EC and the Virtual Corporation

1
EC and the Virtual Corporation Session 2
2
So What is Electronic Commerce?
TECHNOLOGIES (TOOLS)
METHODOLOGIES (PROCESSES)
that enable
ELECTRONIC FUNDS TRANSFER
ELECTRONIC DATA INTERCHANGE
ELECTRONIC BULLETIN BOARDS
ELECTRONIC CATALOGS
E-MAIL
BAR CODING
INTERNET / WWW
CONTINUOUS ACQUISITION AND LIFE-CYCLE SUPPORT
JUST IN TIME
VENDOR MANAGED INVENTORIES
3
Elements of EC Defined
Communications the delivery of information,
products services, or payments via telephone
lines, computer networks, or any other means
Business Process the application of technology
toward the automation of business transactions
and workflows
4
Elements of EC Defined
Service a tool that addresses the desire of
firms, consumers, and management to cut service
costs while improving the quality of goods and
increasing the speed of service delivery
Online provides the capability of buying and
selling products and information on the Internet
and other online services
5
EC Defined
Key Elements of our definitions -EC is NOT
just technology -Technology applied to a
business problem so that information is
captured and exchanged in digital or
electronic formats.
6
A Framework for Electronic Commerce
This is my Model for this course
What value is a model?
A model is only valuable when it helps us to
explain (and maybe predict) reality
7
Internet Framework
Zwass
Products Electronic Auctions Services Market
places Brokerages Products
Systems Remote consumer svcs Supplier-custom
er links Services Enabling Services Electronic
Catalogs E-money, Authentication Secure
Messaging EDI, Email, EFT Infrastructure Hyperme
dia, Object Mgt WWW, JAVA Public/Private
Com Internet, VANS Wide-area Telecom PSTN
8
Framework for Electronic Commerce
What are the key elements of the Whitehouses
position on EC?
Private Sector leadership
Avoidance of undue restrictions - taxation?
Content?
Legal environment based on contract law
Recognition of unique qualities of the Internet
Facilitation of global E-commerce
Do you agree? What would you expect from
candidates in 2000?
9
Network Economy
The law of inverse pricing the law of
generosity?
The best keeps getting cheaper
Most valuable things free?
Is this true?
The ultimate free market economy?
If so, how does a firm compete?
The net, by its very nature is hostile to profit
margins. The net is relentlessly
efficienthard-pressed to win and sustain any
lasting competitive advantage - WSJ 7/23/98
10
A Model for E-business
Internal
Business Partners
Supply Chain Mgt
Enterprise Resource Planning
External
Knowledge Applications
Enterprise App Integration
Management Control
Administration Control
Customer Relationship Mgt
Selling Chain Mgt
Figure 4.11 page 103
Customers, Resellers
11
Why has the Internet Emerged as a
Business Platform?
12
Graphical and Intuitive
Easy NavigationPoint Click IntuitiveUser
Friendly Structured Information Easy access to
value-added content Mass Medium Status
13
Interactive
User-based InteractionsReal-time
responsiveness Decision MakersInteractive,
intelligent help Additional FunctionalityNew
user interactions Sophisticated ProgrammingJava
and Active-X controls
14
Collaborative
Real Time Communications Universal
application Discussions Multi-user
chatting Video Conferencing2--way, real time,
MS NetMeeting Supports Groupware Calendars,
scheduling
15
Intelligent
Powerful Search ToolsCustomized information
retrieval Intelligent Agentsrobots, spiders,
artificial intelligence Ultimate one-to-one
Marketing Targeted ads, direct marketing Track
Behavior Collect and analyze user information
16
Multimedia
Video-based Content Approaching a TV-quality
medium Audio-based ContentStreaming
media Animations Supporting simulations
Virtual Reality 3-D tours of parts buildings
or autos
17
Other Characteristics ...
