Unit-III

E-BUSINESS APPLICATIONS

Contents of units 3• E-business strategy, definition, objectives• Analysis & implementation of e-business strategy• E-marketing: meaning, areas, planning, strategy and

implementation• Internet Advertising• E-CRM, Meaning, technology for CRM and applications• E-procurement: Meaning, drives, risks and

implementation• E-SCM: meaning, focus and implementation• E-Payment systems: meaning, pre and post paid

payments systems• E-cash

E-business Strategy• E-business strategies help the business

organizations to do the businesses on to the international scene at minimal cost but with maximum efficiency. Various business models of E-business provide the companies to achieve the higher benefits with less cost and labour.

• E-business strategy also defines how an organization gains value internally from using electronic networks, such as through sharing employee knowledge and improving process efficiencies through intranets.

Objectives of e-business strategy

• Cutting total cost (reducing service and sales costs)

• Boosting productivity by integrating business processes

• Bringing new growth by retaining actual customers and attracting new ones

• Innovation and collaborative design• Mass customization• Customer self-service

Analysis and implementation of

e-business strategy

Major Stages Initiate Diagnose Assess Current Environment

Breakout Establish Strategic

Target

Transition

Industry Company

Outline project

scope Identify project

stakeholders Determine

project schedule

Industry

Competitive

Assessment Benchmark E-

business

technology Assess industry

business

partnerships

Identify current

business

strategies Assess customer

relationships Assess supplier

relationships Assess e-

business

technology Assess business

partnerships

Match current

business

strategies with

SWOT; Evaluate

alternative E-

business breakout

strategies

Analyse difference

between breakout

and current

strategy; Assess change mgt.

& cost/benefit/risk

analysis; Consider industry

responses Plot out milestones

for strategy

Outputs Project Work Plan Opportunities and

Threats

Strengths and

Weaknesses

E-business breakout

strategy

E-business transition

strategy

E-Business Strategy Stages

Stage-I &II

Stage-I:• Outline project scope;• Identify stakeholders;• Determine schedule;• Project workplan.

Stage-II: Diagnose - Industry Analysis

• Industry definition;• Identify major customers;• Identify major competitors

and their capabilities; (Study on Rayban)

• Benchmark E-business technology;

• Apply Porter’s 5 Forces.

How the Internet Influences Industry Structure

Bargaining Powerover Suppliers

Rivalry amongstexisiting Competitors

Barriers toEntry

Buyers

Bargaining Powerof Channels

Bargaining Powerof End-users

Threat of Substitutes

(+/-) Procurement using theInternet tends to raise bargainingpower over suppliers, though it canalso give suppliers access to morecustomers(-) The Internet provides a channelfor suppliers to reach end users,reducing the leverage of interveningcompanies(-) Internet procurement and digitalmarkets tend to give all companiesequal access to suppliers, andgravitate procurement to standardproducts that reduce differentiation(-) Reduced barriers to entry andproliferation of competitorsdownstream shifts power tosuppliers

(-) Reduces difference amongcompetitors as offerings are difficult tokeep proprietary(-) Migrates competition to price(-) Widens the geographic market,increasing the number of competitors

(-) Reduces barriers to entry such as the need for a salesforce, access to channels, and physical assets - anything thatInternet technology eliminates or makes easier to reducebarriers to entry(-) Internet applications are difficult to keep proprietary fromnew entrants(-) A flood of new entrants has come into many industries

(+) Eliminates powerfulchannels or improvesbargaining power overtraditional channels

(-) Shifts bargainingpower to endconsumers(-) Reduces switchingcosts

(+) By making the overall industry more efficient, theInternet can expand the size of the market(-) The proliferation of Internet approaches createsnew substitution threats

Stage II - Diagnose - Company Analysis

Identify current business strategies;

Assess company Customers;

Assess company Suppliers;

Assess company E-business technologies;

Use Value Chain to identify areas where IT can add value.

Output - SWOT Analysis.

Inbound Logistics Operations Marketing After-Sales Service

Firm Infrastructure

Procurement

TechnologyDevelopment

Human ResourceManagement

Self-service personnel and benefits administrationWeb-based trainingInternet-based sharing and dissemination of company informationElectronic time and expense reporting

Real time integratedscheduling, shipping,warehouse management,demand management andplanning, and advancedplanning and schedulingacross the company and itssuppliersDissemination throughout thecompany of real-time inboundand in-progress inventory data

Web-based, distributed financial and ERP systems

Collaborative product design across locations and among value systems participantsKnowledge directories accessible from all parts of the organisationReal-time access by R&D to on-line sales and service information

Internet-enabled demand planning; fulfilmentOther linkage of purchase, inventory, and forecasting systems with suppliersAutomated 'requisition to pay'Direct and indirect procurement via marketplaces, exchanges, auctions, and buyer-seller matching

Integrated informationexchange, scheduling anddecision making in in-houseplants, contract assemblers,and components suppliers

Transaction of orders whetherinitiated by consumer, a salesperson, or channel partnerAutomated customer-specificagreements and contract termsCustomer and channel accessto product development anddelivery statusCollaborative integration withcustomer forecasting systemsIntegrated channelmanagement includinginformation exchange,warranty claims and contractmanagement

Outbound LogisticsOnline sales channels inc.web sites and marketplacesInside and outside accessto customer information,product catalogs etc.Online productconfiguratorsPush advertisingCustomer feedback throughweb surveys and promotionresponse tracking.

