • Jeff Bezos – books – warehouses – over 500,000 affiliate partners

IT in Practice – Snippets of Information

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• IT at work 6.3 – Victoria university uses e-

marketing • Increase conversion rate; 16% foreign students; More PG programmes

• RightNow; University’s email program; University database; Tracking of activities

• Customized messages – curriculum, housing, fin-aid, Malaysian students

• IT at work 6.4 – Chemical companies “bond” at

ChemConnect; Buy-side, sell-side & commodities

• Closer Look 6.3 – E-Money: future currency • Japan; NTT DoCoMo & EJR; Mobile Suica; 20-25% of transactions;

• End of chapter case: Stormhoek Vineyards excels

with Web 2.0 tools

IT in Practice – Snippets of Information

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• Founded in 1984; First company to offer PCs via mail order; Customized systems – shipped by direct mail

• By 1993 – top five computer makers; Competition from Compaq

• In 1994 – Dell suffered losses – $100 million

• Use of Web services

• By 1999 – top most; By 2008 – $62 billion a year – 65,000 personnel

• Now, Dell stands at 3rd place after Lenovo and HP (worldwide)

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DELL

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• B2B • Has about 100,000 business customers

• BA – Notebook and desktop computers to 25,000 BA users

• BA – Offers e-procurement services

• B2C • E-catalolgues, Shopping carts, E-gateways, Customization

• E-Collaboration • UPS, FedEx, and 15,000 service providers

• E-Customer service • Virtual desktop 24x7 and many more

• Intrabusiness EC • Use of EC technologies for internal operations

• Accenture – High performance SCM solution

DELL - E-C Applications

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Concepts:

• E-Commerce

• E-Business

• Pure E-Commerce

• Partial E-Commerce

• Brick-and-Mortar Organization

• Click-and-Mortar ↔ Click-and-Brick

6.1 Overview of E-Business and E-Commerce

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E-C Overview

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• B2B – Dell

• C-Commerce – Dell

• B2C – (e-tailing) Dell, eBay Stores

• C2C – eBay

• B2B2C – Godiva; 1926; online 1994; pioneering

“click-and-mortar” e-business

• C2B – Priceline

• G2C, G2B – Government sites

• Intrabusiness Commerce – Within organization

• Social Commerce – StormHoek Vineyard

Types of E-C Transactions

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Table 6.1 – Complete List of Models

• Affiliate Marketing – commission

• Bartering online – points

• Deep discounters – Half.com

• E-Classifieds – craiglists.com - fixed

• E marketplaces and exchanges

• E tendering system

• Find-the-best price – Hotwire.com – time

• Group purchasing (e-co-ops)

E-C Business Models

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• Information brokers and matching services

• Tullett Prebon Joins Ice E-confirm Broker

Matching Service (2010)

• Supply chain improvers

http://www.supplychainimprovers.co.uk/

• Value chain integrators - KRONOS

• Name-your-own-price – Priceline.com

• Product customization – buildtoorder.com

• Value chain service provider

E-C Models

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• Online Advertisers Targeting Students

• Company-sponsored Socially Oriented

Sites

Examples

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Application Programming Interface - Examples

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1. People

2. Public policy

3. Marketing and Advertising

4. Support services

5. Business partnerships

1st Level: Infrastructure

2nd Level: Support services (Pillars)

3rd Level: E-C Applications

Scope & Framework of E-C

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Scope & Framework of E-C

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• Benefits

• To organizations • International markets, procurement, cost, small vs. large…

• To customers • Prices, choices, faster transaction, variety, …

• To society • Travel, lower prices, location-independent, public services

• Limitations

• Technological • Standards, bandwidth, integration,…

• Non-technological • Legal issues, inter-govt. regulations, perceptions…

Benefits and Limitations of EC

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• E-Markets – virtual markets

• E-Catalogues and E-Classifieds

• E-Auctions

• Forward Auctions – sellers to buyers

• Reverse Auctions – buyer-RFQ

• Used in B2C, B2B, C2B, C2C, e-G

• Bartering and Negotiations • Non-monetary; barterbrokers.com; swaptree

6.2 IS Major EC Mechanisms

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• E-Catalogues

• E-Auctions

Examples

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• E-Classifieds

Craiglist.com

• Bartering and Negotiations

Examples

Stores

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• E-Retailing Mechanisms

• E-Storefronts

• E-Malls

• E-Tailing – many to many; customized

• Online Service Industries

• Cyberbanking – virtual banks; multiple currency

• Online Securities Trading – security

• Online Job Markets

• Travel Services

• Real Estates

6.3 Business-to-Consumer Applications

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• Phases in Customer Service Life Cycle (CSLC)

