E-commerce content in business school curriculum: opportunities and challenges

Internet and Higher Education 3 2000) 153±160 E-commerce content in business school curriculum: opportunities and challenges Ravindra Krovi, B.S. Vijayaraman* Department of Management, College of Business Administration, University of Akron, Akron, OH 44325-4801, USA Received 21 February 2001; received in revised form 12 March 2001; accepted 26 March 2001 Abstract The Internet is providing organizations with new ways of competing in their respective marketplaces. Transacting business on the Internet Ð now commonly referred to as e-commerce Ð is creating significant changes in many industries. In many ways, the Internet is considered to be similar to other inventions such as the telephone and the printing press in terms of its impact on the global economy. This explosion of e-commerce activity has created a new problem for educational institutions. More specifically, how can business schools meet the demand for Internet savvy graduates in the new economy? This paper explores the opportunities and challenges of introducing e-commerce concepts in business school curriculum. D 2001 Elsevier Science Inc. All rights reserved. Keywords: E-commerce; E-business; Business curriculum; Knowledge components 1. Introduction During the last decade, there has been a revolution going on in the way organizations are implementing information technology IT). Today, organizational information systems have become more of a necessity in that computer networks are becoming as critical as lighting, heat, and water. The Internet is rapidly becoming the technology of choice for e-commerce because it offers a cost-effective way to link with other companies or customer. The last few years have witnessed the emergence of two basic models of organizational linkages: business- * Corresponding author. Tel.: +1-330-972-5442; fax: +1-330-972-6588. E-mail address: vijay@uakron.edu B.S. Vijayaraman). 1096-7516/00/$ ± see front matter D 2001 Elsevier Science Inc. All rights reserved. PII: S1096-7516 01)00030-6

154 R. Krovi, B.S. Vijayaraman / Internet and Higher Education 3 2000) 153±160 to-consumer commerce and business-to-business commerce. Business-to-consumer e-commerce is the delivery of information, products, services, or payment over the Internet. Because of its reach, the Internet has enabled companies to buy, sell, and provide product support and services to customers in new and emerging markets. The Internet has also opened up new avenues for expediting and managing the flow of information between organizations. This is referred to as business-to-business e-commerce. As a result, organizations are developing and implementing new business models where suppliers and customers are linked directly. The Internet-based economy generated an estimated US$830 billion in US revenue in 2000 Temple-Raston, 2001), and worldwide e-commerce revenue is projected to be US$8.5 trillion by 2005 Gartner group, 2001). Interest in e-commerce has been fueled by the interaction of economic and technology forces. These forces are influencing businesses to reposition themselves to take advantage of new opportunities created by the Internet and e-commerce. These opportunities include the creation of new service delivery channels, development of new markets, and the development of new information-based products Kalakota, Robinson, & Tapscott, 1999). Businesses are now attracted to the Internet because of the potential for reduced transaction costs, low cost customer service alternatives, and enhanced organizational coordination. E-commerce is becoming an increasingly important tool for businesses to differentiate the market. Because of the Internet, new types of products, new markets, new marketing and pricing strategies, and new players are emerging. Although the Internet and e-commerce offers new opportunities, it also presents challenges to managers due to the fact that it is still relatively new and requires careful management to exploit the new technology. To a certain extent, the e-commerce industry is going through a transition process of validating business models. The successful companies are able to sustain market volatility and customer demand fluctuations. A recent report from Forrester Research 2001) has predicted the demise of 90% of e-tailers. As is also evident from the recent turbulence in the financial markets, it is no longer just enough to have an innovative business model. Revenue models also have to be sustained by sound business strategies of customer attraction, retention, and service. Hence, managers should be prepared to make necessary organizational changes and maintain control over the process in this new economy. The IT industry has witnessed rapid and, in some cases, revolutionary changes during the last 10 years. In this rapidly changing technology environment, it is critical that business schools keep their curriculum relevant and current on an ongoing basis. However, the academic community has been traditionally slow in providing the required skills for their graduates. An important question to be addressed by business schools is: What kind of knowledge, skills, and abilities does a business graduate require to deal with the major trends that are taking place in e-commerce? Today's business graduates are required to have more than a mere surface level knowledge of e-commerce. This requires business students to understand the underlying technology, its capabilities, benefits, and limitations. In other words, it is crucial for students to also understand the impact of e-commerce technology and related strategies on the new and emerging online market. How are business schools responding to the challenges posed by the Internet and e-commerce? According to American Assembly of Collegiate Schools of Business AACSB), as of February 2001, 15 schools have

