E-Commerce: Challenges and Opportunities in the 21st Century

1
E-Commerce Challenges and Opportunities in the
21st Century

• Martin Bariff Paul Prabhaker
• Stuart Graduate School of Business
• Illinois Institute of Technology
• Chicago IL
• CFIT Conference
• September 18, 2000

2
Project Objectives

• E-Commerce investment/return
• Click and mortar affinity
• Financial controls

3
Research Sites

• Classified Ventures
• E-Stamp
• IBM
• Motorola
• National Semiconductor

• Oracle
• State Street
• Toronto dominion
• United Stationers

4
Key Findings

• Case Study Examples

5
Business Models, Metrics, and Transformation

• Toronto Dominion
• Oracle
• Motorola

6
Toronto Dominion Bank
7
Toronto Dominion Bank
"Business is becoming commoditized.what is our
competitive advantage ? Increasingly, it is the
channel rather than the products" Heather
Conway, Senior VP Toronto Dominion Bank
8
Toronto Dominion Bank
9
Toronto Dominion Bank

• E-COMMERCE METRICS
• Portion of stock value attributable to
  e-commerce
• 50 of TDs stock value is due to
  e-commerce !!
• Revenue-per-employee
• doubled in four years
• Business Growth Rate
• with e-commerce 12 without e-commerce
  7
• Relationships with external constituencies

10
Toronto Dominion Bank

• TD Marketsite
• TD e-procurement to registered suppliers
• expect 60-100 million annual savings
• Commercial small business customers
• Purchase from suppliers
• Auction services
• Access to Commerce One Global Trading Group

11
Oracle e-business Blueprint
Customer-side
Internal
Supply-Side
12
By Becoming an E-Business
Oracles 2 Billion Dollar Savings Target
Previous New Goal Mil Goal
Mil Consolidate IT 200
250 Sell Side 550
1,450 Buy Side 150
200 Inside 100
100 Total 1,000 2,000
Note Based on Oracle estimates.
13
Motorola

• E-Commerce philosophy
• Cultural Barriers
• Personal Communications Sector
• Business plan
• Web store

14
Channel Conflict

• Classified Ventures
• Toronto Dominion
• Motorola

15
Classified Ventures, Inc.
16
Supply Chain Efficiencies

• Motorola
• IBM
• Oracle

17
Lessons Learned

• A better mouse-trap approach does not work in
  on-line business.
• E-commerce will become a mainstream channel for
  traditional off-line businesses.
• E-commerce does not commoditize products,
  contrary to popular opinion. It will, in fact,
  encourage product differentiation.
• Classified Ventures

18
Lessons Learned

• E-Commerce is, at the core, a cultural /
  behavioral breakthrough. The technological
  innovations are actually fueled by this cultural
  / behavioral breakthrough.
• E-commerce is a cultural change enabled through
  communications.
• Beyond organizational culture, e-commerce
  challenges traditional market channels and
  technological systems.
• Manage the advances in business capabilities, not
  the technological changes.
• Time and information are key drivers of
  e-commerce. A key to successfully e-cizing an
  organization is to leverage time and information
  within the corporation, across departmental,
  functional and product boundaries.
• E-Commerce rapidly dismantles barriers to trade
• MOTOROLA

19
Lessons Learned

• As e-commerce grows, the cost of information
  acquisition and processing is driven down.
• Benefits to e-commerce can be realized to the
  extent that the entire value-chain accepts and
  incorporates e-commerce processes.
• Internal acceptance and adoption of e-commerce
  practices are crucial
• National Semiconductor

20
Lessons Learned

• There is no aspect of any business that is too
  small for e-commerce to tackle cost-effectively.
• Toronto Dominion