School of International Business

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School of International Business E-Business 1
Module BMG145M2 Lecturer Mr Tony
McCloskey Tel [phone] Email
ta.mccloskey_at_ulster.ac.uk
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School of International Business E-Business 1
Module BMG145M2 Week 1 Introduction to
e-Business
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• Lecture Outline
• Students knowledge and experience of E-business
• Definitions of E-business
• EC and the Organisation
• Classification of EC by Transactions
• IP Based Systems
• Internet Application Tools
• Importance of EC
• The Future of EC
• The Value Chain

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What is E-Business?How do you use
E-business?How might E-business relate to your
future job?
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E-Business Definitions

• E-business refers not only to buying and selling
  but also servicing customers and collaborating
  with business partners, and conducting electronic
  transactions within an organisation.
• Turban et al., 2000
• E-business is all about cycle time, speed,
  globalisation, enhanced productivity, reaching
  new customers and sharing knowledge across
  institutions for competitive advantage.
• Lou Gerstner, IBMs CEO

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(No Transcript)
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EC Definition

• E-commerce involves making business transactions
  via telecommunications networks primarily the
  net. EC can happen between Businesses or between
  customers and businesses.
• Kalakota and Whinston (1997) define EC from the
  following perspectives
• A communication perspective EC is the delivery
  of information, products/services, or payment
  over telephone lines, computer networks or other
  electronic means
• A business process perspective EC is the
  application of technology toward the automation
  of business transactions and work flow.
• A service perspective EC is 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 E.g. delivery lorries can be
  traced on-line or Fed-Ex parcels.
• An online perspective. EC provides the capability
  of buying and selling products and information on
  the Internet and other online services eg E-bay,
  Tescos, Banking, etc.

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Organisational Structure Where does the info.
go?
CEO
Senior Manager A Finance
Senior Manager B Marketing
Senior Manager C Human Resources
Senior Manager A Production
Middle Manager
Middle Manager
Middle Manager
Junior Manager
Junior Manager
Junior Manager
Supervisor
Supervisor
Supervisor
Staff....
Staff....
Staff....
Staff ....
Staff ....
Staff ....
Staff 10
Staff 10
Staff 10
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The Organisation and its Environment What's
Changing?
Customers
Employees
Society
Marketing
Personnel
Production
Finance
Shareholders
Environment
Suppliers
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Traditional to Electronic business
The Dimensions of Electronic Commerce
Electronic Commerce Areas
The Core of Electronic Commerce
Virtual Product
Pure Electronic Commerce
Digital Product
Traditional Commerce
Virtual Process
Physical Product
Digital Process
Physical Process
Physical Agent
Digital Agent
Virtual Player
Choi et al., 1997
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Disintermediation and Reintermediation by EC
Manufacturers
Manufacturers
Manufacturers
Wholesaler
Electronic Intermediaries on the Internet
Traditional Intermediation
Disintermediation
Reintermediation
Distributor
Retailer
Consumers
Consumers
Consumers
EC with Electronic Intermediaries
Traditional Distribution System
Direct Marketing with EC
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Classification of EC by Nature of Transactions

• Business-to-business (B2B) most EC is of this
  type electronic market transactions between
  organisations
• Business-to-consumer (B2C) retailing
  transactions with individual shoppers
  (amazon.com)
• Consumer-to-consumer (C2C) eg selling in
  classified ads (www.classified2000.com)
• Consumer-to-business (C2B) individuals who sell
  to organisations, individuals who seek sellers,
  interact with them and conclude a transaction
• Nonbusiness EC academic institutions,
  not-for-profit orgns, religious orgns, social
  orgns, government agencies to reduce expenses
  (eg improve purchasing) or improve operations and
  customer service
• Intrabusiness EC all internal organisational
  activities usually performed on intranets (see
  later slides)

