Week 3 Electronic Commerce MIS 2101 Management Information Systems Douglas M Schutz Based on material from Information Systems Today Managing in the Digital World Leonard Jessup and Joseph Valacich Pearson Prentice Hall 2007 Also includes material by David Schuff Paul Weinberg Cindy Joy Marselis Munir Mandviwalla and Mart Doyle There is no physical analog for what Amazon com is becoming Jeff Bezos Cofounder and long time CEO of Amazon com 2 Learning Objectives Define electronic commerce Discuss how it has evolved and the strategies that companies use to compete in cyberspace Explain the differences between The Internet Extranets Intranets Describe emerging trends in electronic commerce Discuss regulatory issues What is Electronic Commerce also referred to as e commerce or EC The online exchange of 1 2 3 between 1 firms 2 firms and customers 3 customers 4 Electronic Commerce of Total Retail Sales Globalization 3 0 5 For Seasonal Variation Most Common Types of E Commerce What are examples of the types of E Commerce Below Business to consumer B2C Business to business B2B Business to employee B2E Consumer to consumer C2C 6 Key Web Capabilities Leveraged by E Commerce 1 Information Dissemination 2 Integration 3 Mass Customization 4 Interactive Communication 5 Collaboration 6 Transaction Support Key Web Capability 1 Information Dissemination Firms have access to customers independent of location Increased geographical reach through virtual storefronts Economical medium for marketing products and services 5 8 8 Key Web Capability 2 Integration Integration of information via Web sites and other mechanisms Integration of processes among multiple companies Real time access to personalized information Efficient Markets 9 Examples of Integration Airline reservations Make reservations through any airline travel agency or online The reservation can involve multiple airlines Use a cell phone voice or browser Change reservations through any airline travel agency or online Amazon purchase products from other companies through Amazon ATMs 10 Key Web Capability 3 Mass Customization Tailoring for meeting particular customers needs on a scale Timbuk2 com Custom Messenger Bag Builder 11 Key Web Capability 4 Interactive Communication Immediate feedback between company and customers What types of features are used in Interactive communication Best Buy Geek Squad 24 hour computer support 12 Key Web Capability 5 Collaboration Virgin Entertainment Group Microsoft SharePoint Managers now have more time selling products and training employees Head office now has more time for strategic planning 13 Key Web Capability 6 Transaction Support Internet and the Web Reduced transaction costs Enhanced operational efficiency Dell automated transaction support Cost savings per sale What is Disintermediation 14 Question What do we mean when we say an organization is Brick and Mortar Click and Mortar Click only Examples E Commerce Business Strategies Differentiated based on levels of physical virtual presence 16 Learning Objectives Define electronic commerce Discuss how it has evolved and the strategies that companies use to compete in cyberspace Explain the differences between The Internet Extranets Intranets Describe emerging trends in electronic commerce Discuss regulatory issues Question What is the difference between 1 The Internet 2 An Extranet 3 An Intranet 1 The Internet A network of networks Computers and other devices capable of communicating The infrastructure that connects them fiber optics copper modems routers microwave etc The software tools and standard protocols that make communication possible It is more than the World Wide Web As a result of the standards You can retrieve material using a browser from any Web Server regardless of technology or location You can send email to any email account regardless of technology or location Dissimilar computers at multiple locations can function together to complete a process 20 2 Extranet Extranet uses Internet technology to conduct business between firms for Business to Business B2B electronic commerce Nearly all Fortune 1 000 companies deploy some type of B2B applications Boeing 1 000 authorized business partners Electronic Data Interchange EDI and Web Services are two technologies used for Extranets 21 Question What is EDI and what do companies do with it Electronic Data Interchange EDI Used for B2B applications prior to the introduction of Web Services Still used today Extranet System Architecture Web Services Example The Gap BigStore co m Client Shopping Application ck on o s t a ti n I firm n co Stock DB ProductLookup Application Cr co edi nfi t c rm ard at ion GiantBank Account DB Credit verification application 25 3 Intranet Intranet uses an internal private network using Internet based Web technologies for the secured transmission of information within an organization Business to employee B2E electronic commerce Boeing More than 1 million pages 200 000 employees 26 Intranet System Architecture Intranet Applications Training Boeing 200 000 employees get trained Quality eTraining program Business improvements What benefits can be realized using intranet applications for training 28 Intranet Application Collaboration Boeing Information shared between employees across the world What benefits can be realized using intranets for collaboration in project management Learning Objectives Define electronic commerce Discuss how it has evolved and the strategies that companies use to compete in cyberspace Explain the differences between The Internet Extranets Intranets Describe emerging trends in electronic commerce Discuss regulatory issues Questions For each of the following emerging trends What does this mean to you personally As a business professional are there any interesting opportunities Types of Consumer to Consumer C2C E Commerce Forward auction Sellers post goods or services for sale Buyers bid on these items Reverse auction Buyers post a request for quote RFQ Seller proposes a bid 32 E Auction Fraud E auctions marred with more fraud than any other Internet activity 42 of all Internet fraud related complaints Average loss 1 155 per complaint Types of e Auction fraud Bid luring Luring bidders from a legitimate auction to buy the same item at a lower price Reproductions Not an original as advertised Bid shielding Bidding on your own items to inflate the price Shipping fraud Jacking up shipping handling fees Payment failure Buyer doesn t pay Nonshipment