McGraw-Hill/Irwin © The McGraw-Hill Companies, All Rights Reserved BUSINESS PLUG-IN B11 Ebusiness

B11-2 LEARNING OUTCOMES 1.Describe the four common tools an organization can use to access Internet information 2.Compare ISPs, OSPs, and ASPs. 3.Describe how marketing, sales, financial services, and customer service departments can use ebusiness to increase revenues or reduce costs

B11-3 LEARNING OUTCOMES 4.Explain why an organization would use metrics to determine a Web site’s success 5.Identify the different types of egovernment business models 6.Define m-commerce and explain how an egovernment could use it to increase its efficiency and effectiveness

B11-4 INTRODUCTION Pure play – an Internet retailer that has no physical store, such as Expedia.com and Amazon.com Ebusiness – conducting business on the Internet, not only buying and selling, but also serving customers and collaborating with business partners Ebusiness model – an approach to conducting electronic business through which a company can become a profitable business on the Internet

B11-5 Accessing Internet Information Four tools for accessing Internet information 1.Intranet – internalized portion of the Internet, protected from outside access, for employees 2.Extranet – an intranet that is available to strategic allies 3.Portal – Web site that offers a broad array of resources and services 4.Kiosk – publicly accessible computer system that allows interactive information browsing

B11-6 Providing Internet Information Three common forms of service providers 1.Internet service provider (ISP) –provides individuals and other companies access to the Internet 2.Online service provider (OSP) – offers an extensive array of unique Web services 3.Application service provider (ASP) – offers access over the Internet to systems and related services that would otherwise have to be located in organizational computers

B11-7 Providing Internet Information Common ISP services include: –Web hosting –Hard-disk storage space –Availability –Support

B11-8 Providing Internet Information Wireless Internet service provider (WISP)

B11-9 Providing Internet Information ISPs, OSPs, and ASPs use service level agreements (SLA) which define the specific responsibilities of the service provider and set the customer expectations See Figure B11.3 for a listing of the top ISPs, OSPs, and ASPs

B11-10 Organizational Strategies for Ebusiness Primary business areas taking advantage of ebusiness include: –Marketing/sales –Financial services –Procurement –Customer service –Intermediaries

B11-11 MARKETING/SALES Generating revenue on the Internet: –Online ad (banner ad) - box running across a Web page that contains advertisements –Pop-up ad - a small Web page containing an advertisement –Associate programs (affiliate programs) - businesses generate commissions or royalties –Viral marketing - a technique that induces Web sites or users to pass on a marketing message –Mass customization - gives customers the opportunity to tailor products or services

B11-12 MARKETING/SALES Generating revenue on the Internet: –Personalization - occurs when a Web site can fashion offers that are more likely to appeal to that person –Blog - Web site in which items are posted on a regular basis and displayed in reverse chronological order –Real simple syndications (RSS) - a Web feed format used for Web syndication of content –Podcasting - the distribution of audio or video files, such as radio programs or music videos, over the Internet to play on mobile devices

B11-13 MARKETING/SALES Generating revenue on the Internet: –Search engine optimization (SEO) - a set of methods aimed at improving the ranking of a Web site in search engine listings –Spamdexing - uses a variety of deceptive techniques in an attempt to manipulate search engine rankings, whereas legitimate SEO focuses on building better sites and using honest methods of promotion

B11-14 FINANCIAL SERVICES Online consumer payments include: –Financial cybermediary –Electronic check –Electronic bill presentment and payment (EBPP) –Digital wallet

B11-15 FINANCIAL SERVICES Online business payments include: –Electronic data interchange (EDI) Value-added network (VAN) –Financial EDI (financial electronic data interchange)

B11-16 FINANCIAL SERVICES Electronic Trading Network

B11-17 PROCURMENT Maintenance, repair, and operations (MRO) materials (also called indirect materials) – materials necessary for running an organization but do not relate to the company’s primary business activities –Eprocurement - the B2B purchase and sale of supplies and services over the Internet –Electronic catalog - presents customers with information about goods and services offered for sale, bid, or auction on the Internet

B11-18 CUSTOMER SERVICE Customer service is the business process where the most human contact occurs between a buyer and a seller Ebusiness strategists are finding that customer service via the Web is one of the most challenging and potentially lucrative areas of ebusiness The primary issue facing customer service departments using ebusiness is consumer protection

B11-19 Consumer Protection

B11-20 Consumer Protection Ebusiness security –Encryption: scrambles information into an alternative form that requires a key or password to decrypt. –Secure socket layer (SSL): (1) creates a secure and private connection between a client and server computer, (2) encrypts the information, and (3) sends the information over the Internet—https. –Secure electronic transaction (SET): Similar to SSL, SET encrypts information before sending it over the Internet. E.g. MasterCard, American Express, Visa, Netscape, and Microsoft.

B11-21 INTERMEDIARIES Intermediaries – agents, software, or businesses that bring buyers and sellers together that provide a trading infrastructure to enhance ebusiness Reintermediation – using the Internet to reassemble buyers, sellers, and other partners in a traditional supply chain in new ways

B11-22 Measuring Ebusiness Success Most companies measure the traffic on a Web site as the primary determinant of the Web site’s success However, a large amount of Web site traffic does not necessarily equate to large sales Many organizations with high Web site traffic have low sales volumes

B11-23 Measuring Ebusiness Success Web site traffic analysis can include: –Cookie: a small file is deposited to contain information about customers and their Web activities –Click-through: a count of the number of visitors and click on the targeted advertisement –Banner ad: a small ad on one Web site that advertises the products and services of another business –Interactivity: visitor interactions with the target ad

B11-24 Behavioral Metrics Clickstream data tracks the exact pattern of a consumer’s navigation through a Web site Clickstream data can reveal: –Number of pageviews –Pattern of Web sites visited –Length of stay on a Web site –Date and time visited –Number of customers with shopping carts –Number of abandoned shopping carts

B11-25 Behavioral Metrics Web site metrics include –Visitor metrics: unidentified, unique, session, tracked, identified visitors –Exposure metrics: page exposure Vs site exposure –Visit metrics: stickiness, raw visit depth, visit depth –Hit metrics: regular hits Vs qualified hits

B11-26 Classroom Activity Compare Web sites of two retailers that are in the same business –jcrew.com vs. abercrombie.com –amazon.com vs. bn.com Review the range of information resources and services used in the sites the ways in which resources are organized, de­signed, and presented. how well the sites support the conduct of ebusiness compare the strengths and weak­nesses of the two sites attracting customers to the Web site and retaining them

B11-27 New Trends in Ebusiness: Egovernment and Mcommerce Egovernment - involves the use of strategies and technologies to transform government(s) by improving the delivery of services and enhancing the quality of interaction between the citizen-consumer within all branches of government

B11-28 New Trends in Ebusiness: Egovernment and Mcommerce

B11-29 New Trends in Ebusiness: Egovernment and Mcommerce Mobile commerce - the ability to purchase goods and services through a wireless Internet-enabled device.

B11-30 Classroom Activity The official U.S. gateway to all government information Review the following Web sites to further understand the progress being made in egovernment –C2G – eGov.com –B2G – lockheedmartin.com –G2B – export.gov –G2C – medicare.gov –G2G – disasterhelp.gov

B11-31 Recap: Lecture 3 & 4 Four common tools an organization can use to access Internet information: Intranet, Extranet, Portal, Kiosk Compare ISPs, OSPs, and ASPs. Role of ebusiness in marketing, sales, financial services, and customer service departments Use metrics to determine a Web site’s success Different types of egovernment business models Role of m-commerce in egovernment business models