1. Creating a Winning E-Business Second Edition
Understanding E-Business
Chapter 1

2. Creating a Winning E-Business Second Edition, Chapter 1
Learning Objectives
Discuss e-business basics
Describe the Internet and World Wide Web
Discuss the role of e-business in the global economy
List e-business advantages and disadvantages
Creating a Winning E-Business Second Edition, Chapter 1

3. Learning Objectives (continued)
Explain e-business value chains and value activities
Identify e-business models
Creating a Winning E-Business Second Edition, Chapter 1

4. Creating a Winning E-Business Second Edition, Chapter 1
E-Business Basics
E-commerce – Process of buying or selling goods or services across a telecommunications network
E-business – Widest spectrum of business activities using Internet and Web technologies
Many technologies facilitate e-business
Electronic funds transfer (EFT)
Electronic data interchange (EDI)
Internet / World Wide Web
Creating a Winning E-Business Second Edition, Chapter 1

5. The Internet and World Wide Web
Network
Group of two or more computers
Linked by communication media
Cable
Telephone lines
Wireless connections
Networks servers
Give users access to shared network resources
Printers, files, telecommunication lines
Creating a Winning E-Business Second Edition, Chapter 1

6. The Internet and World Wide Web (continued)
Creating a Winning E-Business Second Edition, Chapter 1

7. The Internet and World Wide Web (continued)
A worldwide public network that connects private networks
Originated in the late 1960s as ARPANET
Managed by the National Science Foundation in the 1980s and early 1990s as NSFnet
Connected colleges, universities, and research centers
Commercial activity was prohibited until 1991
Creating a Winning E-Business Second Edition, Chapter 1

8. The Internet and World Wide Web (continued)
Internet (continued)
Replaced by commercial high-speed telecommunications backbones in 1995
Individuals and SMBs connect via an Internet Service Provider (ISP)
Large businesses, colleges, and universities may have direct connection
Creating a Winning E-Business Second Edition, Chapter 1

9. The Internet and World Wide Web (continued)
Creating a Winning E-Business Second Edition, Chapter 1

10. The Internet and World Wide Web (continued)
Creating a Winning E-Business Second Edition, Chapter 1

11. The Internet and World Wide Web (continued)
Creating a Winning E-Business Second Edition, Chapter 1

12. The Internet and World Wide Web (continued)
World Wide Web (Web)
A subset of the Internet
Built on the concept of hypertext
System of linked pages called Web pages
Related Web pages are called a Web site
Viewed in a Web browser
Stored on Web servers
Millions of people around the world access the Internet and Web daily
Creating a Winning E-Business Second Edition, Chapter 1

13. E-Business and the Global Economy
Widespread linking of individuals and businesses has changed global economy
Time and space are no longer limiting factors
Business value of information is greater
Information is more accessible
Traditional intermediaries have been replaced by new types of intermediaries
Creating a Winning E-Business Second Edition, Chapter 1

14. E-Business and the Global Economy (continued)
Buyers are growing more powerful
Internet and Web access has changed buyers expectations
Information on competing products
Transaction speed and convenience
Creating a Winning E-Business Second Edition, Chapter 1

15. E-Business and the Global Economy (continued)
Creating a Winning E-Business Second Edition, Chapter 1

16. E-Business and the Global Economy (continued)
Creating a Winning E-Business Second Edition, Chapter 1

17. E-Business and the Global Economy (continued)
Creating a Winning E-Business Second Edition, Chapter 1

18. E-Business and the Global Economy (continued)
Creating a Winning E-Business Second Edition, Chapter 1

19. E-Business and the Global Economy (continued)
Creating a Winning E-Business Second Edition, Chapter 1

20. E-Business and the Global Economy (continued)
Value chain or value network
Activities involved in the production of goods or services
Internet and Web technologies facilitate value chains and networks
Improve communication
Improve transaction speed
Internet and Web access allows businesses to rethink their value chains
Creating a Winning E-Business Second Edition, Chapter 1

