Electronic Commerce Solutions and Applications in SCM, CRM

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Electronic CommerceSolutions and Applications in
SCM, CRM

• Prof. Bharat Bhasker
• Indian Institute of Management Lucknow

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Electronic Commerce

• Delivery of Information, Product/Services, and
  payments through electronic means
• Online capability of buying selling goods over
  the internet
• Reducing service costs, improving quality of
  goods and increase in speed of service delivery
  through electronic media

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E-Commerce

• Its concerned with systems and business
  processes that support -
• Creation of Information Sources
• Effective and efficient interaction among
  producers, consumers, intermediaries and sellers
• Movement of information on global networks

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Increasing efficiency and speed of business
transactions, processes, and improving customer
relationship services

• More Specifically -
• Enable enterprise to conduct business with
  geographically dispersed partners
• Streamlining procurement and distribution
  processes at reduced cost
• Achieve closer customer-vendor relationship
• Reducing length of production cycles
• Increase number of trading partners
• Enable small businesses to reach global
  marketplace

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Types of e-commerce

• Tangible goods
• Digital goods
• software, music / audio, text
• (news, research), pictures, video
• Services
• stock trades, airline tickets, insurance

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E-Commerce Growth
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E-Commerce Growth
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E-Commerce Growth
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E-Commerce Growth
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Elements of Markets
Information Exchange
Marketing
Contracts Orders
Customer Service
Shipments Payments
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Traditional Model
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Electronic Market Perspectives
Industrys Perspective
Dealers
Manufacturers
Open Markets
Direct Transactions
Low Transaction Cost
Direct Market Access
Electronic Market
Customer
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Impact of Electronic Commerce

• Financial values
• Restructuring of Supply Chain
• Strategic values
• competitive advantage - business procedures
• Customer Relationship Management

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What is Supply Chain Management

• Refers to the coordinated flows between a
  network of suppliers, producers, and customers
• Materials (supplies, finished products, repairs)
• Information (needs, plans, pricing, promotion)
• Finances (payments, credits, coupons)
• Material flow from suppliers and their "upstream"
  suppliers at all levels
• Materials are transformed into semi-finished and
  finished products
• Products are distributed to direct customers and
  their "downstream" customers at all levels

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The Supply chain (Distribution)
Retailer Rs. 120.00
Jobber Rs. 35.00
Customer Rs. 375
Wholesaler (Multilayer) Rs. 60.00
Mango Grower
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What will change in the value chain?
(Benjamin Wigand, 1997)
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Customer Relationship Management

• Process of creating and maintaining
  relationships with business customers or
  consumers
• A holistic process of identifying, attracting,
  differentiating, and retaining customers

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Customer Relationship Management

• Bottom-line
• The use of information-enabled systems for
  enhancing individual customer relationships to
  ensure long-term customer loyalty and retention
• Traditionally CRM means
• Sales Force Automation (SFA)
• Customer Service and Support (CSS)
• Help Desk
• Field Service
• Marketing Automation

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Marketing 75 years ago

• Production a la Adam Smith
• You can have any color as long as its black
  Ford Motor Co.

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Marketing - today
Add the spice of flexibility, courtesy of
robotics, computers

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New approach to Customer Relationship
TO Finding products that are right for each
customer
TURN the process through 90 degrees
FROM Finding customers that are right for each
product
Products 1 2 3 4 5 ..
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Mass Customization B. Joseph Pine

• Mass production
• Cheap to produce
• Efficient to produce
• Uniform features/quality
• one size fits all approach
• Optimize production cost

• Customization
• Expensive to produce
• Inefficient to produce
• Customized features
• tailor made approach
• customer satisfaction

• Mass customization
• Cheap efficient to produce
• Customized features
• tailor made approach
• Optimize production cost customer satisfaction

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Need Creation (attract to website)
anticipate/stimulate
Need Creation
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Personalized experience in B2C e-commerce
Amazon.com
                      
            
Bhaskers Store
Bhaskers Gold Box
Bharat Bhasker, like to read magazines? Like to
receive 10--or 20? Visit Today's Deals.

• Use of Web mining
• cookies to identify user
• analysis of users past behavior and
• peer group analysis for
• personalized messages
• category recommendations
• gold box offers
• Use of clustering, association analysis,
• temporal sequence analysis, etc.

