Electronic Commerce

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Electronic Commerce
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Managerial Questions

• What is e-commerce?
• What benefits can I expect?
• How much will it cost?
• What are the risks?

• What are electronic markets?
• What do I need to become involved as a pure
  dot-com?
• What do I need to take my brick-and-mortar
  business into e-commerce?

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The More Things Change

• The use of ICT in businesses is not new
• e.g. the telegraph, the phone
• Is e-commerce just one more channel?
• Is e-commerce just a new variation on an old
  model?

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The More They Dont Stay the Same

• There are some significant changes e-commerce
  fosters
• Speed of communication
• Changing the place of business (now in your
  living room or office).
• Changing time of business (24/7/365)

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What is Electronic Commerce?

• Electronic gt via the Internet, an intranet, or a
  private network
• Computer to computer
• Person to computer
• Computer to person
• Person to person via computer network
• Commerce gt Virtually any aspect of business
  exchange
• The complete selling cycle, or just a single part
  of the cycle such as payment or service

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Most Importantly

• E-commerce results in the combination of
  technology and other organizational business
  practices to make NEW business models.

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Three Dimensions of EC
Partial electronic commerce areas
Pure electronic commerce
Delivery process
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Examples

• Traditional commerce
• Buy a watch at a department store
• Partial e-commerce
• Buy a watch online at an e-store
• Pure e-commerce
• Buy a e-book online at an e-store using e-cash

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Sidebar Evolving E-commerce

• 1970s EFT
• 1980s EDI
• Late 1980s web connectivity (chat rooms, etc).
• 1990s Groupware and collaboration
• 1995 WWW
• Coming - ? Internet 2? 3-D Internet?

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E-Commerce Relationships

• The more traditional models
• B2B transactions between organizations
• B2C sales from business to consumers
• C2C sales between consumers

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E-Commerce Relationships

• The newer models
• C2B consumers sourcing possibilities from
  corporations
• G2C interactions with citizens, not consumers
• Intrabusiness transactions within a firm
• M-commerce mobile (cell phones) transactions

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E-Business Markets
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The State of E-Commerce
Total Retail and E-commerce Retail Sales through
3rd Quarter 2006
Source http//www.census.gov/mrts/www/data/html/0
6Q3.html.
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E-Commerce Growth
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Technology in E-Commerce

• Internet public and worldwide
• Intranet private within a firm
• Extranet private between organizations

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Should you go into E-Commerce?

• Need to consider the detailed business case for
  the project
• Technical feasibility
• Economic feasibility
• Organizational feasibility

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Issues

• Security
• Customer buy-in
• Employer buy-in
• Employee buy-in
• Resources
• Funding
• Strategy

• Competitive expectations
• Staying current
• Vendor support
• Upgrade or change application?

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E-Commerce Benefits

• Cost efficiencies lower costs
• Operational efficiencies more accurate
  transactions (mostly)
• Effectiveness increasing reach, better
  communications with customers, suppliers, etc.

• Facilitates national/international expansion
• Reach a target/niche audience
• Avoid brick-and-mortar overhead
• Access venture capital (not always easy)

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E-Commerce Costs

• Tangible
• Hardware, software and development
• Project management, staffing and training
• Marketing and transaction costs
• Upgrades, hosting and access costs
• Logistics and security

• Intangible
• Alienating existing customers
• Opportunity cost of other investments
• Frustration and failures (no project is without
  at least minor ones)

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Electronic Business Model

• Some considerations
• The process
• (How to handle) consumer problems
• (How to handle) retailer problems
• Information transactions
• Advertising

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The 7 Cs of E-Commerce

• Cost
• Convenience
• Communication
• Community
• Coordination
• Customization
• Collaboration

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Exercise

• Choose a category of e-commerce (B2B, B2C, G2C,
  etc.)
• Choose two web-sites that fit in that category.
• Evaluate and compare those web-sites with respect
  to the 7Cs.

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Structure of the Marketplace

• What is EFT?
• And then what does it make possible?
• What does EDI do?
• And then what does it make possible?

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Electronic Markets Places of Exchange

• A market is a place of exchange,
• What is being exchanged in an e-market?
• information
• products / services
• payments

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The Electronic Market
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Business and the E-Market

• Extended reach
• Bypassing traditional channels
• Augmenting traditional markets
• Improved service