E-Commerce Frameworks Prof. Sheizaf Rafaeli מהו מסחר אלקטרוני

E-Commerce FrameworksProf. Sheizaf Rafaeli

מהו מסחר אלקטרוני


מהו מסחר אלקטרוני

מסחר אלקטרוני הוא כל אינטראקציה בין גורמים

עסקיים העושה שימוש בתיווך אלקטרוני

של מחשב, טלפון, פאקס, ןכיו”ב ואינו מתבצע פנים אל-פנים בלבד

Customers BusinessSuppliers

MarketingBuying/SellingFulfillmentService


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E-Commerce Frameworks

Source: On the Road of Electronic Commerce -- a Business Value Framework, Gaining Competitive Advantage and Some Research Issues, Michael Bloch *, Yves Pigneur ** & Arie Segev, http://www.stern.nyu.edu/%7Embloch/docs/roadtoec/ec.htm#bib3


Online vs. Internet

• Open versus Closed Architecture

• Controlled versus Uncontrolled Content

• Metered versus Flat Pricing Schemes

• Innovation versus Control


מערך המסחר האלקטרוני


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מסגרות לניתוח וחוקיםFrameworks

• What is Telecomm? chronological development of technology

• Client/Server Computing• Packet Switching• What is E-Commerce: Three definitions• Some Rules:

MooreMetcalfeCoaseDisruption

• Why Electronic Commerce?The Paradigm Shift, take #1


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What is Telecommunications?

Input Information Input

Signal

Transmitted Signal

Received Signal

Output Signal

Output Information

Input DeviceInput Device

CommunicationsChannel

CommunicationsChannel

ReceiverReceiverOutputDeviceOutputDeviceAgent AgentTransmitterTransmitter

Source System Destination System


Types of Connections

GlobalInternet

ISPPSTN

Channel

9.6-28.8 Kbps

Modem

DialupTerminal orSLIP/PPP

GlobalInternet

ISPISDNRouter

CustomerEnterpriseNetwork

ISDNChannel

64 Kbps

Integrated ServicesDigital Network (ISDN)

GlobalInternet

ISP RouterCustomerEnterpriseNetwork

LeasedCircuit

56 Kpbs1.544 (T1)

Leased LinesT1 or T3AND ON…

TOWARD ...BROADBAND


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מריכוז לפיזור, ומשם לביזור ועד ללקוח/שרתChronological development

• Standalone Mainframe• Timesharing, Multiprogramming: Dumb

terminal• Invention of Minicomputer, then Personal

computer: Decentralization, then distributed computing

• Emergence of Client / Server model


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ISP as mediator?


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המודל של לקוח ושרתCLIENT / SERVER MODEL

SPLITS PROCESSING• CLIENT• SERVER

*


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Client Server : לקוח שרת


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CLIENT / SERVER MODEL


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CLIENT לקוח

• USER POINT - OF - ENTRY• COMPUTER / WORKSTATION / LAPTOP• USER INTERACTS WITH CLIENT• THRU GRAPHICAL USER INTERFACE

(GUI)• ENTER & RETRIEVE DATA• ANALYZE & REPORT

*


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SERVER שרת

• COMPUTER SATISFIES USER’S NEEDS• NOT VISIBLE TO USER• PROCESSING• ACCESS TO DATABASES

*


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Networks allow client/server computing

Can distribute functions among machines Editing data fields Error checking Help screens Calculations Query processing

Terminal Host Display Host Client Server PC File server Stand-alone PC

Client Server


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TYPES OF CLIENT/SERVER COMPUTING

• Distributed Presentation• Remote Presentation• Distributed Logic• Remote Data Management• Distributed Database

*

•CGI

•Javascript

•Java

•Jini

•Shockwave

•Realaudio


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מיתוג מנותCircuit vs. Packet Switching

• CIRCUIT• Continuous

Transmission:• stream• dedicated circuit• role and power of the

switch

• PACKET• Intermittent

Transmission• bursty• no center• store and forward

Traceroute (tracert)

Ping

other network management tools


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Packets : מנות


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IP


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IPv6 -- IPng

IPv6 is short for Internet Protocol, version 6. IPv6 is a new system, currently under development, to be used for assigning Internet Protocol addresses in the future. IPv6 will eventually replace the current IP addressing system, known as IPv4.

IPv6 will make use of 128-bit long IP addresses. In this scheme, an IP address will consist of eight sections, each containing a 16-bit value. The number of IP addresses that this creates is equal to the IPv4 address space squared, twice. IPv6 is being designed to allow for future growth of networking technologies and expansion of the Internet.


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What is Electronic Commerce

• Is it electronic mail?

• Is it electronic data interchange (EDI)?

• Is it video on demand?

• Is it home shopping?

• Is it home banking? Or online personal financial information management?

• Is it electronic publishing?

• Is it interactive advertising and marketing?

