Business

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Business

• Business is an economic activity concerned with
  production and distribution of goods and/or
  services with the aim to earn profit. It includes
  all those activities which are directly
  /indirectly concerned with production, purchase
  and sale of goods and services. So the
  production, marketing, advertising, warehousing,
  insurance, banking, etc. are all business
  activities.

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E-Business

• The Practice of performing and co-ordination
  critical business process such as designing
  products, obtaining raw material from suppliers,
  manufacturing, selling, fulfilling orders and
  providing services through the extensive use of
  computer communication technologies and
  computerized data.
• E-business does NOT equal the Internet, though
  the growth of the Internet acted as a very
  powerful catalyst

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Work System

• It is a system in which human participants and
  /or machines performs a business process using
  information, technology and other resource to
  produce products and/or service for internal
  external customers

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Information System

• An information system is a work system whose
  business process is devoted to capturing,
  transmitting, storing, retrieving manipulating
  and display information thereby supporting other
  work systems.

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Business Process

• It is a related group of Steps / activities in
  which people use information and other resources
  to create value for internal external
  customers.

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The Value Chain

• The set of processes used by a firm to create
  value for its customers. Includes
• Primary processes directly create the value as
  perceived by the customers
• Support processes indirectly create value by
  supporting the primary processes

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EDI ELECTRONIC DATA INTERCHANGE Electronic data
interchange (EDI) was one of the earliest uses of
information technology for supply chain
management. EDI involves the electronic exchange
of business transaction documents over the
Internet and other networks between supply chain
trading partners (organizations and their
customers and suppliers). Data representing a
variety of business transaction documents (such
as purchase orders, invoices, requests for
quotations, and shipping notices) are
automatically exchanged between computers using
standard document message formats. Typically, EDI
software is used to convert a companys own
document formats into standardized EDI formats as
specified by various industry and international
protocols. Thus, EDI is an example of the almost
complete automation of an e-commerce supply chain
process. EDI over the Internet, using secure
virtual private networks , is a growing B2B
e-commerce application.
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E-commerce

• The process of buying, selling and marketing the
  Products / Services using internet Technologies.
  Any internet visitor can access information about
  a product, place an order, make electronic
  payments to commit the order, and in some cases
  can receive products or services using computers.
  
• E-commerce is the part of e-business that the
  customer experiences directly

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E-commerce Categories

• Business to Business (B2B)
• Sales of goods and services among business
• Business to Customer (B2C)
• Retailing products and services
• Customer to Customer (C2C)
• Individuals use web for sale and service
• Government to Customer (G2C)

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E-Commerce Architecture

• Most of the information technologies and
  Internet technologies are involved in e-commerce
  systems as clear from the following figure ,
  which gives an example of the technology
  resources required by many e-commerce systems.
  The figure illustrates some of the hardware,
  software, data, and network components used by a
  compny to provide business-to-business (B2B)
  online auction e-commerce services.

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Advantages of E-Commerce

• The advantages of e-commerce allow a business of
  virtually any size that is located virtually
  anywhere on the planet to conduct business with
  just about anyone, anywhere.
• The power of e-commerce allows geophysical
  barriers to disappear, making all consumers and
  businesses on earth potential customers and
  suppliers.

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Advantages of E-Commerce

• The advantages of e-commerce allow a business of
  virtually any size that is located virtually
  anywhere on the planet to conduct business with
  just about anyone, anywhere.
• Imagine a small olive oil manufacturer in a
  remote village in Italy selling its wares to
  major department stores and specialty food shops
  in large metropolitan markets of various parts of
  the world . The power of e-commerce allows
  geophysical barriers to disappear, making all
  consumers and businesses on earth potential
  customers and suppliers.

