Traditional commerce, E Commerce and Myths. Part-1

Transcription

1 Traditional commerce, E Commerce and Myths Part-1

2 History of E-Commerce In 1990s electronic messaging technologies became an integral part of workflow or collaborative computing systems( also called groupware) Lotus notes is a prominent example of such systems

3 History of E-Commerce In 1990s, the advent of the world wide web on the internet represents a turning point in electronic commerce by providing a technology solution to the problem of publishing. the web made electronic commerce a cheaper way of doing business and enabled more diverse business activities.

4 Technology and commerce In order to understand how technology can aid commerce we need to understand traditional commerce. Once we have identified what activities are involved in traditional commerce, we can consider how technology can improve them. Note that technology does not always improve commerce. Knowing when technology will NOT help is also useful.

5 Origins of commerce The origins of traditional commerce predate recorded history. Commerce is based on the specialization of skills. Instead of performing all services and producing all goods independently, people rely on each other for the goods and services they need. Example: My friend trades eggs to one of her neighbors in exchange for repairs to the fences on her ranch.

6 Traditional commerce Although money has replaced bartering, the basic mechanics of commerce remain the same: one member of society creates something of value that another member of society desires. Commerce is a negotiated exchange of valuable objects or services between at least two parties and includes all activities that each of the parties undertakes to complete the transaction.

7 Views of commerce Commerce can be viewed from at least two different perspectives: The buyer s viewpoint The seller s viewpoint Both perspectives will illustrate that commerce involves a number of distinct t activities, called business processes.

8 The buyer s perspective From the buyer s perspective, commerce involves the following activities: Identify a specific need Search for products or services that will satisfy the specific need Select a vendor Negotiate a purchase transaction including delivery logistics, inspection, testing, and acceptance Make payment Perform/obtain maintenance if necessary

9 The seller s s perspective From the sellers perspective, commerce involves the following activities: Conduct market research to identify customer needs Create a product or service to meet those needs Advertise and promote the product or service Negotiate a sales transaction including delivery logistics, inspection, testing, and acceptance Ship goods and invoice i the customer Receive and process customer payments Provide after sales support and maintenance

10 Business processes Business processes are the activities involved in conducting commerce. Examples include: Transferring funds Placing orders Sending invoices Shipping goods to customers

11 E-Commerce We will define e-commerce as the use of electronic data transmission to implement or enhance any business activity. Example: A buyer sends an electronic purchase order to a seller. The seller then sends an electronic invoice back to the buyer. When used appropriately, electronic transmission can save both time and money.

12 E-Commerce Definition The transformation of key business processes through the use of internet technologies- IBM E-commerce is buying and selling activities over digital media R Kalakota (1999) E-commerce is about doing business co e ce s about do g bus ess electronically- European commission (1997)

13 Myths you should know There is still a confusion on what e- commerce can or cannot do. Following are the myths to be addressed: Setting up a website is easy: True, except it is not easy to ensure performance. There are technology, networking infrastructure, and design criteria to be considered. E-Commerce means no more mass marketing: The web is first commercial channel that enables cost effective one-to-one marketing on a large scale, but a business must still market its web presence.

14 Myths you should know E-Commerce means a new economy: There is no new economy but there is something new in the real economy. E-Commerce is revolutionary: Internet technology has created a new way to shop, most rules of retailing still apply. ppy Unfortunately many Internet retailers (i-tailers) spend disproportionate amount on the revolutionary tasks of Web site construction and marketing and to little on customer support and fulfilment.

15 Myths you should know All products can be sold online using identical business model: Different products require different selling techniques and customer support. Therefore different business models depending on product.

16 Myths you should know Build it and they will come: websites have to be promoted just like any other business. The middleman is out: Intermediaries of the traditional organization delivers product to the retailer from the manufacturer or the wholesaler.

17 Impactofe-commerce commerce E-commerce is changing the way traditional commerce is conducted: Technology can help throughout the process including promotion, searching, selecting, negotiating, delivery, and support. The value chain is being reconfigured.

18 Appropriateness It is important to identify which business processes can be streamlined using e-commerce technologies. It is equally important to realize that some processes make effective use of traditional commerce and can t be improved upon using technology. Technology is not a panacea. Using it when it is not necessary or helpful can be a costly mistake.

19 Well-suited for e-commerce Business processes that are well-suited for electronic commerce: Sale/purchase of new books and CDs Online delivery of software Advertising and promotion of travel services Online tracking of shipments Online tracking of shipments The business processes that are especially wellsuited to e-commerce include commodity items, that is, a product or service that has become standardized.

20 Best for traditional commerce Business processes that are well-suited to traditional commerce: Sale/purchase of high fashion clothing Sale/purchase of perishable food products Sale of expensive jewelry and antiques In general, products that buyers prefer to touch, smell, or otherwise closely examine are difficult to sell using e-commerce.

21 Questionable cases Would e-commerce or traditional commerce work best for the following activities? Sale/purchase of rare books Browsing through new books Sale/purchase of shoes Sale/purchase of collectibles (trading cards, plates, etc.)

22 Combinations of both Some business processes can be handled well using a combination of electronic and traditional methods: Sale/purchase of automobiles Online banking Sale/purchase of investment/insurance products