Consolidates Other Applications Email, FTP,
Multimedia. SecureEncryption,
certificates Universal Becoming the worldwide
standard Reliable and Scalable Infrastructure
is maturing rapidly now that it is mission
critical
18
Some Key Internet Stats
Phenomenal Growth Rate
19
Some Key Internet Stats
Fastest Growing Medium Ever
20
Some Key Internet Stats
Users are More Experienced
www.cc.gatech.edu/gvu/user_surveys/
21
Some Key Internet Stats
Users Spend More Time On the Net
22
Some Key Internet Stats
The Internet is no longer just affluent white
males techies. The Internet looks like America
-- a cross section of the population. CBS
Newscast June, 1999
23
Some Key Internet Stats
North American Net Users - 67 The rest of the
World - 33
http//www.euromktg.com/globstats/index.html
24
Some Key Internet Stats
Worldwide Internet Growth
25
Summary of Stats
As of May 1999 - 171 million globally 50 in
US and Canada
US Canada have higher level of Internet
Participation on per capita basis
In US growth has occurred more rapidly at higher
income levels
Digital divide has increased 1994-97
Lower income countries have lower access rates
Mexico 100 million - 1 m access to a computer
- 10 of those Internet
Implications?
26
What business models do we find on the Internet?
27
Emerging Internet Models
Business-Consumer
Business-Business
Product Based
www.amazon.com www.mercata.com
www.officemax.com www.boeing.com
Physical
www.Estamps.com www.bluemountainarts.com
www.wsj.com www.photodisc.com
Digital
Service Based
www.peapod.com www.etrade.com
www.fedex.com www.expedia.com
Traditional
www.roboshopper.com www.ebates.com
www.netseminar.com www.yesmail.com
Digital
28
Business-Consumer
Product Based
Physical
www.amazon.com www.mercata.com www.cdnow.com www.d
ell.com
Candidates for success
Compete based on
Products that are generally well known to the
buyer that typically don't require the buyer to
sample. Good for generic products - books, cds,
foods and also specialty products that the buyer
may already know and like. Includes catalogs
and electronic malls.
Selection Ease of Use Immediate Availability
29
Business-Business
Product Based
Physical
www.officemax.com www.boeing.com www.partnet.com w
ww.thesealman.com
Candidates for success
Compete based on
Selection Availability Ease of Use Reduce
Seller's cost
Products that buyers know and routinely purchase.
Includes any products that the buyer can select
and order with minimal or no personal
interaction with the seller. These are often
parts or catalog items that the buyer needs to
support business operations. Office supplies,
equipment parts and accessories are examples.
30
Business-Consumer
Product Based
Digital
www.Estamps.com www.bluemountainarts.com
Candidates for success
Compete based on
Products that can be delivered electronically.
Examples include software or content based
products such as reports, articles, or books.
Can include anything that can be digitized,
including drawings, pictures, plans, etc. May
be subscription based. Often offer limited
information for free and charge a fee for more
indepth coverage.
Uniqueness Availability
31
Business-Business
Product Based
Digital
www.wsj.com www.photodisc.com
Candidates for success
Compete based on
Immediate Delivery Timeliness of
Information Uniqueness Ease of Use
Products that can be delivered electronically.
Includes reports, newsletters, advice, expert
opinions, statistics, software, photographs,
audio, video and other multimedia.
32
Business-Consumer
Service Based
Traditional
www.peapod.com www.etrade.com www.cybermeals.com w
ww.remax.com
Candidates for success
Compete based on
Migration of some aspect of delivering
traditional services to the Internet. The
service is typically not new. In fact, the
service is understood completely. It is the
ordering or delivery of the service via the
Internet that is the key. This works best
where the buyer does not need to be educated
about your service. They are likely to
understand what you offer. Services that the
customer likes to control - banking, stock
trading, etc.