Turban et al., 2000
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How is all this business being done
electronically?
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Internet Application Tools
Internet Tool Summary E-mail Sending messages
or documents e.g information about a new
product. Internet Relay Chat (IRC) Synchronous
communications tool that allows a text-based
chat between different users who are logged
on at the same time Usenet Newsgroups Electron
ic bulletin board used to discuss a topic. FTP
File Transfer The File Transfer Protocol is used
as a standard for moving files across the
Internet. FTP is available as a feature of Web
browsers.
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Internet Application Tools (contd.)
Internet Tool Summary Gophers Stores and
searches documents on the Internet. Largely
been superseded by the Web, which provides
better searching and more sophisticated
document publishing. Telnet Allows remote
access to computer systems. Push
channel Information is broadcast over the
Internet or an intranet and received using a
Web browser. World Wide Web The World Wide Web
is widely used for publishing information and
running business applications over the Internet.
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Internet Protocol (IP)-Based Systems

• Open standard - allows relatively fluid
  interfacing
• Browser-based interface
• Easy to learn
• Flexible, rapid to implement, and cost effective.

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Intranets and Extranets

• Intranet - is a corporate LAN or WAN that uses
  TCP/IP protocol and is secured behind company's
  firewall. Is a network within a single company
  which enables access to organisation information
  using tools such as web browsers and e-mail.
  Only staff within an organisation can access the
  intranet.
• Extranet - or extended network uses TCP/IP
  protocol to link intranets in different
  locations. Formed by extending the intranet
  beyond a company to customers, suppliers,
  collaborators or even competitors. Security
  provided via tunnels of secured data flows, using
  cryptography and authorisation algorithms to
  provide virtually private network (VPN)
• Firewall - specialised software application
  mounted on a server at the point where the
  company is connected to the Internet. Its
  purpose is to prevent unauthorised access into
  the company by outsiders.

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The Internet, Two Intranets and an Extranet
Company B
Company A
Firewall (Security Filter)
Firewall (Security Filter)
The Internet (Public Access Network)
Intranet (Private Internal Network)
Intranet (Private Internal Network)
Extranet (Private, External Network)
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A Shared Application Extranet
Company
Firewall (Security Filter)
Firewall (Security Filter)
The Internet (Public Access Network)
Intranet (Private Internal Network)
Customer, partner or supplier
Extranet Application
Extranet (Private network based on a shared
application)
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Relationship between Intranets, Extranets and the
Internet
The Internet
Extranet
Intranet
The World
The World
Company Only
Suppliers, Customers, Collaborators
Suppliers, Customers, Collaborators
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Importance of EC Technologies

• A catalyst of fundamental change in structure,
  operations, and
• management of organisations due to
• High-speed, high-volume, numerical computations
• Fast, accurate and inexpensive communication
• Storage of huge amount of information
• Quick access to information
• Increase efficiency and effectiveness of people.

Turban et al., 1999
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Importance of EC Technologies

• Capabilities of EC support the following business
  objectives
• Increase productivity
• Reduce costs
• Improve decision making
• Enhance customer and supplier relationships
• Develop new strategic applications.

Turban et al., 1999
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Importance of EC

• EC technologies can be both reactive and
  proactive in counteracting the
• following business pressures
• Market pressures
• Global economy and strong competition
• Changing nature of the workforce
• Powerful and more sophisticated customers
• Technological pressures
• Technological innovation and obsolescence
• Information overload
• Societal pressures
• Social responsibility
• Ethical issues.

Turban et al., 1999
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The Future of EC

• Bright based on following trends
• Internet usage
• Opportunities for buying
• Purchasing Incentives
• Increased security and trust payment systems
• Efficient information handling
• Innovative organisations
• Virtual communities
• B2B/B2C growth

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The Value Chain
Porter, 1985
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1. Competitive Weapons

• As a survival tool - cannot operate in many
  industries without IT
• Gain advantage over competitors - radically
  change the nature of competition in industries.

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1. Support Management Decision Making

• Timely and accurate information provision
• Essential in a rapidly changing environment
• Complexity of organisations
• EC - a crucial enabler.

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2. Inter-organisational Linkage

• Flow of information is essential
• Multi-functional information flows
• Re-engineering business processes requires
  changes in information flows
• E-linkages
• ERP
• Aggregators
• Auctions etc.

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3. Re-engineer Business Processes

• EC - a major facilitator in re-engineering
  business processes
• Org. redesign and make EC technologies an
  integral part of operations
• Leverage the capabilities of EC.