21. E-Business and the Global Economy (continued)
Creating a Winning E-Business Second Edition, Chapter 1

22. E-Business and the Global Economy (continued)
Creating a Winning E-Business Second Edition, Chapter 1

23. E-Commerce and E-Business
Electronic commerce is the use of technology, in particular the Internet, to conduct business
e-commerce generally refers to buying or selling electronically, usually interactively
e-business refers to conducting business activities, including business to business activities, using electronic communication
e-[you fill in the blank]
Creating a Winning E-Business Second Edition, Chapter 1

24. Creating a Winning E-Business Second Edition, Chapter 1
E-COMMERCE TECHNOLOGIES
Commercial History of the Internet
Creating a Winning E-Business Second Edition, Chapter 1

25. Creating a Winning E-Business Second Edition, Chapter 1
E-COMMERCE TECHNOLOGIES
Will we see continued growth in e-commerce (Internet) applications?
Consider Metcalfe’s Law:
The value of a network to each of its members is proportional to the number of other users, expressed as (n2 – n) / 2
There are increasing returns to be gained as more organizations and people use the Web
Creating a Winning E-Business Second Edition, Chapter 1
Page 240

26. Creating a Winning E-Business Second Edition, Chapter 1
The Nature of Markets
In a free market economy, transactions take place where the downward sloping demand curve intersects the upward sloping supply curve.
The intersection of these two curves determines both the price and the quantity sold
Creating a Winning E-Business Second Edition, Chapter 1

27. Economics of E-Marketplaces
Creating a Winning E-Business Second Edition, Chapter 1

28. Economics of E-Marketplaces
Creating a Winning E-Business Second Edition, Chapter 1

29. Electronic Marketplaces
What are the functions of markets?
matching buyers and sellers
facilitating the exchange of information, goods, services, and payments associated with market transactions
providing an institutional infrastructure, such as a legal and regulatory framework, that enables the efficient functioning of the market
Creating a Winning E-Business Second Edition, Chapter 1

30. Creating a Winning E-Business Second Edition, Chapter 1
E-Business Models
Business models
How a company conducts business in order to generate revenue
Widespread access to the Internet and Web allows companies to adapt old models and create new ones
E-business models are often categorized by type of customer
Creating a Winning E-Business Second Edition, Chapter 1

31. E-Business Models (continued)
Creating a Winning E-Business Second Edition, Chapter 1

32. E-Business Models (continued)
Business-to-consumer (B2C)
Retail sales (e-retail) including airline tickets, entertainment venue tickets, hotel rooms, stock purchases, diet and fitness programs
Brick-and-mortar companies are moving to brick-and click companies
Sears, Best Buy, Barnes & Noble, the Gap
Pure-play e-retailers and catalog merchants
Amazon.com, eBags, Harry and David
Creating a Winning E-Business Second Edition, Chapter 1

33. E-Business Models (continued)
Creating a Winning E-Business Second Edition, Chapter 1

34. E-Business Models (continued)
Creating a Winning E-Business Second Edition, Chapter 1

35. E-Business Models (continued)
Creating a Winning E-Business Second Edition, Chapter 1

36. E-Business Models (continued)
Business-to-business (B2B)
Businesses selling to other businesses
Online stores, such as Office Depot, Staples
Internet and Web technologies
Web hosting
Web design
Hardware and software
Consulting
Creating a Winning E-Business Second Edition, Chapter 1

37. E-Business Models (continued)
Business-to-business (B2B)
Online trading communities for vertical markets
Exchanges, aggregators, auctions
Virtual marketspaces for buyers and sellers
Elance, ATLA Exchange, Business.com, HedgeHog
Creating a Winning E-Business Second Edition, Chapter 1

38. E-Business Models (continued)
Creating a Winning E-Business Second Edition, Chapter 1

39. E-Business Models (continued)
Creating a Winning E-Business Second Edition, Chapter 1

40. E-Business Models (continued)
Creating a Winning E-Business Second Edition, Chapter 1

41. E-Business Models (continued)
Business-to-government (B2G)
Businesses provide a marketspace for other businesses and government agencies
Bidmain, B2GMarkets
Creating a Winning E-Business Second Edition, Chapter 1

