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CHAPTER 1Introduction to e-business and e-commerce

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Intro Discussion

Apa yang ada di benak Anda saat mendengar kata-kata e-commerce?

Mengapa Anda mengambil kuliah e-commerce? Apa yang Anda harapkan dari kuliah ini?

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Learning outcomes Define the meaning and scope of e-business and e-

commerce and their different elements Summarize the main reasons for adoption of e-

commerce and e-business and barriers that may restrict adoption

Use resources to define the extent of adoption of the Internet as a communications medium for consumers and businesses

Outline the business challenges of introducing e-business and e-commerce to an organization.

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Management issues

How do we explain the scope and implications of e-business and e-commerce to staff?

What is the full range of benefits of introducing e-business and what are the risks?

How great will the impact of the Internet be on our business? What are the current and predicted adoption levels?

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Discussion

Siapa yang pernah belanja online? Siapa yang memiliki lapak online?

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Internet business opportunities

Reach: Over 1 billion users globally Connect to millions of products Compare with marketing/channelling via TV or

other media Richness

Detailed product information on 20 billion + pages indexed by Google. Blogs, videos, feeds…

Personalised messages for users Interaction

Affiliation Partnerships are key in the networked economy

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The impact of the Internet on business

Andy Grove, Chairman of Intel, one of the early adopters of e-commerce, has made a meteorological analogy with the Internet. He says:

The Internet a typhoon force, a ten times force, or is it a bit of wind? Or is it a force that fundamentally alters our business? (Grove, 1996)

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E-business risks

Making wrong decision about e-business investments Wrong market approach Issues regarding e-business

implementation Provide poor online customer experience

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Internet risks – what can go wrong with a transactional site?

Web sites that fail because of spike in visitor traffic

Hacker penetrating the security of the system

A company emails customer without receiving their permission

Problems with fulfilment E-mail customer-service enquiries from

the web site don’t reach the right person

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E-commerce Definition

E-commerce: All electronically mediated information exchanges between an organization and its external stakeholder

Not solely restricted to the actual buying and selling of products, but also includes pre-sale and post-sale activities

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Different perspectives of EC

Communication Delivery of information, product/services or

payment by electronic means Business process

The application of technology towards the automation of business transactions and workflows

Service Enabling cost cutting at the same time as

increasing the speed and quality of service delivery Online

The buying and selling of products and information online

Figure 1.1 The distinction between buy-side and sell-side e-commerce

Slide 1.13 Types of sell-side e-commerce (p 10) Transactional e-commerce sites

Bhineka, lazada, dll Services-oriented relationship-building

web sites Asuransi, consulting, sekolah

Brand-building sites www.nokia.com, Unilever

Portal or media sites www.yahoo.com

Figure 1.2 Summary and examples of transaction alternatives between businesses, consumers and governmental organizations

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E-government

The application of e-commerce technologies to government and public services for citizens and businesses

Cover services for: Citizens Suppliers Internal communications

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E-business

All electronically mediated information exchanges, both within an organization and with external stakeholders supporting the range of business processes

E-business concepts: Applied to strategy and operations An adjective to describe businesses that

mainly operate online

Figure 1.4 Three definitions of the relationship between e-commerce and e-business

Figure 1.5 UK rate of adoption of different digital mediaSource: MORI Technology Tracker, January 2006. See www.mori.com/technology/techtracker.shtml for latest details

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Drivers of consumer Internet adoption Content: Detailed, in depth information

about products Customization: personalization

(recommendation, alerts) Community: discussion about products &

services Convenience: select, purchase and use

24x7 Choice: wider range of products Cost reduction: low cost place of purchase

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Barriers of consumer Internet adoption No perceived benefit Lack of trust Security problems Lack of skills Cost

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Drivers of business adoption Potential for increased revenue Cost reduction

Figure 1.6 Attitudes to business benefits of online technologiesSource: DTI (2002)

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Cost/efficiency and competitiveness drivers

Cost/efficiency drivers Increasing speed with which supplies can be obtained Increasing speed with which goods can be dispatched Reduced sales and purchasing costs Reduced operating costs.

Competitiveness drivers Customer demand Improving the range and quality of services offered Avoid losing market share to businesses already using e-

commerce.

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Tangible and intangible benefitsTangible benefits Intangible benefits

Increased sales from new sales leads giving rise to increased revenue from:– new customers, new markets– existing customers (repeat-selling)– existing customers (cross-selling).

Marketing cost reductions from:– reduced time in customer service– online sales– reduced printing and distribution costs of marketing communications.

Supply-chain cost reductions from:– reduced levels of inventory– increased competition from suppliers– shorter cycle time in ordering.

Administrative cost reductions from more efficient routine business processes such as recruitment, invoice payment and holiday authorization.

Corporate image communication Enhancement of brand More rapid, more responsive marketing

communications including PR

Faster product development lifecycle enabling faster response to market needs

Improved customer service Learning for the future Meeting customer expectations to have a

web site Identifying new partners, supporting

existing partners better Better management of marketing

information and customer information Feedback from customers on products

Figure 1.8 Adoption of Internet and e-business services across EuropeSource: Eurostat, Community Survey on ICT usage in enterprises, eEurope (2005) Information Society Benchmarking Report, © European Communities 2005, http://europa.eu.int/information_society

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Barriers to adoption

Business are not using Internet for particular e-business applications

Figure 1.9 Barriers to development of online technologiesSource: DTI (2002)

Figure 1.10 The McKinsey 7S frameworkSource: Adapted from Waterman et al. (1980)

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Topics for Mid Exam

Pengenalan e-business dan e-commerce Fundamental e-commerce Infrastruktur e-business E-environment Strategi e-business E-procurement E-marketing

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Topics for Final Exam

Supply Chain Management Customer Relationship Management Change Management Analisis dan Pemodelan Data Desain e-Business Implementasi dan Pemeliharaan

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Exercise

Please identify one company for each the types of e-commerce below: Transactional e-commerce sites Services-oriented relationship-building web

sites Brand-building sites Portal or media sites

Refer to Figure 1.2 and identify a company for each the category provided.

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Summary

1. Electronic commerce traditionally refers to electronically mediated buying and selling

2. Sell-side e-commerce involves all electronic business transactions between an organization and its customers, while buy side e-commerce involves transactions between an organization and its suppliers

3. ‘Electronic business’ is a broader term, referring to how technology can benefit all internal business processes and interactions with third parties. This includes buy-side and sell-side e-commerce and the internal value chain

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Summary

4. The monetary value of e-commerce for business-to-business (B2B) transactions greatly exceeds that for business-to-consumer transactions (B2C)

5. The main business drivers for introducing e-commerce and e-business are opportunities for increased revenues and reducing costs, but many other benefits can be identified that improve customer service and corporate image

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Summary

6. Consumer adoption of the Internet is limited by lack of imperative, cost of access and security fears. Business adoption tends to be restricted by perceptions of cost, making return on investment difficult to quantify

7. Introducing new technology is not all that is required for success in introducing e-commerce and business. Clearly defined objectives, creating the right culture for change, mix of skills, partnerships and organizational structure are arguably more important

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Tugas

Halaman 22-23, North West Supplies