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Advantages of E-Commerce

• Barrier to Entry are Low
• Global Presence / Global Choice
• Improved Competitiveness / Quality of Service
• Mass Customization / Personalized Products and
  Services
• Substantial Cost Savings / Substantial Price
  Reductions
• Novel Business Opportunities / New Products and
  Service

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E-Commerce Risks

• Confidentiality
• Integrity
• Availability
• Authentication Nonrepudiation

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Confidentiality Potential consumers are concerned
about providing unknown vendors with personal,
sometimes sensitive information. Connecting to
the internet via a browser requires running
software on the computer that has been developed
by some one unknown to the organization. Integrit
y Data, both in transit and storage, could be
susceptible to unauthorized alteration or deletion
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Availability The internet holds out the promise
of doing business on a 24-hour, seven days-a-week
basis. Hence, high availability is important with
any systems failure becoming immediately apparent
to customers or business pattern. Authentication
Nonrepudiation The parties to an electronic
transaction should be in a known and trusted
business relationship, which requires that they
prove their respective identities before
executing the transaction. Then, after the fact,
there must be some manner of ensuring that the
transacting parties cannot deny that the
transaction was entered into and terms on which
it was completed.
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E-Commerce Risk
Sabotage or DefacementUnauthorized
accessDegradation of performance
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Sabotage or Defacement All the business
transactions and deals going on through online
methods, you being a businessman can also face
the problem of attacks. There are different
malicious attacks like virus, worms and Trojan
horse, that your system can be a pray to. You
should always have a good anti-virus and keep it
updated to impede any such kinds of attacks.
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Unauthorized access While you may not be aware
of and trust your employees the best, you might
never know who accesses your data and account
illegally. Unauthorized access to your data can
also be done by outsiders. Poor configuration of
systems and poor encrypted transmission are few
factors that can let others access your
confidential business data illegally. You must
also be careful to choose strong passwords, and
avoid hint questions like maiden name of your
mother or school you went to. In most cases
you can form your own question. Do that wherever
applicable and if not try choosing your hint
questions in a way that will not let anyone guess
it or know it. .
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Degradation of performance Machines make our
life easier, and technology makes it luxurious.
But even technology is bounded by certain
barriers. Busy network, with heavy traffic is a
common problem. Hardware and software can also
cause you troubles at any time yes, might also
be when you are on a major transaction. Your
processor speed and data storage might also pose
as a problem for degradation of your systems
performance.
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Internet Business Model

• Virtual storefront model
• Virtual community
• Online marketplace
• Portal model
• Auction model
• Dynamic pricing model

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E-Business

• The Practice of performing and co-ordination
  critical business process such as designing
  products, obtaining raw material from suppliers,
  manufacturing, selling, fulfilling orders and
  providing services through the extensive use of
  computer communication technologies and
  computerized data.
• E-business does NOT equal the Internet, though
  the growth of the Internet acted as a very
  powerful catalyst

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E-business VS E-commerce

• e-Business
• A company that has an online presence
• e-commerce businesses allow customers to buy,
  sell, and trade over the Web

E-Business
E-Commerce
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Internet Technology and Digital Firm

• Information technology infrastructure
• easy to use
• Direct communication between trading partner
• disintermediation

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Advantage of IT and Digital Firm

• Round clock serviced 24x7
• Extended distribution channel
• Reduce transaction cost
• Cost of searching buyer, seller

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E-business

• What do we want
• Grow businesses
• Improve profitability
• Reduce expense
• Remain competitive
• Attract customer

• But today, there is
• Information overload
• Too little time
• Other priorities
• Too many details

Time Effort
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Why e-business

• Benefit of bringing a business to the internet
• High-quality customer service
• Improve personalization
• supply-chain management

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Business Model Examples

• Type 1 Information only
• Reduce expense
• Enhance customer relationships
• Support your business
• (INFORMATIONAL WEBSITES)

• Type 2 Directly generate revenue (transactional)
• Selling products online
• Selling advertisement
• (TRANSACTIONAL WEBSITES)

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Business Model

• Defines an enterprise
• Describes how the enterprise deliver products or
  services
• Shows how the enterprise create worth / value in
  the products or services.