R. Krovi, B.S. Vijayaraman / Internet and Higher Education 3 2000) 153±160 155 implemented master's degree program in e-business, 39 schools have master's degree with concentration in e-business, 17 schools have certificate program in e-business, and 7 schools have undergraduate business program in e-business http://www.aacsb.edu/e-business). The demand for these programs seems to be on the rise Brin, 1999). A majority of business schools are offering one or two courses in e-commerce. Even though the response to e- commerce has been much faster than similar responses to ethics and international business, the slow response by business schools in adapting to changes in IS/IT has created a mismatch between business needs and business curriculum. Any lack of understanding of the revolution in IS/IT will result in ineffective business education. In this paper, we will identify some of the opportunities and challenges of introducing e-commerce concepts into business school curriculum. The following sections provide a framework for introducing e-commerce concepts into business school curriculum. This is done by delineating the knowledge components of e- commerce. Challenges to implementing e-commerce into the curriculum are also discussed. 2. Knowledge components of e-commerce E-commerce storefronts can be very sophisticated with features like database connectivity and integration with existing Enterprise Resource Planning ERP) and legacy systems. On the other hand, the initiation and setup of an e-commerce store can also be as simple as setting up a website using simple desktop tools such as Front Page or by using portal based hosting at sites such as Yahoo and GeoCities. Unfortunately, the mentality of ``If you build it, they will come!'' is not necessarily true assuming therefore that customers will buy the product). The success of e-commerce sites depends to a large extent on detailed business analyses and a careful consideration of issues, some of which are not necessarily technology based. From the perspective of business education, it is crucial for undergraduate and graduate business students to not only understand some of the key e-commerce technologies, but also study the factors that define the successful implementations. This may be done through case studies and several realworld examples, which might shed some light on the impact of e-commerce in terms of new opportunities, new customers, and so on. Curriculum designers in business schools have faced a similar situation in the recent past while trying to introduce new relevant topics in the areas of international business, ethics, and computer fundamentals. These additions have been motivated to some extent by AACSB related pressures as well as partially due to industry requirements. Whether or not the AACSB joins the bandwagon by recommending the inclusion of e-commerce in the curriculum remains to be seen. However, e-commerce is different from areas such as ethics and international business in that it has a core technical content or knowledge base that has to be assimilated in order to fully understand or exploit the potential of that technology. On the other hand, e-commerce is also unlike any other technology in that its applications encompass all aspects of information systems. The Web technologies that drive these e-commerce applications could include database and communications considerations. For example, commerce sites, which have realtime catalog updates and automated order processing systems, would require sophisticated

156 R. Krovi, B.S. Vijayaraman / Internet and Higher Education 3 2000) 153±160 interfaces with the inventory and fulfillment functions. An online trading system could require database transaction processing considerations. While it is unnecessary to require an understanding of the actual technical concepts that might drive these technologies, entrepreneurs and business managers must nevertheless be cognizant of some of the issues involved. For example, terminology such as ``modem to customer'' ratio becomes very relevant for online trading commerce sites. This thinking is illustrated in Fig. 1, a framework separating the core knowledge from functional area knowledge and technology skills. In other words, there might be fundamental knowledge or a minimal skill set that every student must be aware of before looking at specific implementations and issues in their individual domains or functional areas. For example, a marketing major has to understand terms such as sessions, cookies, agents, and so on before learning advertising related issues such as cost per impression measurement. The knowledge base components of the core technology, relevant functional areas, and Web-based development are outlined in Table 1. Wherever possible, topical areas are also included in parentheses. It should be noted that these are broad areas from which multiple courses can be derived. For example, the MIS umbrella is broad enough to include courses related to Web-based application development, e-commerce technologies and infrastructures, e-business integration, etc. Similarly, the marketing area can be divided into two courses: Advertising and Promotion, and Distribution Channels. It should also be noted that topics such as security considerations are covered in the Core area, as well as in the MIS area. The Fig. 1. An e-commerce framework for business curriculum.

