Electronic Business: Concept and Applications Department of Electrical Engineering Gadjah Mada University

Impact of Internet The impact of Internet to businesses Computing and communication technologies bring convergence to the progress of digital world New possibilities that create opportunities (and threats) require companies to carefully plan and execute actions quickly, which in turn requires the combination of various skills and disciplines

Impact of Internet A new business model, e.g., different value chains B2B, B2C New opportunities by exploration of new services based on digital products  the start of e-commerce Examples: Online shops, Internet banking, information portals

Impact of Internet A company has a lot of expertise in its own field, and at least some expertise in the fields of the others

Impact of Internet Stage of maturity of a company’s online presence Phase 1: “Hello, I am online, too” Phase 2: Structured website Phase 3: Trying e-commerce Phase 4: Doing e-commerce Phase 5: Pervasive e-business Phase 6: One world, one computer Most companies are in phase 4 or 5

Paradigms in Internet-based Business One-to-one relationships A company can meet its customer directly, bypassing traditional chains The new paradigm requires changes of the company  it is necessary to look at the products, services, and information provided by the company Products and services must be fully customizable to attract customers, because customer fidelity is very important

Paradigms in Internet-based Business Dynamic trade Leveraging technology to satisfy current demand with customer response Example: dynamic pricing – it is possible to create dynamic prices for a certain period of time, to meet the customized demand of certain customers Dynamic trading changes relationships between organizations (and between buyers and sellers) Dynamic trading requires organizations/companies to be adaptive to the dynamics

Developing E-Business Systems Identification of the business Categories: soft goods, hard goods, services How Internet can be useful as a channel For soft goods and service providers: Internet can be a sales and distribution channel  B2C For hard goods providers: digitizing value chain among manufacturers, resellers, and online shops  B2B How Internet can reduce costs Marketing costs, customer care costs, distribution costs, order costs Source of revenues Point of sales Advertisement

Developing E-Business Systems Identification of the business (continued) Location of systems In-house (self-managed) Outsourced (e.g., hosted at an ISP) Shopping experiences Pattern and behaviour of customers in on-line shopping Customer profiling (i.e., know your customers) and public relations Types of payment: cash, money order, CC Laws: keep up with international laws

Developing E-Business Systems Organizational preparation On-line business requires change of paradigm that affects Business process  needs business process reengineering (BPR) Human aspect  Everyone should be involved  Awareness of the impact of the on-line business  Correct attitude

Developing E-Business Systems Technological considerations Infrastructure Hardware with sufficient computing power Supporting operating system Network connectivity Data availability and information updates Databases and information systems [Policies about information updates] Translation of business processes to application logic Correct application software Appropriate visual design (e.g., website appearance, user interfaces)

Developing E-Business Systems Implementation strategies Define a pilot project Estimate the costs Measure the productivity Learn as you go Go into production

E-Business Applications: Search Engines The fact that Internet has grown into a very large information repository, making it difficult to find a very specific information Search engines show that “search” can be a serious business (e.g., Google) How can Internet be searched ? The use of index and fast search algorithms Net robots (web crawlers) URL submission The use of META tags in HTML files – to speed up search Description Keywords

E-Business Applications: Search Engines Improving search services Faster algorithms Bigger index Embedded intelligence Search agents for various purposes: news, shopping, appointment, etc High-level search (e.g., people search, image search, natural language search)

E-Business Applications: Portals The idea of “one-stop-shopping” A portal is expected to be a major starting site or an anchor site to visit when a user connects to the Internet Tends to be complex since different types of information must be included Breaking news, free , search engines, chat forums, links to other websites, shopping mall Can be personalized

E-Business Applications: On-line Shops The most popular e-business application Components Product catalog Ordering system (e.g., shopping cart) Payment system A simple-but-effective on-line shop can be built easily – the technology is available Web design Back-end processing and data repository (for order management, inventory system, delivery management, and customer service) Simple payment system (e.g., money order)

E-Business Applications: On-line Shops … but the most important thing is the quality of service Internet connection quality Catalog updates Secure transactions Fast response to customer queries

B2B Applications Supporting applications that allows companies to communicate digitally in running their business Normally created within an agreed (or standardized) framework Example: a manufacturer and its suppliers can use a B2B application to automate purchasing Example: an EDI (Electronic Data Interchange) system used by Custom Office and expedition companies

B2B Applications B2B applications are relatively difficult to create It involves more than one parties It has to be developed on top of existing applications The problem can be approached using information integration strategy