Customer servicethrough email,electronic billingetc.Customer selfservice via web sitesand customerprofilingField servie accessto customer accountreview, partsavailability andordering etc.

Internet Applications in the Value Chain

Steps in e-Business Implementation

Stepwise Launch of Business Propositions

Stepwise IT Im

plementation

Pre-

Laun

chLa

unch

& G

row

thO

ptim

isat

ion

Full e-Business

Providing web-presence andinformational services

Web-enabledBusiness

Operations

StaticWeb-site

SearchableDynamic Web

Site

Order Entry:Sales & Service

via the ‘Net

Integration with Production Systems & Business Customers

RetailTransactions

Next generation e-

Business

E-marketing

Concept of e-marketing

• E-Marketing is defined as the marketing of products or services over the internet.

• E-marketing is also called as Internet marketing or i-marketing or web marketing or online marketing.

emarketing

• eMarketing is achieving marketing objectives through use of electronic communications technology or digital technology.

• These digital technologies include Internet media such as web sites and e-mail as well as other digital media such as wireless or mobile and media for delivering digital Television such as cable and satellite.

E-MARKETING TOOLS E-Marketing tools and strategies include:• Business websites; • Search Engine;• Email; • Online newsletters/e-zines; • Online catalogues; • Online press releases; • Online surveys; • Online customer service; • Banner advertising; • Affiliate marketing. • Mobile telephone marketing; • Online Community (Friendster, YouTube) - new• Web Log (Blog) - new

The e-Marketing ConceptThe objectives of marketing are to: • get the right product • promoted in the right way • sold at the right price • distributed at the right place • profitably

THE E-MARKETING CONCEPT

Examples of e-Marketing include: • online surveys to conduct market research • web site to display and sell your products • internet advertising to promote your

business • software to collect and analyse your

customer information

THE E-MARKETING CONCEPT

The Key to e-Marketing:• The key to successful e-Marketing in today's

business environment is to place your clients in control. Allow them to choose how often and what type of messages they receive, thus creating a more meaningful relationship with your business.

• This is commonly referred to as Permission Marketing.

• Your e-Marketing messages and tools should aim to deliver information that the consumer wants - that they perceive to be valuable.

INTEGRATING E-MARKETING INTO YOUR BUSINESS

• e-Marketing is not an alternative to your existing Marketing Plan, in fact you may already have a "Marketing Plan" that identifies your marketing objectives, outlines your key strategies designed to achieve those objectives, and guides your daily marketing activities.

• With e-Marketing you can develop techniques to enhance this existing plan to make your marketing activities more effective (smarter) more efficient (cheaper) and you may even find that you can tap into new markets both locally and overseas.

HOW WOULD E-MARKETING ENHANCE MY EXISTING

MARKETING PLAN• With the use of internet-based product

catalogues you can reduce your printing costs and maintain a higher quality of product information for your customers.

• By utilising marketing information systems you can analyse your sales information to make more informed decisions and customers all over the world can view your products with a website.

CAN MY BUSINESS AFFORD E-MARKETING?

• The cost of e-Marketing depends on which strategies you choose to implement.

• Any business can start using simple e-Marketing techniques such as email, newsletters, computer based data management and internet research by purchasing a computer and connecting to the internet which can be achieved for less than $2,000.

• Businesses can also spend many thousands of dollars utilizing the services of a professional e-Marketing firm to create and implement a complete e-Marketing package. The choice is yours!

The Marketing Process • A comprehensive marketing process and

resulting Marketing Plan is critical for the success of your business.

• An effective marketing process should provide you with the information, strategies and solutions to any and all obstacles you might encounter along the way in building and running a successful and profitable business.

E-MARKETING TOPICS• Affiliate Program• Search Engine Optimization• Email Campaigns• Banner Exchange• Business Website• Mobile Phone Marketing

INTERNET ADVERTISING

Internet Advertising

• Online advertising is a form of promotion that uses the Internet and World Wide Web for the expressed purpose of delivering marketing messages to attract customers.

• Examples of online advertising include contextual ads on search engine results pages, banner ads, Rich Media Ads, Social network advertising, online classified advertising, advertising networks and e-mail marketing, including e-mail spam.