• Is it a new methodology that shows how to implement re-engineering and total quality?

• Answer: ????????: THREE DEFINITIONS


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What is Electronic Commerce?

First Definition: (Transaction-Orientation)Ability to perform business transactions on a variety of networks--Internet, cable TV, wireless, Telcos.

Seller:- Digital Data

&Documents

- Multimedia Content

- Programs

- Collateral Information

Seller:- Digital Data

&Documents


- Programs


Online

Transactions

Consumer:

- DigitalProducts

- Services

- Information

Consumer:

- DigitalProducts

- Services

- Information

Payment Flow

Information Flow


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Second Definition: (Business to Business Transaction-Orientation)

Organization:- Purchase Orders

- Inventory Info.

- Production Schedules

- Product Info.



- Inventory Info.


- Product Info.


Online

Transactions


- Inventory Info.


- Product Info.



- Inventory Info.


- Product Info.


Settlement

Information Flow


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Third Definition: (Production-Orientation)The online process of converting digital inputs into value-added outputs

Producers:- Digital Data

&Documents



- Customer Participation

Producers:- Digital Data

&Documents



- Customer Participation

Online

Production

Process

Consumers:- Digital

Products

- Services

- Processed order

Consumers:- Digital

Products

- Services

- Processed order

Intermediaries


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Definition of Electronic Commerce

Electronic Commerce is any “interaction” between an enterprise and a consumer or business partner, that is processed or facilitated electronically, regardless if it is by voice, IVR, fax or online (data).

Customers BusinessSuppliers

MarketingBuying/SellingFulfillmentService


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Three Faces of ECInternet, Intranet and Extranet

• Internal E-mail

• Order processing

• Enterprise communications

• Employee Handbooks

• Workflow Automation

• Procurement (POs)

• Pricing Info.

• Marketing documents

• Product Manuals

• Product/company Info

• External e-mail

• Place order

• Research

• Advertising

• Outbound marketing

• Catalogs

• Order Placement

Productivity enhancement Productivity enhancement

RevenueEnhancers

Order TrackingOrder Fulfilment

Customer SupportTransactions

Suppliers


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Some Rules

• “Rules” seem to be the rule, lately:Kelly, Varian, others:

• Information Rules : A Strategic Guide to the Network Economy by Carl Shapiro, Hal R. Varian

• New Rules for the New Economy : 10 Radical Strategies for a Connected World by Kevin Kelly


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Killer Apps Rules

• Unleashing the Killer App : Digital Strategies for Market Dominance by Larry Downes, Chunka Mui, Nicholas Negroponte


30E-Commerce, S. Rafaeli

אלקטרוני מסחרחוקים?

מור חוק Moore’s LawEvery eighteen months, processing power

doubles while cost holds constant

יציבות בעלויות חודש 18 כל מוכפל המחשבי העיבוד כושר

שנים

הטרנזיסטורים מספר אחד שבב גבי על

לוגאריתמי ציר


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Moore’s Law

• Gordon Moore, founder of Intel

• Every eighteen months, processing power doubles while cost holds constant.

• Every eighteen months, you can get twice as much power for the same price, or the same power for half the cost

• Imagine Henry Ford predicting that the internal combustion engine would double its power every year and a half without becoming any more expensive. By now we'd be driving cars that could take us to the moon for lunch. The engines in these vehicles would be given away with the purchase of a Big Mac.




מטקף חוק Metcalfe’s LawThe utility (usefulness) of a network equals

the square of the number of users

בה החברים מספר כריבוע מוגדרת רשת של התועלת

מספרברשת החברים

התועלת הנובעת

הרשת מן


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Metcalfe’ Law

• Founder of 3Com Corporation, Inventor of Ethernet, Loser in famous bet

• The utility of a network equals the square of the number of users

• The more people your network the more valuable it becomes

• More new users increase both utility and speed of adoption

• If you and I can call only each other, to return to the telephone example, a phone is of little value. But if we can call nearly everyone else in the world, it becomes irresistible.




Coase’s Law Where do firms come from? פירמות נוצרות איך

What sets their size? גודלן את קובע מה

Transaction costs, friction

Firm size is a function of the cost of external transactions, ie. a

reverse function of the amount of friction

ביחס נמצאות כלומר, התנועות עלויות של פונקציה הוא ארגונים של הגודל

החיכוך לכמות הפוך


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Coase’s Law

• Why do business executives now see technology as their main competitor instead of their chief weapon?

• Firms are created because the additional cost of organizing and maintaining them is cheaper than the transaction costs involved when individuals conduct business with each other using the market.

• As transaction costs in the open market approach zero, so does the size of the firm.




Coase’s Law Coase’s Law

פעולהבסניףהבנק

ביצוע הפעולהבטלפון

בכספומט

באינטרנט

$1.07

&0.68

$0.27

$0.10

Average Cost Per Transactionin Retail Banking

Average Cost Per Transactionin Retail Banking


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“The Law of Disruption”, or: Negroponte’s maxim

• Bits replacing Atoms. Becoming Digital.

