1. Center for Management Development 1 Strategies for an EC Environment Richard A. Scudder, Ph.D. Daniels College of Business University of Denver

2. Center for Management Development 2 Outline of Presentation Setting the Context Macro Trends Surprise-free projections Opportunities and Threats Conclusions

3. Center for Management Development 3 Electronic Commerce – A Little History Traditional EDI and CALSCALS Supply Chain Partnerships Advent of the Internet Advent of the World Wide Web

4. Center for Management Development 4 How the Web Changed Things It’s Ubiquitous It’s Graphic It’s Global It’s “Free”

5. Center for Management Development 5 Three Key Words Chaos Confusion Leverage -McCubbrey, 2000

6. Center for Management Development 6 Chaos Rapid Rate of Change Multiple Business Models Entrepreneurial Frenzy

7. Center for Management Development 7 Confusion Security Information Overload Technical Infrastructure

8. Center for Management Development 8 Leverage Customers Suppliers Strategic Outsourcing

9. Center for Management Development 9 IT Drivers Almost all US workers have a networked pc on their desk. The daily users of Yahoo! outnumber the viewers of the most popular show on television. 140 million people world-wide can access the Internet. By 2005 this will grow to 1 billion.

10. Center for Management Development 10 Moore’s Law The number of transistors on a chip double every 18 months. Tenfold increase every five years. 1950 2000 2050 Gordon Moore, Intel

11. Center for Management Development 11 Moore’s Law, amended Storage space is increasing at an even higher rate than chip density – doubling every six months. Communication capacity is exploding. Total bandwidth in the US is tripling every year.

12. Center for Management Development 12 Metcalf’s Law Utility= (number of users) 2 Each new user adds more than just simple value The Internet with millions of users has achieved critical mass The value of your e-commerce site grows exponentially with each new user Robert Metcalf, 3-com

13. Center for Management Development 13 IT Strategy The information superhighway is the wave of the future. The strategy of the organization should be linked absolutely to the Information Technology strategy

14. Center for Management Development 14 Electronic Commerce Today Corporate “Production” Purchasing Corporate MRO PurchasingMRO Purchasing Business to Consumer Government to Business, Consumer Consumer to Consumer

15. Center for Management Development 15 EC Techniques EDI and CALS Electronic Catalogs Auctions, Marketspaces Intelligent Agents Mass Customization Disintermediation Global Reach

16. Center for Management Development 16 What is Electronic Commerce? It is a Business Issue, not a Technical Issue

17. Center for Management Development 17 What is Electronic Commerce? It is using information technology for competitive advantage “in spades”.

18. Center for Management Development 18 Using IT for Competitive Advantage Surfaced in the early 1980’s Theorists: –Michael Porter –Warren McFarlan Value Chain Five forces model Lots of examples

19. Center for Management Development 19 -Haag 2000

20. Center for Management Development 20 Talbot Company -Haag 2000

21. Center for Management Development 21 Examples: Using IT for Competitive Advantage American Airlines American Hospital Supply Merrill Lynch Cash Management Account Wal-Mart Federal Express Singapore

22. Center for Management Development 22 Common Characteristics CEO support and involvement Bridged the “two-cultures” gap Creative systems design Tended to be inter-organizational systems Developed in secrecy

23. Center for Management Development 23 What’s Different with EC? Technological changes are profound The pace of change is extremely rapid The pace of business is extremely rapid New business models are emerging “If you snooze, you lose!”

24. Center for Management Development 24 Macro Trends Most EC will be business to business Integration of web to back-end processes New ways to relate to supply chain Strategic alliances are the norm Telecommunications options

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28. Center for Management Development 28 Surprise-free projections EC will bring new winners and new losers Winners will be bigger winners There will be more losers Foreign competition will come

29. Center for Management Development 29 Searching for Opportunities Understand the business Understand the technology Demand creativity Look for new ways to relate to customers and suppliers Remember mass customization, disintermediation and global reach “Hire the children”

30. Center for Management Development 30 Landmines Usage drop Disinterest Community of value fragmentation Selling of the Net Lockout and Duplication

31. Center for Management Development 31 An Action Plan Think big Start small Test quickly Scale fast –Diamond Technology Partners, 1999