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Case Study for SME
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Consumer Chips Corporation CEO - Wakes Up

• Consumer E-Commerce will jump to Trillion by
  2004?
• Competition is already working on a e-business
  plan.
• A meeting is held gt Enter the e-commerce era in
  SIX WEEKS.
• Should you Panic?
• Decide a name? and register it with InterNIC,
  NSI, APNIC
• Start Planning
• Require Software(s) for
• managing products
• promotions
• customers
• orders
• Additional Software
• Tax issues
• shipping
• payment processing

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Consumer Chips CorporationRealization

• Start from scratch Six weeks? Time to start
  looking for a new job
• Off-the shelf solutions- look for one that
  supports core features and allows you to plug-in
  other software modules to handle complexities of
  taxation, shipping and forms of payments.
• What are those ?
• Intershops epages iCats Lemonade Stand
  Yahoos Stores
• These allow you to pick up a design and pop in
  your products You are ready to Go!
• InterShop 3.0, iCat Professional let you
  customize templates
• ASP, Net.Commerce
• Most of these allow plug and play payment
  processing, Taxware for tax calculations, Tandata
  for shipping information

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Consumer Chips Corporation

• Customer Who are your target customers and what
  do they need? Awareness and advertising
• Merchandising What products will you offer and
  how will you position and display them to your
  customers?
• Sales service How will you answer customers'
  questions and solve their problems?
• Promotions How will you promote merchandise and
  services to give customers incentives to make
  purchases?
• Transaction processing How will you handle
  orders, tax, shipping, and payment processing?
• Fulfillment How will you pass orders to the
  fulfillment center?
• Post-sales service How will you provide customer
  service and answers to order-status questions
  after the sale?
• Marketing data and analysis What information
  about sales, customer, and advertising trends
  will you gather? How will you use it to make
  decisions?
• Brand How will you communicate with customers
  during each of these interactions in a way that
  reinforces your unique company image?

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Consumer Chips Corporation

• Requirement Document
• Displaying products We want customers to be able
  to tell us what kind of computer equipment they
  have. Then we'll tell them what kind of memory
  chips work with their computers. If we know the
  make and model of their equipment, then we can
  recommend chips in 8-MB, 16-MB, 32-MB, and 64-MB
  flavors. Sophisticated customers may already know
  the model number of the memory chip they want,
  but these products are changing all the time.
  We'll need a tool where we can make changes to
  the products we offer in real time.
• Order and transaction processing Customers will
  want to buy more than one item at a time, so
  we'll need to let them build an order before
  checking out. Then we'll need to accept major
  credit cards and calculate tax, shipping, and
  handling charges. Plus, we'll be shipping within
  24 hours of the order, so we'll need to verify
  the credit card information before we accept the
  order.
• Attracting customers We want to use a variety of
  lead-generating tactics, such as buying banner
  ads, registering with search engines, and sending
  direct email to get qualified customers to the
  site. We'll also want to know which of these
  tactics gets the most customers to our site
  so that we can figure out which advertising
  investments make the most sense.

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Consumer Chips Corporation

• Requirement Document
• Fulfillment and customer service Orders that
  arrive on the server need to be relayed to the
  fulfillment center quickly so that we can pick,
  pack, and ship the memory chips before the FedEx
  truck shows up at 5 p.m. We also want to be
  able to let customers get the status of their
  orders so that they don't have to call us.
• Software and hosting We want to host the site
  with a third party. Staying up 24/7 monitoring
  servers is not our idea of fun. We've seen a
  number of e-commerce software packages on the
  market but are confused about which one is right
  for us. Help!

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Consumer Chips Corporation
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Consumer Chips Corporation
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Consumer Chips Corporation
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Consumer Chips Corporation

• Taxes - Dont forget to pay? Sooner or later
  they will catch up? Each state may have different
  laws. Use Tax plug-in such as Taxware on your
  system or use Cybersource to integrate an
  do-demand service bureau, meaning tap into the
  service through Internet.
• Shipping - Tan data provides data about major
  shippers and rates. It also can let you track.
  FedEx and UPS have started direct integration
  services.
• Payment- Credit Cards? Debit Cards? Purchase
  Order? Customer accounts?
• Credit Cards -- When can you transfer money?
  Authentication, Authorization, Settlement (
  Depends on the law of the land)
• CyberCash
• Cash on Delivery (CoD)
• Security Balanket URLs with HTTPS are SSL. Enable
  it, Uses RSA.

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Consumer Chips Corporation

• We want to implement for the cheapest price?
  Specially compared to reported 100 millions
  spent by Barnes and Noble book store
• Three Option
• Buy a ready made Solution that matches your
  specifications- templates and business rules. If
  it doesnt match be careful! Because a solution
  thats force-fit right now will be obsolete soon.
• InterShop 3.0, iCats Pro, and Net.commerce
• Rent space in a Network based ecommerce solution
  - instant store front can be built.
• Intershop epages, iCat Commerce online, and Yahoo
  stores
• Build the system to your specifications - Will
  give you an exact solution, but requires
  expertise, You can have your store identity ,
  uniqueness in a competitive marketplace.
• HTML, PERL/C
• ASP
• Cold Fusion

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Consumer Chips Corporation
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Thats all folks!!

• Questions?
• Comments?