Convenience Speed of Delivery Reduction of Cycle
Time Control
33
Business-Business
Service Based
Traditional
www.fedex.com www.expedia.com www.usps.com
Candidates for success
Compete based on
Cycle Time Reduction Cost Reduction Control
Migration of some aspect of delivering
traditional services to the Internet. The
service is typically not new. In fact, the
service is understood completely. It is the
ordering or delivery of the service via the
Internet that is the key. This works best
where the buyer does not need to be educated
about your service. They are likely to
understand what you offer. Gives buyer control.
34
Service Based
Business-Consumer
Digital
www.roboshopper.com www.ebates.com www.altavista.c
om www.compare.com www.ebay.com www.pricewatch.com
Candidates for success
Compete based on
Reduction of Cycle Time Unique value proposition
Entirely new services made possible by the
Internet. Services that make the buyer a more
productive user of the Internet such as search
engines or software agents. Services that would
not be possible without the Internet. Services
that create a new market like auction sites.
35
Business-Business
Service Based
Digital
www.netseminar.com www.yesmail.com
Candidates for success
Compete based on
Entirely new services made possible by the
Internet. Services that make the buyer a more
productive user of the Internet such as search
engines or software agents. Services that would
not be possible without the Internet. Services
that create a new market.
Cycle Time Reduction Cost Reduction Unique value
proposition
36
Approaching the Web
Processes
Fulfillment Settlement Workflow
Transactions
Database Queries Payments Funds Transfers
Interactivity
Increasing Functionality
Registration Games Forms
Publishing
Advertising Marketing Information
Time or Maturity
David Kosiur, Understanding Electronic
Commerce, p. 107, Microsoft Press 1997
37
Understanding the Infrastructure
38
The BIG Picture
More on the Backbone Later
39
Telephony 101
The Internet is built on top of the Public
Switched Telephone Network Also called an overlay
network
LEC View
Last Mile
Local Loop
Local Loop Slowest portion of the network
40
Telephony 101
Hierarchy of Central Offices
Total Network is PSTN
IXC View
Digital COs now the norm
Circuit Switching
The Internet is a Packet Switched Network
41
Transmission Media
Acceptable for Voice - analog signaling Unshielded
Twisted Pair Millions of miles in place Not
optimal for data communications
Copper Wire
Copper wire inside shielded cable Capable of
handling very high frequencies Dozens of 6 MHz
channels on single cable
Coaxial Cable
42
Transmission Media
Media of Choice Uses frequencies a million times
higher Speeds as high as 9.6 gbps Now being used
with cable
Fiber
Wireless
Microwave, synchronous, low-orbit Iridium,
Globalstar - LEO Eliminates need for wire
infrastructure Complete mobility
43
Internet End-End
Difficult to buy a machine that cant exploit the
features of the Internet
What about Network PCs? NY Times article on Sun
8/31/99
http//navigators.com/internet_architecture.html R
uss Haynal
44
Internet End-End
Access Options
Dial up Access 56 Kbps ISDN 128 Kbps T1
Circuit 1.54 Mbps ADSL 3-6 Mbps Ethernet 10
Mbps Satellite 10-100 Mbps Cable
Modem 30-40Mbps T3 Circuit 45 Mbps Fiber
OC-192 9953.28 Mbps
45
Internet End-End
46
Internet End-End
Usually located in a CO
47
Internet End-End
This provides you access to the services of the
ISP
48
Internet End-End
This is the Internet Backbone UUNET Worldcom
(MCI)
SONET Synchronous Optical Network Expected to
be the standard for next 2 decades Hierarchical
scheme OC - 192 fastest 9953.28 Mbps Equal to
5376 x 24 voice circuits
49
Internet End-End
50
Internet End-End
Step 1 Client and Server establish tcp/ip
connection
Step 2 Client issues a request which includes a
URL
Step 3 Server issues a response
Step 4 Server terminates the connection
51
Internet End-End
Data Communications on the Internet uses TCP/IP
which is a Packet Switched Protocol
Data not sent in real time Stored in computer
until packet available Only then is the packet
sent Extremely efficient Freight Train Analogy
Packet Switching
52
Internet End-End
TCP/IP - Next Week