R. Krovi, B.S. Vijayaraman / Internet and Higher Education 3 2000) 153±160 157 difference is that, in MIS, the content is more detailed and technical. For example, while students are made aware of what is a firewall in the Core course, the MIS course would cover specific firewall mechanisms such as proxy server and packet filtering. Hence, it is critical to impart core e-commerce knowledge and fundamentals prior to addressing individual domain based issues. This can be done in two ways. One approach is to include an e-commerce fundamentals chapter in the core Management Information Systems course. The other approach is to include a separate component in e-commerce in individual functional areas. For example, this could include a chapter on Internet Marketing in a Marketing Principles course. In either case, it is very likely that before long, colleges and universities will be incorporating e-commerce in their curricula by using a combination of the above approaches. Indeed, as stated before, some schools have taken the lead in introducing e-commerce to the extent of offering graduate programs in e-commerce. Whether these efforts will become models for future offerings remains to be seen. However, it is very clear that a failure to introduce e-commerce in some form or fashion will result eventually in producing graduates who will be lost in an era where online technologies will eventually become a part of every day life. This itself might be a competitive threat to business schools in general and more specifically to IS departments for failing to take advantage of the current demand for expertise in Web-based application development. 3. Challenges for b-schools While the idea of introducing e-commerce into the business curriculum is appealing, there are some challenges that have to be overcome. These range from faculty training to incentives for course preparation. At present, there are only a few functional area textbooks that specifically address e- commerce concepts. For example, Ward Hanson 2000) has written a book specifically designed for Internet marketing. However, at the time of writing, there are no Business Strategy textbooks known to authors), which specifically cover, or address, some of the e- commerce issues raised in the previous section. The exception to this is Management Information Systems textbooks, which usually appear to devote an entire chapter or two to e-commerce O'Brien, 1999). Recently, there have also been e-commerce casebooks that cover e-commerce issues Huff, Wade, Parent, & Schneberger, 1999). A bigger problem with e-commerce in particular is that textbooks and case materials are not current for very long. This is because the companies that have been featured as examples might not even be in existence at the time of publication or shortly thereafter. The faculty have the additional burden of supplementing textbooks with additional materials from trade magazines such as Internet World), guest speakers from industry, and information sources on the web such as CIO.com and ISOWORLD.org). Integrating e-commerce into business courses also requires a departure from traditional thinking, which reflects strategies better suited for the so-called ``brick and mortar'' companies. Hence, introducing e-commerce in the functional areas outlined in the previous section would require more initiative from the faculty. This brings up the issue of training and motivation.

158 R. Krovi, B.S. Vijayaraman / Internet and Higher Education 3 2000) 153±160 Table 1 Knowledge related to e-commerce by functional specialization Core knowledge Business strategy Marketing Operations management Legal processes Potential of the internet ability to reach new customers, reduced distribution costs, etc.) Network concepts modems, modem speeds, Intranets, Extranets) Internet concepts modems, ISPs, T-1 connections, browsers, Web servers, URLs) Finding information on the web search engines, portals, agents, Push technologies) Structure of the Internet/telecommunications industry E-commerce variations and business models Content development and manipulation options language types, Scripts, Applets, tools) Security considerations Firewalls, SSL, digital certificates, payment systems) Privacy, ethical, and legal considerations cookies, spamming, intellectual copyright) E-commerce business models information brokers, virtual storefronts) Alignment of e-commerce with overall competitive strategy Effect of extranets on strategic relationships between the organization and suppliers Extent of the threat of online sellers to traditional retailers Development of business plan for potential internet startup Identify products that are better suited for selling online Competitive analysis of the Internet industry e.g., impact of AOL±Netscape± Sun merger) Change management Challenge of how to address customer needs and build relationships. Standardization of products and services Customization of products and services Effect of online sales on traditional distribution channels and partners Importance of domain name Collecting customer and product interest data Characterize the profile of online shoppers and product buyers Advertising options banners, e-mail newsletters, listings on search engines) Promotion options frequent visitor/buyer programs, freebies, coupons) Assessing site and product interest page views, impressions, clicks) Selecting a mix of online and traditional advertising Applying value chain models to e-commerce activities Order processing activities Customer payment systems Order fulfillment systems Ensuring round the clock operations Impact of EDI like technology on the Internet to connect more efficiently to suppliers. Jurisdiction effects on tax rules and computations local, state, federal, international) Protection of intellectual property for information brokers Implications of providing links without explicit permission Liability issues in the event of server downtimes continued on next page)

