©su/jcw/dk v 2010 slide 1 e-commerce format of session e-commerce sources what is e-commerce...

©SU/JCW/DK V 2010 Slide 1

E-CommerceFormat of Session

E-Commerce sourcesWhat is E-CommerceOrigins of E-CommerceE-Commerce BenefitsE-Commerce ProblemsPractical


E-CommerceInternet/Electronic E-Business &c

“In five years all business will be conducted on the Internet” etc

Any company not on the internet will not be a company!

Not a question of E-Commerce - but howGroves statement April 1999 Intel Chairman -

see CD/Intel web site for exact statementFax example - prerequisite to doing business


E-CommerceInternet business as a timeline

Business evolution moving from an agrarian to industrial to post industrial economy

18th/19th century - inventions such as spinning jenny revolutionised business

20th - Distribution revolutionised business21st - Internet Economy - customisation for

consumers requirements


E-CommerceDynamic Trading

Service plus product -

JCB aim to do this as it gives competitive advantage see www.jcb.co.uk

Demand drives production e.g. Dell inventory level of 7 days, Dell sell only over internet

Prices matches market conditions - auction web sites see ebay.com as an example

Business chain turning into value added network


E-CommerceUK.com - how are we doing?

UK/World Facts:-35 years since birth of the what we now know

as the InternetConcern in recent years that UK has not yet

embraced E-Commerce but recent statistics indicate that this may be changing

UK loves E-Commerce We are the biggest users in Europe


E-CommerceLatest UK Statistics

According to the office of the e-envoy (now archived)Web access (broadband has increased)Online trade has increased year on year since

early 2001Online banking usage has increased95% of businesses are connected


E-CommerceMain Adult Internet Usage in UK

http://www.statistics.gov.uk/cci/nugget.asp?id=8

Source: National Statistics 2008


E-CommerceLocal N.Staff/S.Cheshire Facts

E-Commerce starting to take off in the local area Lots of effort from local Chamber of Commerce,

Business Link, firms offering Web services - TWF;Sentinel etc

Majority of large local firms have a web presence but not necessarily a E-Commerce presence

What is the timeframe for E-Commerce? This year, next year? - it is a strategic issue


E-CommerceWhat does the EU think?

“The three pillars for the success of the EU Integration are the Single Market, Monetary Union and Electronic Commerce.”

Mario Monti, EU Commissioner, June 1998.

However, Europe represents a confusing picture(understatement!)

Denmark way ahead in E-Commerce, embracing the very ethos of E-Commerce - a small country maximising its world market share by the use of electronic trade frontiers

UK, Germany and France – gathering pace


E-CommerceUK Business pundits

“My conviction has increased that in Electronic Commerce we have a massive and beneficial instrument for change. The businesses that are going to survive are those that are going to adapt and change fast.”

Sir John Harvey Jones (deceased) Other “big hitters” regularly highlighting E-Commerce

Prime Minister and E-Envoy (now defunct role) BERR CBI Professional bodies such as the British Computer Society

(BCS) – see Jonathan if you wish to join


E-CommerceWorld.com

By its very nature E-Commerce is globalWorld hotspots for E-Commerce are:Hong Kong/Singapore - probably a year ahead - they

now have a legislative infrastructure - these two commercial centres hold certain advantages which explain this lead

USA - very active“Third world/Fourth”? World – more activity but watch

China!


E-CommerceBuying patterns

Is there a threat posed by E-Commerce?Research is ongoing but suggests that E-Commerce

does not replace the demand for personal service - buying a pair of skis or a mountain bike

It is a matter of choice - if you know what you want or are prepared to browse the web then E-Commerce solutions attract customers

Some customers will still prefer/need to visit a store/shop physically

So can we start to define “E”


E-CommerceWhat is E-Commerce?

an electronic communication tool

exchange of information between:1. companies - business to business (extranets)2. companies and customers (internet)3. between company departments (Intranet)


E-CommerceWhat is not E-Commerce?

A common mistake is that firms/individuals regard a web site or web development as E-Commerce

Example Orchard CiderIt could be argued that these are just pre-

requisites for E-CommerceE-Commerce is a business issue/business

policy/business model issue - not just a technical issue


E-CommerceExchange of information B2B

supply chain : exchange of information in each stage of production (raw materials-final product)

ordering, payment, trackingE-Commerce can streamline the procurement

and payment processes making it easier for businesses to conduct their operations


E-CommerceExchange of information B2C

electronic brochures : information about products/services

electronic retailing : selling of products/services

customisation : customer feedback permits tailor-made personalised services.