• Social, political, and economic systems change incrementally, but technology changes exponentially.

• Technological Determinism?Second order effects

• A combination of Metcalfe and Moore’s laws




נגרופונטה חוקי Negroponte’s Laws

Being digital דיגיטאלי להיות

From Atoms to Bits לביטים מאטומים

The Law of Disruption הבלאגן חוק

Negroponte’s Switch הנגרופונטיאני המהפך


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Why companies do E-commerce: – more revenues

– lower operating costs

– lower capital costs (e.g., branch reduction in banking)

Why consumers do e-commerce:– lower prices for existing products

– more convenience via new products

– better service through self-service

Why Electronic Commerce?

Don’t think Zero-Sum. Think Win-Win or Complements


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Why are Firms Interested in Electronic Commerce?

Focus on Revenue: Profit = Revenue - Costs

• create new markets for existing off-line products

• Create new applications for existing markets

• create new products for the online environment

• Improve the quality of existing products (e.g., use customer service to attract, serve, and keep customers)

The Web and External Internet are the focus here


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Why are Firms Interested in Electronic Commerce?

Focus on Cost: Profit = Revenue - Costs

• Reduce of cost of delivering existing product/services

• To facilitate easier collaboration and information exchange

• To improve decision making by standardizing information flow

• To coordinate business processes or workflows

The Web and Internal Internet (Intranets) are the focus here


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Business Need: Create New markets , Distribution, and Sales Channels

• How to use cheap global advertising effectively?– New model: Advertiser does not pay! Interaction tools, logs

• How to target and reach a vast number of customers effectively?

– Segment the online audience Access logs, recommender systems

• How to interact with the customer effectively?– Are Web forms the best method? CGI?

How to track and measure customer interaction?– Are “hits” really useful? Access logs, “reach”


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Business Need: Create New Products for the Online Environment

• New Information-based productsMicropayments

– Electronic Newspapers (e.g., ClariNet ),

– Online databases (e.g., SEC’s EDGAR)

• New Information-based Services – Payment Brokers (e.g., First Virtual),

– Food Retailing Brokerages ( e.g., Peapod)

• New industry categories – Edutainment = Entertainment + Education (e.g. Disney Online) … and now:

“SHOPTAINMENT”

– On-demand Services (e.g., news on demand)


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Business Need: Improve Customer Service and Support

• Customer service via Telecom Call Centers is information intensive and very expensive

• Customer service follows the 20-80 rule, i.e., 20% of customers take 80% of the time

• Customization and flexibility are making customer service more difficult and challenging

Possible solutions: Integrating call-centers with the Web to augment delivery channels

– Electronic publishing with database access (e.g., FedEx)

– Internal call-centers: Automated help-desks staffed by software agents


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Business Need: Coordinate Business Processes or Workflows

Electronic Data Interchange

(Procurement)

OutsourcingMarketing&

Sales

CorporateCommunications

Team-basedEnterprises

Customer Service & Support

Intranet Enabled Process Coordination

FinanacialManagementOperations


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Intra-Net Need: Improve Decision Making in Time-constrained Operations

• Sales Force Automation

• Problem solving and firefighting

Tactical or Competitive Decisions

Strategic Goals/Objectives

Operational Actions

Planning Decisions

Database marketing

Supply-chain

Management

Few Standard Solutions. See Baan, PeopleSoft, SAP R/3. Very Expensive!!!


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The Paradigm Shift:Reduce Cost, Improve Service in Order Management

Customer Sales and Service History Database

Information Database

InventorySystems

Order Processing

Order Processing

800 Mail

COMPLETE THE TRANSACTION

(Customer-Defined Access)

EMERGINGEMERGING

Fax On-line

The Web/Online Services

DeliverySystemsDeliverySystems

800 Mail

CURRENTCURRENT

(Company-Defined Access)

COMPLETETHE CALL


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Shared Market Data

Virtual Shelf

CollaborativeSystems

ManufacturerManufacturerCustomerCustomer RetailerRetailer SupplierSupplier800

The Web

ENTERPRISE FOCUS

PARTNER FOCUS

CUSTOMER FOCUS

ManufacturerManufacturerCustomerCustomer RetailerRetailer SupplierSupplier

ManufacturerManufacturerCustomerCustomer SupplierSupplier

EMERGINGEMERGING

NEAR TERMNEAR TERM

CURRENTCURRENT

800

Fax

On-line

The Paradigm Shift:Reduce Time-to-Market in Supply Chain Management


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Summary

• The Telecomm Convergence• Client/Server Computing• Packet Switching• Definitions of E-Commerce• Some Rules:

Moore Metcalfe

CoaseNegroponte, Disruption

• Why Electronic Commerce?The Paradigm Shifts