1. Requirements – Information, reviews, demos, offering of suggestions

2. Acquisition – Online order, negotiations, closing of sale & delivery

3. Ownership – On-line user groups, online technical support, renewal, subscription

4. Retirement – Disposal: online resale, classifieds

• E-entertainment

• Customization and personalization (Motorola)

Customer Service in e-commerce

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1. Resolving channel conflict

2. Resolving conflicts within click-and-mortar organizations

3. Organizing order fulfillment and logistics

4. Determining viability and risk of on-line e-tailers

5. Identifying appropriate revenue models – Dotcom model

Example: Amazon – King of E-Tailing

Issues in E-Tailing

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• Electronic Storefronts

• Electronic Malls

Examples

shopping

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• Online Job Markets

• Travel Services

Examples

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• Real Estate Online

Examples

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• Sell-side corporate marketplaces • E-catalogues and forward auctions (similar to B2C – but C is a co.)

• Buy-side corporate marketplaces

• E-procurement

• Group purchasing

• Desktop purchasing

• Public Exchanges

• Vertical exchanges for direct materials – plasticsnet.com

• Vertical exchanges for indirect materials- chemconnect.com

• Horizontal exchanges – MRO

• Functional exchanges - specific functions

6.4 B2B Applications

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• B2E – Disseminate information to employees –

intranet.

• E2E – Employees communicate with each other.

• SBU – Company owned dealerships buy goods &

services from main company. Improves internal SC

operations.

• C-Commerce – Covers all processes from planning…

• E-Government – Delivers information & services to

citizens, businesses & suppliers. i.e.: G2C, G2B, G2G.

• C2C – E-c in which both the buyer and seller are

individuals: C2C Auctions, Classifieds, Personal &

Support Services

6.5 Major Models of E-Business: From E-Government to C2C

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6.6 E-Commerce Support Services: Payment, & Order Fulfilment

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• The section discusses major modes of conducting MR online • Surveymonkey, Zoomerang, Infosurv

• Provides an overview of web advertising and strategy. • Affiliate marketing, search engine advt., Ads as commodity,

Advergaming,

• Many forms of electronic payments, electronic checks, credit cards, cash, smart cards, purchasing cards, and stored value cards. • Online banking, Biller direct, Bill consolidator

• Various forms of electronic bill presentation and payment, e-wallets, and virtual credit cards.

• Security issues arising from their use. • Authentication, integrity, nonrepudiation, privacy and safety

E-Commerce Support Services

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E-Payment Methods

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How e-credit cards work?

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• The use of a mobile phone as an e-wallet.

• Fig 6.6 Order fulfillment and the logistics system

• Activities involved in order fulfillment

E-Wallet

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• Situated in SA; annual sales in 2005 were $3

million; with web tech, it grew to $10 million in

2007 – expected to reach $30 million in 2010

• Co. devised a marketing campaign called “100

Geek Dinners in 100 days”

• Each diner was to be hosted by one person and

used for wine tasting by several dozen guests in

UK and US.

• How to get 100 people to host a wine tasting

and how to you find 40 to 60 guests for each

event? Answer: use of web 2.0 technologies

Stormhoek Vineyards excels with Web 2.0 tools

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• Activities carried out Blogging: CEO of Orbital Wines (co.’s parent co.) wrote dozens

of blog entries about the events soliciting volunteer hosts….

Wiki: each volunteer was provided with contact and location

information on a wiki. Wiki used for CRM;

Podcasts: web content feed (RSS) was used to push

information to participants

Video and Photo links: corporate blog supported vide links

Shopping: supported order placement

Mashups: an interactive map

Social networks

• Parties were attended by over 4500 people and the

publicity enabled to increase its revenues

Stormhoek Vineyards

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• Security and legal concerns

• E-C failures – common. Solid analyses a must.

• Failed initiatives within an organization.

• Success stories & learning should be shared.

• Managing resistance to change.

• Integration into business overall.

• Alliances can be very helpful & productive.

• Choosing appropriate strategy.

6.7 & 6.8 Issues in E-Business

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