E-Commerce

Exchange of information - departmental

increase of information flows between company departments

improves communicationimproves customer service


E-CommerceOrigins of E-Commerce

Electronic commerce (E-Commerce) did not appear with the internet!

Some firms have been exchanging “bread and butter” data i.e purchase orders, invoices etc for many years using Electronic Document Interchange(EDI)

Large manufacturing companies recognised EDI as an opportunity to seize competitive advantage very early on.


E-CommerceEDI

EDI is still the backbone of E-Commerce - the customer interface is a sexy front end

EDI traditionally costly to implement for a SME and traditionally is a batch data system - 2 - 10k

EDI usually involves tracking software


E-CommerceImpact of the Internet on EDI

Massive increase!One of the major difficulties in implementing

EDI between two companies has been getting both parties on the same network

With the Internet every company is potentially on the same network with every other company


E-CommerceEDI to E-Commerce

The internet has enabled entry level for SME’s into EDI/E-Commerce more affordable

Costs about <5k a year to run E-Commerce solution only needs a browser and a

hosted web site to get started. Payment servicing and logistics are needed as well

Companies with existing e-mail and web browser usage can quickly adjust to E-Commerce


E-CommerceE-Commerce Benefits

Huge cost savingsGrowth of customer base and market shareProtection of brand, customer base and

market shareReduction of risk; low capital requirementsIncrease in efficiencyIncrease in profits



Improvement in customer service and information about products/services

Feedback of vital information; allows customisation

Sharing of information (stock availability, price changes, invoice payment, delivery times,…)

Encourages change in the organisational structure and culture, necessary to survive in the networked economy



Tax benefits - may be VAT and tax breaks - still not clear on this globally. World Trade Organisation meeting in Seattle tried to clarify this

Accessible by everyone who has Internet accessAccessible 24hrs per day, 7 days per week, 365 days

of the yearLower price feasible (at least two links in the supply

chain disappear)



Access to up-to-date informationEasy comparison of thousands of products on

a single web siteNo contending with traffic, parking, limited

store hours, other shoppers, lugging around with heavy packages.

Elimination of fraudulent use of credit cards by sales personnel?


E-CommerceE-Commerce Problems

Company culture : lack of communication between departments :

the IT department does not understand the business opportunities of E-Commerce

the commercial department does not understand the potential of new technologies

Resistance to change business processes:Inertia!


E-CommerceGeneral Problems

E-Commerce priority :UK : business to business; focus on short-

term profitabilityUS : business to consumer; focus on long-

term profitability


E-CommerceGeneral Problems

Investments :US : heavy, to gain competitive advantageUK : wait to see which way the cat jumps

(fear of failure of investments)danger of missing out on huge opportunitiesrisk of commercial suicideUS companies: threat to UK companiesconsider advantages business to consumer focus


E-CommerceProblems

E-Commerce wrongly interpreted as a technology issue rather than a business opportunity

Consumer lacks trust in security systemsLegacy integration : how integrate inherited

systems with new Internet-based solutions? Adapt to old systems

How to get the goods to the customer? Adapt logistic processes


E-CommerceProblems

Brand awareness (first brand stays in customer’s mind); solve by offering Internet freebies

Keep the customer informed about the progress of their order; tracking

Import regulations and customs


E-CommerceOther issues

decrease in seduction powercustomer has to know exactly what he/she

wantsincrease in cocooning with social and health

consequencesincrease in unemployment (links in supplier

chain disappear)


E-CommerceE-Commerce held back?

By what - recent newspaper articles and research indicate that security is the big fear amongst consumers - fear of giving credit card details over the web

At least two problems exist in trade of any sort: 1. Authenticity of the shopper and the vendor2. Security issues from the release of credit card

These issues have been amplified by the web

©su/jcw/dk v 2010 slide 1 e-commerce format of session e-commerce sources what is e-commerce...

Documents

business slide

ecommerce internet business

ecommerce presence

embraced ecommerce

europe slide

pace slide

network slide

ecommerce uk business