1. Week 11: Electronic Commerce and Crowdsourcing MIS5001: Management Information Systems David S. McGettigan Adapted from material by Arnold Kurtz, David Schuff, and Paul Weinberg

2. Agenda Prior Lecture Recap Electronic Commerce Crowdsourcing Next Week 2

3. Prior Lecture Recap

4. 4 Role of the CIO Most Time Spent  Collaborating with CXOs  Making Strategic Decisions  Working on Strategic Business Planning Obstacles to Success  Overwhelming Project Backlog and Requests  Ability to Execute Remains a Top Concern  Focus on Cost Cutting Opportunities  Using IT to Enable / Standardize Business Processes  Measuring Success and Proving Business Value A Modern CIO  Deputies Run Operations  Focus on Strategy and Execution Source: www.cio.com: “State of the CIO”www.cio.com

5. eBusiness I think the Internet is uniquely suited to this free market idea: that everyone on the Internet that exchanges the traffic back and forth, big or small, we all need each other. Pete Ashdown, Utah Geek Dinner Speech, 08-22-06 founder and CEO of Utah 's first independent and oldest Internet service provider, XMission

6. 6 Internet: Features and Business Value Management Information Systems Managing the Digital Firm (Ninth Edition) (Ninth Edition) Copyright 2006 Prentice Hall All rights reserved

7. 7 Management Information Systems for the Information Age (Fourth Edition) (Fourth Edition) Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Internet: Creation of New Markets

8. 8 Business to Consumer (B2C) E-tailer - an Internet retail site. Pure plays - Internet retailers without a physical store. Clicks–and-mortar retailers - both an Internet presence and one or more physical stores. M-commerce - describes e-commerce conducted over a wireless device such as a cell phone or PDA. Management Information Systems for the Information Age (Fourth Edition) (Fourth Edition) Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved

9. 9 B2C - Key Success Factors Product Type  Commodity  Digital Marketing Mix  Search Engines  Online and Offline Ads Execution  Customer Service Monitor Competition and Threats  Cyveilance Corp

10. 10 B2C – Competition Ford Motor Example

11. 11 B2C – Threats Ford Motor Example

12. 12 B2C – Search Engines Ford Motor Example

13. 13 B2C – Search Engines Best Buy Example

14. 14 Direct materials - used in production in a manufacturing company or for retail sales. Indirect materials - necessary for running a corporation, but do not relate to the primary business activities. Electronic data interchange (EDI) - computer-to- computer transfer of transaction information. B2B – Corporate Purchasing Management Information Systems for the Information Age (Fourth Edition) (Fourth Edition) Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved

15. 15 B2B – Indirect Materials www.staples.comwww.boise.com What is the difference in these business models?

16. 16 B2B - Commerce B2B marketplaces - Internet-based services that bring together buyers and sellers. Reverse auction - the process in which a buyer posts its interest in buying a certain quantity of items, and sellers compete for the business by submitting successively lower bids until there is only one seller left. Management Information Systems for the Information Age (Fourth Edition) (Fourth Edition) Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved

17. 17 C2C – Classic Example

18. 18 C2B – Lesser Known … More Academic

19. 19 The Role Of E-Government E-Government - describes the application of e- commerce technologies in governmental agencies. Management Information Systems for the Information Age (Fourth Edition) (Fourth Edition) Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved

20. 20 Learning from the Mistakes of Others Furniture.com closes doors, lays off most of staff Pets.com latest high- profile dot-com disaster Food.com lays off half its staff; execs step down WebMD to lay off 1,100 workers The worst crime against working people is a company which fails to operate at a profit. Samuel Gompers, 1908

21. 21 Significant Successes? Expedia.com – 13% of traditional travel agencies closed down Dell – pricing below competition with an 8% margin Lending Tree – growing at 70% per year WebMD – expanded model to include claim processing Napster – success or failure? Source: Business Week: May 12, 2003 The following was the status of well known firms in 2003. Where are they now?

22. Crowdsourcing Crowdsourcing is channeling the experts desire to solve a problem and then freely sharing the answer with everyone. Henk van Ess (writer / reporter) 22

23. Crowdsourcing Crowdsourcing is the act of outsourcing tasks, traditionally performed by an employee or contractor, to a large group of people or community (a crowd), through an open call 23 Benefits:  Problems can be explored at comparatively little cost, and often very quickly.  Payment is by results or even omitted  The organization can tap a wider range of talent than might be present in its own organization.  By listening to the crowd, organizations gain first-hand insight on their customers' desires.  The community may feel a brand-building kinship with the crowdsourcing organization. Source: Wikipedia and YourEnccore.com

24. Crowdsourcing Drawbacks:  Added costs to bring a project to an acceptable conclusion.  Likelihood of failure: lack of monetary motivation, too few participants, lower quality of work, lack of personal interest in the project, global language barriers, or difficulty managing a large-scale, crowdsourced project.  Difficulties maintaining a working relationship with crowdsourced workers throughout the duration of a project.  Susceptibility to faulty results caused by targeted, malicious work efforts. Examples:  Entertainment (web videos), scientific (problem solving), academic (wikipedia) 24 Source: Wikipedia and YourEnccore.com

25. TopCoder Describe the basic business model of TopCoder. Compare and contrast the TopCoder software development process to traditional software development methods. When would you use which? How can other firms apply design principles of the TopCoder process to other domains? 25

26. Next Week Google