Overview. E-business. What is e-commerce. The difference between E-commerce and E-business. Why IT is not enough

Transcription

1 Overview E-commerce / E-business current developments and future directions Dr, Brunel University anastasia.papazafeiropoulou@brunel.ac.uk 3 Dec 2004 Introduction to E-commerce Technological infrastructure Business issues Social issues The future C A S E S T U D I E S What is e-commerce Digitally enabled commercial transactions between and among organisations and individuals The automation of commercial transactions using computer and communication technologies Communications perspective: The delivery of goods, services, information or payments over computer networks Business perspective: The application of technology toward the automation of business transactions Service perspective: A tool that addresses the desire of firms, consumers and management to cut service costs while improving the quality of ggods and increasing speed of service delivery E-business E-business refers to a broader definition of e-commerce, not just the buying and selling of goods and services, but also servicing customers, collaborating with business partners, and conducting electronic transactions within an organisation E-business is all about time cycle, speed, globalisation, enhanced productivity, reaching new customers, and sharing knowledge across institutions for competitive advantage Lou Gerstner, CEO IBM E-business is the digital enablement of transactions and processes within a firm, involving information systems under its control Why IT is not enough The difference between E-commerce and E-business 1

2 Unique features of E-commerce Growth of web content Ubiquity: Internet is available everywhere Global reach: Reach across national boundaries, around the globe Universal standards: Internet standards (e.g.tcp/ip, HTML, XML) Richness: Use of video, audio Interactivity: High interaction with the user Information density: Reduced information cost increased quality Personalisation/customisation: Customisation of products and services based on individual characteristics Electronic commerce history 1970 s : Electronic Funds Transfer Late 70 s - Early 80 s : EDI - Electronic Mail Late 80 s - Early 90 s : Groupware 1990 s : World Wide Web 2000: E-business vs E-commerce Dot.com failures E-commerce failures Main reasons for failure: 1. Bad customer service 2. Inadequate order fulfillment 3. Use of primitive search and transaction tools 4.Failure to globalize 5.Building community rather than clientele 6.Insufficient budgets 7.Channel conflict Major types of e-commerce Case study B2C: Business to consumer (Amazon.com) B2B: Business to Business (esteel.com) C2C: Consumer to Consumer (ebay.com) P2C: Peer to peer (napster.com) B2P: Business to public administration (inlandrevenue.gov.uk) C2P: Consumer to public administration (dvla.gov.uk) Kazaa.com 2

3 Kazaa.com 65 million users worldwide The largest and most successful free music file swapping sit in Internet history Servers in Denmark, software development team in Estonia, headquarters in Vanatu and a domain registration in Australia Lawsuits for massive violation of copyright Following of Napster s close-down in 2002 Based on a technology that does not require a central index of titles Main revenues from advertisement April 2003 the US district court ruled that Kazaa could not be held liable for copyright infringement as they could not control how peole use the software Kazza case study questions In which type of e-commerce categories Kazza fall? Is the record label industry justified in attempting to shut Kazza down? Do you agree with the courts decision for Kazza? Do you believe there is future for Kazaa? E-commerce technical infrastructure Packet switching. A method of slicing digital messages into packets, sending them along different communication paths and then reassembling them once they arrive at their destination TCP/IP (Transmission Control Protocol/Internet Protocol): Protocol that establishes the connections among sending and receiving web computers and handles the assembly of packages IP address: Internet addresses expressed as 32-bit numbers that appear as a series of four separate numbers marked off by dots ( ) E-commerce technical infrastructure Domain name: IP addresses expressed in natural language URL (Uniform resource locator): The address used by the web browser to identify the location of content on the web Client/server computing: A model of computing in which personal computers are connected in a network with one ore more servers Client: Personal computer capable of displaying rich graphics and sound and storing files Server: Networked computer dedicated to common functions that the clients need such as storing files, applications, connections, printers Schematic of the Internet BACKBONE To Florida Router Dial Up Users Virginia T3 Alternet Backbone Larger Smaller Router Local ISP Local ISP Dial Up Users T1 T3 BACKBONE CONNECTION ISDN Business T1 Local Provider MCI Smaller Dial Up Router Local ISP Users Remote Office Chicago ISDN Business ISDN To Oregon To Boston Anycity USA 3

