ISM 50 - Business Information SystemsLecture 8Instructors: Mary Doyle, Geoff RyderUC Santa CruzApril 22, 2009Class announcementsAssignment 3 due Monday 4/27 (on web site)Project Proposal due TodayReading for next classMesserschmitt Ch 4 Student Presentations Monday 4/27(News) Thomas RowleyOne more slot availableToday is your last chance to sign up for presentation vs. news folios (see signup sheet)Today News presentation Final review of Cisco ECommerce Alibris presentation Alibris CaseCisco Review Team of people from all types of departments“cross-functional team” Was this necessary?Cisco Review Vendor SelectionKPMG consultantsOracle ERPGood selection? Why were they “hungry?”Cisco Review Top Management made it a priorityWhat effect did this have?Cisco Review Rapid Iterative Prototyping?What was this?Was it a good strategy?Was aggressive pace good, or reckless?Cisco review Project justificationDid they do a RoR or NPV analysis to justify the project?Cisco SummarySuccess FactorsCross-Functional Team of top people People from across the company involvedHungry Vendors Oracle and KPMG needed this to succeedStrong Support from Top ManagementFavorable Hardware ContractRapid PrototypingAggressive paceGood management or luck?Challenges Poor testing Strategy Inadequate Hardware Software required more modifications than originally hoped.Cisco SummaryChallenges Poor testing Strategy Inadequate Hardware Software required more modifications than originally hoped.Cisco SummaryWhat did it cost?Costs Beyond original budget:Non-IT Personnel In Project 80 personnel X 8 months X 160 hours / month X 100 hour = $10 millionIT-Personnel beyond original 20 80 personnel X 4.5 months X 160 hours / month X 100 hour =$5.7 millionActually cost more than $15 million more than theoriginal budget of $15 million!Was this really a success?!E-Commerce Major CategoriesConsumer (B2C)Example: Amazon.com sells books to consumers.Inter-consumer (C2C)Example: e-bayInter-enterprise (B2B)Example: online brokerage to bankingE-Commerce Principal StepsMatching buyers and sellersNegotiating termsConsummationCustomer serviceMatching Buyers and Sellers CatalogSeller publishes a catalog of goods and servicesWilling buyers access at their initiative AdvertisingAttach advertisements to other publications or web pagesExample: Spam Intermediary RecommenderExamples?Intermediaries? What rolls should intermediaries play in the networked age? What intermediary rolls may change or even be eliminated?Travel Agents?Others?Negotiating Terms Fixed price Price based on buyer characteristicsHistoryDemographicsBehaviorSequential versioningExamples?(Airlines, Hotwire, TurboTax) AuctionsConsummation Order FulfillmentSeller conveys goods to buyer PaymentBuyer conveys payment to seller Security?Need to ensure both fulfillment and Payment occur.Payment options(Topic of Chapter 14)Account transfer authorizationCredit/debit cardDigital cashMicropaymentsLow transaction costsConsolidationExamples (toll roads, dining hall charges)Customer Support Often need to provide post-sales service to the customerIn personOver telephoneVia NetworkEmailRemote conferencingFAQ boardAutomatic distribution of new versions or patchesCustomer Relationship ManagementThe challenge of maintaining the relationship with a customer is called Customer Relationship Management(CRM)CRM software applications seek to provide customer facing employees a complete view of each customer.What they’ve bought and returned.What problems they’ve reported.What other agents they’ve talked to in the past.An opportunity to add value.E-Commerce Major CategoriesConsumer (B2C)Inter-consumer (C2C)Inter-enterprise (B2B)Consumer e-commerce (B2C) What have you bought on the Internet, or what do you buy most often? What are the advantages and disadvantages compared to a retail store or direct mail catalog?Some Advantages For the ConsumerCheck prices at many vendors with minimal effortPrice many optionsAnonymityOrder tracking For the BusinessGlobal reachAutomate order taking (cost savings)Price DiscriminationSome cautions Security of transactions (https://) Shipping/handling/return costs and policies Stability of sellerInter-Consumer (E-commerce)Prime Example E-BayOther examples?What value does something like E-bay add over a simple classifieds listing like craigslist?And - how does craigslist make money?Inter-Enterprise E-Commerce (B2B)Procurement One enterprise purchases goods or services from anotherDirect Procurement Ongoing, consistent, and scheduled procurementThe relationship between firms involved in direct procurement often called a Supply ChainThe set of problems associated with managing a supply chain is calledSupply Chain Management(SCM)Source:MIT Engineering Systems DeptSCMNeed to manage the procurement of parts Don’t run out of any one Don’t order too many Order far enough in advanceIdeally Know in advance# carsfeaturesTireManufacturerSteelMfg.CoalMineIron OreMineWindow Mfg…Car PlantSCMMemoryManufacturerHard DriveManufacturerCase ManufacturerPowerSupplyManufacturerCPUManufacturerMotherboard ManufacturerFinal AssemblyManufacturerThousands of orders per day, each with different requirements!Adjusting orders from suppliers constantly according to demandMinimal inventories Cut costsMuch more sensitive to errors or disruptionsmass customization requires sophisticated SCMNetworked Computing in direct Procurement History predates InternetElectronic Data Interchange(EDI) Exchange order information between firms involved in direct procurementUsually large firms who could who afford proprietary communication linksInitially order and invoiceExisted since 70’sFinancial EDI(FEDI) later added EFT payment capabilityNetworked Computing in direct Procurement XML (Extensible Markup Language) is another data interchange format making an impact on inter-enterprise commerce We will talk more about this later in the quarter.Indirect Procurement Sporadic purchase of goods and services to support organizational objectivesExample: Office FurnitureStudent
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