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Internet Business Model

• Virtual storefront model
• Virtual community
• Online marketplace
• Portal model
• Auction model
• Dynamic pricing model

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Storefront Model

• What many people think of when they hear the word
  e-business
• A basic form of e-commerce in which the buyer and
  the seller interact directly
• Storefront model enables merchants to sell
  products on the Web
• Transaction processing, security, online payment,
  information storage

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Storefront Model

• E-commerce allows companies to conduct business
  24-by-7, all day everyday, worldwide
• Many leading store front model companies are B2C
  companies
• An e-commerce storefront should include
• Online catalog of products
• Order processing
• Secure payment
• Timely order fulfillment

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Shopping Cart Technology

• Shopping Cart
• An order-processing technology allowing customers
  to accumulate lists of items they wish to buy as
  they continue to shop
• Shopping cart is supported by
• Product catalog
• Merchant server
• Database technology
• Combine a number of purchasing methods to give
  customers a wide array of options

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Online Shopping Malls

• Wide selection of products and services
• Offers greater convenience than shopping at
  multiple online shops
• Consumers can make multiple purchases in one
  transaction

Bestbuy.com
Cdnow.com
Etoy.com
Mall.com
Amazon.com
Eddiebauer.com
Jcrew.com
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Virtual Community

• MSN
• Yahoo Messenger
• Twitter
• Facebook

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Marketplace

• Catalog
• Sourcing
• Automated purchasing
• Processing and fulfillment

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Auction Model

• Online auction sites
• Act as forums through which Internet users can
  log-on and assume the role of either bidder or
  seller
• Collect a commission on every successful auction
• Sellers post items they wish to sell and wait for
  buyers to bid

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Auction Model

• Reserve price
• The minimum price a seller will accept in a given
  auction
• Reverse auctions
• Allow the buyer to set a price as sellers compete
  to match or even beat it

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Portal Model

• Portal sites
• Give visitors the chance to find almost
  everything they are looking for in one place
• Horizontal portals
• Portals that aggregate information on a broad
  range of topics
• Yahoo, AltaVista, hotbot, Google, ask jeeves,
  gomez, sanook
• Vertical portals
• Portals that offer more specific information
  within a single area of interest
• WebMD.com, IMDB.com, FirstGov.com

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Dynamic Pricing Models

• The Web has changed the way products are priced
  and purchased
• Comparison pricing model
• Web sites using shopping technology to find the
  lowest price for a given item
• techsbargain, bottomdollar, deja, dealtime
• Demand-sensitive pricing model
• Group buying reduces price as volume of sales
  increase
• Mercata, mobshop

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Dynamic Pricing Models

• Name-your-price model
• Name-your-price for products and services
• Priceline
• Bartering Model
• Individuals and business trade unneeded items for
  items they desire
• Allows individual and companies wishing to sell
  products to post their listing

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Dynamic Pricing Models

• Rebate Model
• Sites offer rebates on product at leading online
  retailers in return for commission or advertising
  revenues
• eBates, eCentives
• Free offering model
• Free products and services generate high traffic
• Freemerchant, Start Sampling, FreeSamples