Internet Advertising• Internet advertising is very similar to TV and radio

advertising. The programs are offered as a free service; commercial advertising pays the expenses. The same is true of Internet advertising. The information is free, with the costs defrayed by advertising.

• A major advantage of Internet advertising is the ability to attract a specific target audience. This advantage is limited or nonexistent in other forms of media advertising. With the Internet, ads are directed towards the right group of people.

• Internet ads are known as banners. Virtually all banners are links to other sites, but there are still those few that are just meant to be seen, like billboards. One advantage of Internet advertising is that it opens new possibilities to spread messages to a targeted audience. By advertising to a particular group, chance of success are indeed great.

e-procurement

How Internet Advertising works?

There are various Internet advertising techniques: 1. The ad owner pays a fixed amount for each person who visits the page with the ad. 2. The ad owner pays a fixed amount for each click on an ad that links to the advertisers' web site.3. The ad owner pays a fixed rate to have his advertisement posted for a specified duration.4. The ad owner has the option of either promoting their product or service through survey based contests in their site.

e-PROCUREMENT

• E-Procurement is the purchasing of goods and services using the internet.

• It Covers full life cycle of purchasing (indent to receipt of goods).

• e-procurement connects buyers and suppliers through electronic exchange of Tenders, catalogs, contracts, Pos, invoices etc.

• Typically, e-procurement Web sites allow qualified and registered users to look for buyers or sellers of goods and services. Depending on the approach, buyers or sellers may specify costs or invite bids.

Types of e-procurement• e-marketsites• e-MRO (Maintenance, Repair and

Overhaul)• e-sourcing• e-tendering• e-reverse auctioning• e-informing• Web-based ERP (Enterprise Resource

Planning):

ADVANTAGES OF e-PROCUREMENT

• In reality e-procurement has the advantage of taking supply chain management to the next level, providing real time information to the vendor as to the status of a customer's needs. For example, a vendor may have an agreement with a customer to automatically ship materials when the customer's stock level reaches a low point, thus bypassing the need for the customer to ask for it.

• Eg: the e-procurement website of Government of Andhra Pradesh is: www.eprocurement.gov.in

Electronic Payment SystemsE-payment systems comprise payment

services over the network for goods and services procured.

Electronic payment system consists of :1. Buyer2. Seller3. Payment gateway4. Buyer’s bank (issuer of the payment

instrument)5. Seller’s bank ( acquirer)

Prepaid payment systems

These include:1. Prepaid cards2. Internet Accounts/Wallet/Purse3. Mobile Accounts/Wallet/Purse4. Remittance Cards ( Domestic or

International)

Prepaid Cards

Prepaid cards function under two programs:1. Under open-loop, cards are accepted and

processed across the globe at any Master card/Visa or similar merchants across the globe besides these cards can also be used to withdraw the money from the card using ATMs

2. In a closed loop program, acceptance is limited to specific geographic locations, generally domestic.

• Eg: Gift card

Internet accounts/wallets/purse

These are classified into:1. Internet bank accounts2. Internet virtual accounts with cash

withdrawal across the globe3. Wallets/ purse for specific usages with

no cash withdrawal.

Mobile Accounts• Mobile banking account with all features of

traditional banking and cashRemittance:Across the globe; no limits and specified

value for specific transaction and total during the year.

Credit Cards• CREDIT DEFINITIONS• Credit• Trust given to another person for future payment of a loan, credit

card balance, etc.

• Creditor• A person or company to whom a debt is owed.

• Applying for a credit card — potential creditors obtain information from you, about you, and about the economy– Personal information

• Cash inflows• Cash outflows• Credit history• Capital• Collateral

WHAT IS A CREDIT SCORE?• A credit score is a number that helps a lender

predict how likely an individual is to repay a loan, or make credit payments on time.

• A credit score is a number that changes as the elements in a credit report change.

• A credit score has broad use and impact. Your credit past is your credit future.

Credit Cards

• Credit check– Credit report: a statement of creditworthiness

based on information such as whether you have made late payments, and any unpaid current bills

– Credit scoring often determines whether or not you are approved for credit

Credit Cards

– Interpreting credit ratings• High ratings usually provide easy credit approval• How ratings make obtaining credit difficult

e-CASH • Electronic Cash (also known as electronic money,

electronic currency, digital money, digital cash or digital currency) refers to money or scrip which is exchanged only electronically.

• Typically, this involves use of computer networks, the internet and digital store value systems. Electronic Funds Transfer (EFT) and direct deposit are examples of electronic money. Also, it is a collective term for financial cryptography and technologies enabling it.

• ECash is a legal form of computer-based currency that can be securely purchased and withdrawn by credit card, Cheque, certified cheques, wire transfer, money order and Electronic Cheque Processing (ECP).

• Users can also deposit to and withdraw from their ECash Direct account using several third-party merchants' payment solutions.