4 Internet-Extranets-Intranets Security issues Intranet Authentication. Verifying that an entity is who they claim to be Databases Firewall Extranet Network Authorisation. Giving access to information to the right person Auditing. Collecting information about users behaviour Internet Privacy. Protection of data against unauthorised people Busines partner s Integrity. Protecting data from being altered or destroyed Intranet Extranet Network Availability. Possibility to gain access to pages, data, services Databases Firewall Non-repudiation. Protection from parties refuting a transaction Electronic payments Credit cards Credit cards SET (Secure Electronic Transaction) Digital wallets Digital cash (First Virtual, DigiCash (e-cash), Millicent Smart cards Credit cards +SET 4

5 Case study Priceline.com Priceline.com Reverse-auction pricing system Name your own price business model A new way of pricing products and services Consumers can bid for travel, hotels rental cars and home financing In 2002 they sold 2.9 million airline tickets, 4.1 million hotel room nights and 2.8 million rental car days In 2001 had losses of $15 million and in 2002 $23 million The competition in the market is tremendous Priceline case study questions What is new is priceline s business model? Can Priceline survive or even succeed? Has priceline impacted the travel sector? Do you know the latest developments? B2B e-commerce. Benefits for business Low administrative costs The need for integration Lower search costs for buyers Reduce inventory cost Lower transaction costs by eliminating paper-work Increase production flexibility (Just-in-time) Improve quality of products by increasing cooperation among buyers and sellers 5

6 E-business integration Intermediation-Disintermediation Supply chain management (SCM) Enterprise Resource Planning (ERP) Customer relationship managemnet (CRM) Web services Intermediation / Disintermediation Book Publisher Wholesheller Discuss: Will online bookstores have a negative effect on city life by wiping out most smaller bookshops? Bookshop Social issues Social issues Information rights. Privacy, profiling, CRM systems, Informed consent Property rights. Intellectual property rights, copyright, patents, trademarks, cyberpiracy Governance. Can the Internet be controlled? Public government and law, taxation, e-policies Public safety and welfare. Protecting children, on line gambling, digital divide Social issues Case study Microsoft and its monopoly 6

7 Microsoft Dominance of the computer industry, including PC operating systems and browsers and now media players, handheld computer operating systems, cell phone operating systems, enterprise servers, content, business services 93% share of the PC client operating system market 44% (vs Linux 26%) of the corporate server market 95% share of the office productivity market (Microsoft office) 85% of the Internet browser market Dominance of Media Player 9 Microsoft-AOL The two dancing elephants Social effects of monopolies: drive competitors out of business, raise prices Microsoft case study questions Do you believe that the US courts decision to break Microsoft onto smaller companies solves the monopoly problem? What can be the arguments pro and against the use of Microsoft products at home and business environments? The future of e-commerce Broadband M-commerce Wireless technology Location based commerce Who should ensure that abuses do not occur as Microsoft s strategy unfolds in the future? Just the tip of the iceberg! UK Korea USA EU 7

8 Reading material Books Laudon, K.C., Traver, C.G. (2003) E-commerce: business, technology, society 2 nd edition, Boston, Addison Wesley. Turban, E. (2002) Electronic Commerce 2002, A managerial perspective, New Jersey, Pearson Education. Westland, J.C, Clark, H.K. (2000), Global electronic commerce. Theory and case studies, Cambridge, MA, The MIT Press Journals Electronic Business Electronic commerce Electronic commerce research Electronic commerce research and application Electronic markets Food for thought Imagine that you were asked to develop an innovative idea for an new web site. What you could come up with? 8