42. E-Business Models (continued)
Creating a Winning E-Business Second Edition, Chapter 1

43. E-Business Models (continued)
Consumer-to-consumer (C2C)
Consumers sell or exchange products and services directly with other consumers
Auctions, online classified ads, expert information exchanges
eBay, American Boat Listing, TraderOnline.com, AllExperts
Creating a Winning E-Business Second Edition, Chapter 1

44. E-Business Models (continued)
Creating a Winning E-Business Second Edition, Chapter 1

45. E-Business Models (continued)
Creating a Winning E-Business Second Edition, Chapter 1

46. E-Business Models (continued)
Consumer-to-business (C2B)
Reverse auctions in which a single consumer names his or her own price for products or services
Consumer’s offer made to multiple businesses, which can accept or decline offer
Priceline.com
Creating a Winning E-Business Second Edition, Chapter 1

47. E-Business Models (continued)
Creating a Winning E-Business Second Edition, Chapter 1

48. Typical Business Models in EC
Online direct marketing
Electronic tendering systems (e.g., reverse auction)
Name your own price
Affiliate marketing
Viral marketing
Group purchasing
Online auctions
Product and service customization customization
Electronic marketplaces and exchanges
Value-chain integrators
Value-chain service providers
Information brokers
Bartering
Deep discounting
Membership
Supply chain improvers
Creating a Winning E-Business Second Edition, Chapter 1

49. Creating a Winning E-Business Second Edition, Chapter 1
Porter’s Competitive Forces Model: How the Internet Influences Industry Structure
Creating a Winning E-Business Second Edition, Chapter 1

50. Summary of Work-Group Computing Shifts
Organizational Hierarchy
Business Team Organization
Personal Computing
Work-Group Computing
Emphasis on the individual
Emphasis on the group
Designing Technology
Redesigning the entire system
Taylorism
The new work reengineering
Technical Users
Direct support of all personnel
Installing Technology
Leadership for evolving work
Creating a Winning E-Business Second Edition, Chapter 1

51. Creating a Winning E-Business Second Edition, Chapter 1
Islands of Technology
Technology is implemented to manage three resources:
Physical Assets
Human Resources
Financial Assets
What if they are not speaking to one another???
Creating a Winning E-Business Second Edition, Chapter 1

52. Problems With Enterprises that aren’t speaking…
Redundancy of Functionality
Miscommunications due to lack of integration
Poor quality customer service
Operational inefficiencies due to miscommunications and redundant processing
Internal Focus
Creating a Winning E-Business Second Edition, Chapter 1

53. Problems With Enterprises that aren’t speaking…
Systems are perpetuated in order to treat operational symptoms without recognizing fundamental problems
Organizational conflict and ‘turf’ battles erupt due to the historical creation of data processing developing financial solutions, engineering developing physical assets, and administrative groups to manage human resources
Creating a Winning E-Business Second Edition, Chapter 1

54. What happens when an enterprise shifts to integration
Technology Applications
Organizational Restructuring
System Islands
Integrated Systems
Separate Systems
Integrated Environments
Single-form Systems
Integrated data, voice, & image
Cost Reduction
Enterprise Effectiveness
Creating a Winning E-Business Second Edition, Chapter 1

55. What happens when an enterprise shifts to integration
Value Chain
Value Network
Simple Market Combat
Competition via Cooperation
Manual Communications
Electronic Communication
Enterprise Technology
Interorganizational Computing
Purchaser of Information
Information Purchaser/Vendor
Creating a Winning E-Business Second Edition, Chapter 1

56. The Collaboration and Communication Imperative
Organizations have always needed to communicate effectively to survive
Ram’s horns and bugles
Roman roads
The Pony Express
Telegraph
Phones
Faxes
EDI
Creating a Winning E-Business Second Edition, Chapter 1

57. The Collaboration and Communication Imperative
Organizations that don’t communicate and collaborate effectively are doomed to failure (e.g., K-mart & Sears v. Wal-mart and Target)
Creating a Winning E-Business Second Edition, Chapter 1