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CRM
Managing the full range of the customer
relationship involves two related objectives ? A
single, complete view of every customer of a
business at every touch point and across all
channels ? To provide the customer with a
single, complete view of the company and its
extended channels .
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CRM
CRM uses information technology to create a
cross-functional enterprise system that
integrates and automates many of the
customer-serving processes in sales, marketing,
and customer services that interact with a
companys customers. CRM systems include a family
of software modules that provides the tools that
enable a business and its employees to deliver
fast, convenient, dependable, and consistent
service to its customers.
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CRM
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THREE PHASES - CRM
Acquire. CRM software help to acquire new
customers by doing a superior job of contact
management, sales prospecting, selling, direct
marketing, and fulfillment. The goal of these CRM
functions is to help customers to perceive the
value of a superior product offered by an
outstanding company.
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THREE PHASES - CRM
Enhance . Web-enabled CRM account management
and customer service and support tools help to
keep customers happy by supporting superior
service from a responsive networked team of sales
and service specialists and business partners. In
addition, CRM sales force automation and direct
marketing and fulfillment tools also help
companies in cross-selling and up-selling to
their customers, thus increasing their
profitability to the business. The value the
customers perceive is the convenience of one-stop
shopping at attractive prices.
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THREE PHASES - CRM
Retain . CRM analytical software and databases
help a company proactively identify and reward
its most loyal and profitable customers to retain
and expand their business via targeted marketing
and relationship marketing programs. The value
the customers perceive is of a rewarding
personalized business relationship with their
company.
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• BENEFITS - CRM
• CRM allows a business to identify and target its
  best customersthose who are the most profitable
  to the business so they can be retained as
  lifelong customers for greater and more
  profitable services.
• It makes possible real-time customization and
  personalization of products and services based on
  customer wants, needs, buying habits, and life
  cycles.
• CRM can also keep track of when a customer
  contacts the company, regardless of the contact
  point.
• In addition, CRM systems can enable a company to
  provide a consistent customer experience and
  superior service and support across all the
  contact points a customer chooses.
• All of these benefits would provide strategic
  business value to a company and major customer
  value to its customers.

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CRM - FAILURE The common wisdom of why CRM
systems fail includes Lack of senior
management sponsorship Improper change
management Elongated projects that take on too
much, too fast Lack of or poor integration
between CRM and core business systems Lack of
end-user incentives leading to poor user adoption
rates
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A successful SCM strategy is based on accurate
order processing, just-in-time inventory
management, and timely order fulfillment. supply
chain management helps a company get the right
products to the right place at the right time, in
the proper quantity and at an acceptable cost.
The goal of SCM is to manage this process
efficiently by forecasting demand controlling
inventory enhancing the network of business
relationships a company has with customers,
suppliers, distributors, and others and
receiving feedback on the status of every link in
the supply chain.
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To achieve this goal, many companies today are
turning to Internet technologies to Web-enable
their supply chain processes, decision making,
and information flows. Supply Chain Management
is a cross-functional inter-enterprise system
that uses information technology to help support
and manage the links between some of a companys
key business processes and those of its
suppliers, customers, and business partners. The
goal of SCM is to create a fast, efficient, and
low-cost network of business relationships, or
supply chain , to get a companys products from
concept to market. Supply chain management
software and Internet technologies can help
companies reengineer and integrate the functional
SCM processes that support the supply chain life
cycle.
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ERP ENTERPRISE RESOURCE PLANNING ERP serves as
a cross-functional enterprise backbone that
integrates and automates many internal business
processes and information systems within the
manufacturing, logistics, distribution,
accounting, finance, and human resource functions
of a company. Enterprise resource planning is a
cross-functional enterprise system driven by an
integrated suite of software modules that
supports the basic internal business processes of
a company. ERP gives a company an integrated
real-time view of its core business processes,
such as production, order processing, and
inventory management, tied together by the ERP
application software and a common database
maintained by a database management system.
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The major application components of enterprise
resource planning demonstrate the cross
functional approach of ERP systems.
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The business processes and functions supported by
the ERP system implemented by the Colgate-
Palmolive Company.
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ERP BENEFITS Quality and efficiency . ERP
creates a framework for integrating and improving
a companys internal business processes that
results in significant improvements in the
quality and efficiency of customer service,
production, and distribution. Decreased costs
. Many companies report significant reductions
in transaction processing costs and hardware,
software, and IT support staff compared to the
nonintegrated legacy systems that were replaced
by their new ERP systems.
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ERP BENEFITS Decision support . ERP
provides vital cross-functional information on
business performance to managers quickly which
significantly improve their ability to make
better decisions in a timely manner across the
entire business enterprise. Enterprise agility
. Implementing ERP systems breaks down many
former departmental and functional walls of
business processes, information systems, and
information resources which results in more
flexible organizational structures, managerial
responsibilities, and work roles, and therefore a
more agile and adaptive organization and
workforce that can more easily capitalize on new
business opportunities.
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Typical costs of implementing a new ERP system.