Introduction to Electronic Commerce: OverviewElectronic Commerce (EC)EC ObjectivesHow are Businesses using E-Commerce?Business using E-Commerce (cont’d)EC EnvironmentCategories of EC - B2CCategories of EC – B2BCategories of EC – B2B (cont’d)Categories of EC - B2GEC ActivitiesEC & Transformation of BusinessPhases of E-CommerceBusiness Models- Characteristics and ExamplesEC Models -IntroductionEC ModelsEC Models (cont’d)Slide 18Slide 19Slide 20Slide 21Slide 22Slide 23E-Commerce ProcessE-Commerce Process (cont’d)Slide 26E-Commerce TechnologyE-Commerce InfrastructureThe InternetSearch EnginesAccess SecurityCryptographic SecurityElectronic PaymentsMultimediaData Mining1Introduction to Electronic Commerce: Overview Yelena YeshaMichael I. Shamos2Electronic Commerce (EC) Is an area of study that is concerned with developing methodologies and systems that support Creation of information sources;Effective and efficient interactions among sellers, consumers, intermediaries and producers;Movement of information across global networks.3EC ObjectivesIn general - Increasing the speed and efficiency of business transactions and processes and improving customer relationships and services4How are Businesses using E-Commerce?Business can implement new sales and marketing through the use of WWWThe WWW provides electronic means for organizations to display materials such as product catalogs, price lists, …Internet security issues are resolved, businesses are selling more and more product online, direct to their customers5Business using E-Commerce (cont’d)E-Commerce technologies can be used in any environment where documents are exchanged between organization including procurement/purchasing, finance, trade and transport, law and revenue/tax collection.E-Commerce has potential benefits for both suppliers and buyers in reducing paperwork and administrative lead times and allowing agencies to adopt more efficient purchasing practices.6EC EnvironmentVast amount of multimedia data; Distributed, autonomous, and heterogeneous information sources;Supports decision making;The Internet as an infrastructure.7Categories of EC - B2CIs built on mutual distrust; Has a small volume of transactions;Requires a ubiquitous low-cost infrastructure;Provides an opportunity for personalization and customization.8Categories of EC – B2BGrowth of B2B marketplaces and exchanges;Growth in complexity;Currently at a saturation point.[email protected].Currently, 98% of medium and large firms are connected to the Internet and 41% are engaged in EC;70% engaged in EC by 2003 Projected by eMarketer.Full range of business automation:Supply chain management, negotiation, etc.9Categories of EC – B2B (cont’d) Worldwide B2B revenues will grow from $185 billion in 2000 to $1.26 trillion in2003. eCommerce: B2B Report, eMarketer.0.00200.00400.00600.00800.001000.001200.001400.001998 1999 2000 2001 2002 2003B2 Revenue,worldwide10Categories of EC - B2GMore restrictive due to government regulations;In the US, the Federal Acquisition Streamlining Act (FASA) has mandated that all government agencies conduct bidding via EDI by late 1999.11EC ActivitiesEC involves various business activities such as:Online marketing;Order processing;Payment;Delivery (information goods) or delivery management;Technical support/Customer care.12EC & Transformation of BusinessTransformation occurs through:Globalization;New products/services approaches;Greater speed to market;Better customer acquisition and retention through customization and personalization;Enhanced cost competition.13Phases of E-CommerceIncremental Approach:improve existing process for greater efficiency and effectiveness (E.g.. Banks)Strategic Transformation:Go beyond improvement ( think radical/new way of doing)Globalization:The last stage in EC. Host of issues need to be addressed (legal, etc)14Business Models- Characteristics and ExamplesBusiness ModelDescription/architecture of business activities;Identifies potential benefits (revenues) from various activities;Must work hand-in-hand with marketing strategy.ExamplesRetailing of goods and services;Supply chain management, requisitions, etc.;ASP (Application Service Provider);Banking/financial services, and more.15EC Models -IntroductionEC can either compliment traditional business;represent a whole new way of doing business.Issue is what is an appropriate model and marketing strategy.16EC ModelsPrimary Models:E-ShopTraditional web marketingLow cost passed to consumer24 hr availabilitySee www.hotwired.com/e-business/tutorials for excellent tutorial on setting up an e-shop17EC Models (cont’d)E-Procurement:Attracts large number of suppliers;Automated tender processing;Lower cost for both parties;Major corporations/public entities involvement.18EC Models (cont’d)E-AuctionElectronic bidding with contacting, payment and delivery;Buyers benefit from competitive costs and lower lot size;Buyers benefit through reduced stock requirement and lower sales overhead.19EC Models (cont’d)E- MallCollection of e-shops;Enhanced under a common umbrella( brand name);Benefits through common user interface and “spill over” from neighbors.20EC Models (cont’d)3rd Party Market PlaceContracting out of web marketing to a 3rd party;Allows for common marketing front end and transaction support for multiple businesses.Virtual CommunitiesA growing trend;Allows members to add their profiles to the web company.21EC Models (cont’d)Value chain Providers/IntegratorsSupport part of the value chain. E.g. electronic payments ( banks);Add value by integrating several steps of value chain.Collaboration PlatformProvide environment/specialist tools for collaboration;E.g. collaborative design.22EC Models (cont’d)Information BrokersInformation search (Google);Derive revenue through use (LEXIS) or advertising(Yahoo).ASP23EC Models (cont’d)Banking/Financial servicesAccount management tools;Simplified bill payment system;Automated customer service;Availability of quotes and charts representing stock market information;Visualization and decision support tools for investment.24E-Commerce ProcessBuyers and sellers find each otherCommunication
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