58. The Collaboration and Communication Imperative
Collective intelligence
From Wikipedia: “…a shared or group intelligence that emerges from the collaboration and competition of many individuals.”
Creating a Winning E-Business Second Edition, Chapter 1

59. Creating a Winning E-Business Second Edition, Chapter 1
Enterprise 2.0 and corporate collaboration, coordination, and communication
Enterprise 2.0: social media and web 2.0 software used in "enterprise" (i.e., business) applications.
Social media and networked intranets used to organize and facilitate communication
Bottom up form of knowledge dissemination and capture (as contrasted with traditional enterprise software, which defines structure prior to use)
Creating a Winning E-Business Second Edition, Chapter 1

60. Creating a Winning E-Business Second Edition, Chapter 1
Why Enterprise 2.0?
According to Coleman & Levine, there are 10 Trends in Collaboration driving adoption
Convergence of media
Presence Everywhere
Integration of synchronous and asynchronous
Collaborative consolidation in IT
Collaboration pushed into the infrastructure
Market Consolidation
Collaboration pushed into critical processes
Changing distribution channels for collaboration
Changing buyers of collaboration services
Mobile collaboration
Creating a Winning E-Business Second Edition, Chapter 1

61. Creating a Winning E-Business Second Edition, Chapter 1
But, why Enterprise 2.0?
Many of these trends are symptoms, not drivers. What are the drivers?
Robust collaborative technologies: Technologies today work, and they work well!
Ubiquitous connectivity: Convergence of devices and applications has led to the ability to connect anytime, anywhere across multiple platforms (we ain’t cloistered anymore)
Globalization: Organizations and teams are spread around the country or the world; venders have provided solutions to allow teams to work together across space and time
Societal and Generational Change: A generation of employees is entering the workforce who have grown up on cable, the Internet, and ready access to information. It’s part of the culture!
Creating a Winning E-Business Second Edition, Chapter 1

62. Creating a Winning E-Business Second Edition, Chapter 1
But, why Enterprise 2.0?
One final driver …
The competitive imperative: everyone else is doing it, shouldn’t we?
The answer to this question is not always “yes” but in this case it most likely should be answered in the affirmative
Creating a Winning E-Business Second Edition, Chapter 1

63. An Outline of the course
Introduction to Organizations
Teams and teamwork
Virtual Teams
Collaboration and coordination
Virtual Worlds
Technologies to support web 2.0
SharePoint
Google Sites
Virtual Organizations
Marketing and Applications
Implementation and Deployment
The rest…
Creating a Winning E-Business Second Edition, Chapter 1

64. Creating a Winning E-Business Second Edition, Chapter 1
What is Web 2.0?
Web 2.0: A term that focuses on the use of various web technologies and applications that can be used to information sharing and collaboration.
Web 2.0 encompasses social media, social networks, wikis, blogs and other software tools that connect people into loosely or tightly coupled networks
Social Media: a class of technologies that have in common a participatory mode of information collection, validation, and publication
Social Networks: a class of technologies that focus on tying groups of people together into loosely aligned groups based on common interests or affiliations
Wikis: A web-based software applications designed to allow end-users to create, edit, and link web pages
Blog: derived from the term “web log” is essentially an online diary of commentary, activity logs, and other content developed by a blog author
Creating a Winning E-Business Second Edition, Chapter 1

65. Creating a Winning E-Business Second Edition, Chapter 1
Web 20
Creating a Winning E-Business Second Edition, Chapter 1

66. Creating a Winning E-Business Second Edition, Chapter 1
Chapter Summary
E-business – Conducting a broad spectrum of business activities over a telecommunications network
Internet – A worldwide public network that connects private networks
World Wide Web – A subset of the Internet
Time, space, and geographic location no longer limiting factors
Creating a Winning E-Business Second Edition, Chapter 1

67. Chapter Summary (continued)
Buyers are growing more powerful
Businesses are rethinking their value chains
Business model – The way a company conducts its activities in order to generate revenue
Businesses are adapting old business models and creating new ones
E-business models – B2C, B2B, B2G, C2C, C2B
Creating a Winning E-Business Second Edition, Chapter 1