R. Krovi, B.S. Vijayaraman / Internet and Higher Education 3 2000) 153±160 159 Table 1 continued) International business Management information systems Potential privacy violations when tapping user profiles from cookie files. Liability concerns due to security lapses Provision, feasibility, and effectiveness of digital contracts for auction sites. Designing content sensitive to international customers Language customization issues Familiarity with privacy laws in other countries Viability of encryption technology usage Payment forms and currency conversions Country specific regulations Cultural impact E-commerce functional architectures Web-based development life cycle Assessment of development costs User interface principles Development modes and tools CGI programming, Java, Active-X, Server Side Scripting) Web-based 4GL tools Security mechanisms Commerce specific tools Interface connections COM, CORBA) Outsourcing options Database and transaction processing issues Links to inventory and fulfillment systems Issues in customizing to international customers Functional area faculty might themselves not be familiar and knowledgeable in Internet and other IT subjects. Hence, it is quite possible that they may not possess the requisite knowledge needed to teach e-commerce issues in their areas. In many schools, this is also due to lack of resources where the latest technology and training options are usually given first to the MIS faculty. The problem of training also pertains to MIS faculty members who have to update themselves about the latest IT. In some cases, it is possible that students might be more familiar with the tools and technology than the faculty. While faculty are familiar with business-toconsumer commerce issues, very few have had any exposure or training in teaching businessto-business commerce issues. Hence, faculty face the additional problem of striking a balance between business-to-consumer commerce and business-to-business content. Knowledge in e- commerce can be nurtured and enhanced through activities such as team teaching with industry experts and faculty internships in dot com companies. In this regard, funding and other forms of support are crucial. It is not entirely clear whether college administrators will be willing to invest resources in technology and training to upgrade their faculty skills in IT. Ideally, there should also be incentives for faculty to develop cases related to e-commerce applications. Incentives should also be provided to faculty to self teach or seek training to educate themselves. These incentives could include cash rewards or more weightage in the tenure and promotion process. Another possible incentive would be to provide release time or summer support for course development.

160 R. Krovi, B.S. Vijayaraman / Internet and Higher Education 3 2000) 153±160 4. Conclusions E-commerce is a technology that will have a tremendous impact on consumers and the business community. It is therefore important and vital to consider incorporating e-commerce into the mainstream business curriculum. This paper presented a framework outlining e- commerce as an area that is mutidimensional. These dimensions are drawn from both the technology and the business components of e-commerce. Based on this framework, specific issues related to e-commerce in each functional area have been outlined. Further, we have also discussed the challenges and constraints that could arise from efforts to introduce e- commerce in the curriculum. College administrators including deans and chairpersons need to be made aware of the impact of e-commerce in the business world and, consequently, the importance of addressing these issues in the curriculum. It is important for administrators to identify and encourage early adopters in electronic commerce. Failure to do so could result in a business program that is outdated and not marketable, thereby eventually leading to enrollment decreases. References Brin, D. W. 1999). More b-schools offer e-commerce programs. Wall Street Journal Interactive Edition. Available at: http://public.wsj.com/careers/resources/documents/19990816-brin.htm. Forrester Research Report 2000). Forrester research predicts the imminent demise of most dot com retailers. Available at: http://www.forrester.com. Accessed April 11, 2000. Gartner Group Research Report 2001). Worldwide business-to-business internet commerce to reach US$8.5 trillion in 2005. Available at: http://www.gartner.com. Accessed March 13, 2001. Hanson, W. 2000). Internet marketing. Cincinnati, OH: Southwestern College Publishing. Huff, S., Wade, M., Parent, M., Schneberger, S., & Newson, P. 1999). Cases in electronic commerce. New York: McGraw-Hill. Kalakota, R., Robinson, M., & Tapscott, D. 1999). E-business: roadmap for success. Addison-Wesley Information Technology Series. O'Brien, J. 1999). Management information systems: managing information technology in the internetworked enterprise 4th ed.). Boston, MA: Irwin/McGraw-Hill. Temple-Raston, D. 2001). Study: net economy hale and hearty. USA Today Interactive Edition. Available at: http:// www.usatoday.com/life/cyber/invest/ina521.htm. Accessed January 12, 2001.