E-Commerce, Web 2.0, and Social Networking Chapter 8

Q1: What types of inter-organizational systems exist? Q2: How do companies use e-commerce? Q3: Why is Web 2.0 important to business? Q4: How does social capital benefit you and organizations? Q5: How does social CRM empower customers? How does the knowledge in this chapter help Fox Lake and you? Study Questions 8-2 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Q1: What Types of Interorganizational Systems Exist? 8-3 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Inter- organizational Systems Pre-Internet Systems E-Commerce Web 2.0 Enterprise 2.0 Postal mail, telephone, fax Web Storefronts Google, eBay, Amazon, CNet Social CRM, SOA

Interorganizational Systems 8-4 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Q2: How Do Companies Use E-Commerce? 8-5 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Merchant companies—take title to goods they sell Nonmerchant companies—arrange for purchase and sale of goods without owning or taking title to those goods

Example of Use of B2B, B2G, and B2C 8-6 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

E-commerce application enables auction company to offer goods for sale and to support a competitive-bidding process Online auctions Provide goods and services at stated price, arrange delivery, but do not take title Amazon.com sells books and other merchandise for other businesses Clearinghouses Match buyers and sellers Priceline.com Electronic exchanges Nonmerchant E-Commerce Companies 8-7 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Disintermediation Companies learn how customers internalize competitors’ pricing, advertising, and messaging Q2: How Does E-Commerce Improve Market Efficiency? 8-8 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Retail Store X

Channel conflict Price conflict with traditional channels Logistics expenses increase for manufacturer Customer-service expenses increase for manufacturer Economic Factors in Disintermediation What Economic Factors Disfavor E-Commerce? 8-9 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Q3: Why is Web 2.0 Important to Business? 8-10 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Figure 8-6 Software as a (Free) Service (SaaS)SaaS 8-11 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Software as a (Free) Service 8-12 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall SaaSSaaS—thin-client applications run in Internet cloud License-free software Does not require an installation on the users’ computers Web servers download Web 2.0 programs as code within HTML, as Flash, or as Silverlight code. Readily (and frequently) updated. New features added with little notice or fanfare. Google Docs & Spreadsheets Google Groups Google Earth Google Maps

Combines social networking, viral marketing, and open-source design, saving considerable cost while cultivating customers. Crowd performs classic in-house market research and development. Sets up customers to buy. User-Generated Content 8-13 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Crowdsourcing examples

Mashups Mashup —a web application that combines data from other websites Example—map data from Google Maps to add location information to real-estate data, thus creating a new and distinct web serviceGoogle Maps See Organic User Interfaces and Mashups 8-14 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

AdWords Vendors pay for specific words, phrases Placement on search results list depends on how much you pay for search word Vendor pays when someone clicks on their link Amount can vary day to day, hour to hour Ad Sense Google inserts ads that match web page content Google pays web page owner for every click Website owners enroll in this program to enable text, image, and video advertisements on their websitesadvertisements Advertising How Can Businesses Benefit from Web 2.0? 8-15 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Information systems that deal with assets, whether financial or material, requires control, rather than flexibility and organic growth. Don’t get carried away Credit card transaction processing Accounts payable or general ledger system interface Examples Web 2.0 Not for All Applications 8-16 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Social CapitalSocial Capital—investment in social relations with expectation of returns in the marketplace Adds value in four ways: 1.Information about opportunities, alternatives, problems and other factors 2.Influence decision makers in your organization or others 3.Social credentials from linking to network of highly regarded contacts 4.Personal re-enforcement of professional image and position Q4: How Does Social Capital Benefit You and Organizations? 8-17 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Value of social capitalValue of social capital: Number of relationships in a social network, by strength of those relationships, and by resources controlled by those related. Professional social networking factors Gain social capital by adding more friends and strengthening relationships with existing friends. Gain more social capital by adding friends and strengthening relationships with people who control resources important to you. Social Capital 8-18 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

People you know the least contribute the most to your network. Importance of Weak Relationships 8-19 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Eileen is weak tie Expand network by meeting Eileen

Progressive organizations maintain a presence on Facebook, LinkedIn, Twitter, and other sites Sales people, customer support, public relations, and endorsements by high profile people How Do Social Networks Add Value to Business? 8-20 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Fan Connections and Endorsements 8-21 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Classical CRM organization speak to customers with one voice and controlled messages, offer support for customers, depending on value of customer. Today, customers craft own relationship with a business by their use of touch points. Social CRM—creation and use of Enterprise 2.0 collaborative relationship between businesses and customers. Q5: How Does Social CRM Empower Customers? 8-22 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

What Are the Characteristics of Web 2.0: SLATES 8-23 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Social CRM done in style of Enterprise 2.0. Relationships between organizations and customers emerge as both parties create and process content. Employees create wikis, blogs, discussion lists, frequently- asked-questions, sites for user reviews and commentary, and other dynamic content. Customers search content, contribute reviews and commentary, ask more questions, create user groups, etc. Each customer crafts own relationship with company. Social CRM is Enterprise 2.0 CRM 8-24 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Classical CRM Centered on customer lifetime value Control what customer reads, sees, hears about company and its products Social CRM Effective reviewer, commentator, or blogger can have significant influence Classical CRM vs. Social CRM 8-25 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall