aprojectreportone-business-140310094734-phpapp02 (1).docx

A PROJECT REPORT

ON

“REPORT ON E-BUSINESS’’

PROJECT WORK SUBMITTED IN PARTIALFULFILLMENT OF THE REQUIREMENTSFOR THE AWARD OF THE DEGREE OF

MASTER OF MANAGEMENT STUDIESIN

(INFORMATION SYSTEM)

SUBMITTED BY

NAME :(VERMA PRAMOD)

UNDER THE GUIDANCE OF (Mr.MAHENDRA NAGLE)

AlamuriRatnamalaInstitute of Engineering & Technology

Affiliated to

UNIVERSITY OF MUMBAI

Department of [] Management

Academic Year –2012 – 2014

DEPARTMENT OF MANAGEMENT

CERTIFICATE

This is to certify that the dissertation/project entitled

______________________________ submitted by Mr. /Ms.

___________________ bearing Pin No._______________ on this ___ day of

______ 20__ in partial fulfilment of the requirements for the award of the Degree of Master of Management Studies of University of Mumbai, is a bonafide work to the best of my/our knowledge and may be placed

before the Examination Board for their consideration.

_____________________ ____________________Mr. / Mrs. _______________ Mr. / Mrs. _______________

Internal Examiner External Examiner

______________________ _________________Mr Nishant

Kaushik_______________ Mr. _______________

Dean-Academics Director

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REPORT ON E-BUSINESS

ACKNOWLEDGEMENT

I express my sincere thanks to my project guide

of prof. “Mahendra Nagle”.

Coordinator at ARMIET college for M.M.S section who has been guiding

Force to my project “Report on E-Business ”.

I am also thankful to my all professors to their

Support and encouragement in finding out the appropriate data for this Project

report, without their thankless support and efforts, making this support would

have been impossible for me.

I would also thanks the whole respondent who

Provide me the best knowledge and for their help and cooperation Throughout

the project.

Pramod Verma

9


EXECUTIVE SUMMARY OF E-BUSINESSES

In looking over the challenges identified above, one certainly could ask, “So

what is really different about e-business?” Overall, the answer that firms have

faced most of the challenges identified in the past, and that this simply

represents the latest iteration of these challenges.

Organizations have faced the challenge of integrating autonomous businesses. A

Considerable literature has grown up around all of the problems in managing

projects.

Any technology-based firm must deal with developing people skills among their

Technical managers, be they engineers, financial analysts, or software

developers.

Managing across generations is certainly not a new issue. And both the job

churn and the ensuing talent shortage are inherent in any technological

revolution. Thus, again, what’s new? We argue that two factors distinguish

managing people in an e-business today from managing in a brick and mortar

business.

The first factor distinguishing e-business from traditional business is the

complexity of the problem.

What seems different about managing e-businesses today stems from the

Interaction of facing all of these challenges simultaneously.

While organizations may have faced each of these challenges before, they have

probably never faced so many challenges at the same time.

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This creates a level of complexity seldom experienced before.

A second, more important set of factors was noted explicitly by the respondents.

In fact, when pressed on these issues, respondents agreed as to the

distinctiveness of two of the challenges: Uncertainty and speed. Virtually every

person we interviewed first noted that the biggest change in moving to e-

business is the speed. Things happen so much more quickly,

Requiring faster organizational response than they had ever faced before.

Second, while fewer noted it specifically, the uncertainty challenge was at least

implicit if not explicit.

They noted the concern with not knowing for sure how to manage in the

present environment that was accentuated by uncertainty regarding what might

happen next. It seems that the combination of uncertainty regarding the way in

which certain factors will change in the future with the People in the E-

Business WP 00-11 increasing speed at which they will change presents the

most formidable management challenge unique to an e-business.

Thus, managing an e-business today requires dealing with an unusual amount of

complexity, uncertainty, and dynamicity. This certainly requires a new

paradigm for organizing in terms of how the structure, processes, and people of

the firm are managed. However, before discussing this new paradigm, we will

first examine the different evolutionary paths taken by different e-business.

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INDEX (TABLE OF CONTENTS)

SR.NO CONTENT PAGE NO

12


13


INTRODUCTION AND RESEARCH METHODOLOGY

INTRODUCTION:

This turn towards Internet based technologies generated a new status quo in the business

world. E-business was defined by IBM back in 1997, as “the transformation of key business

processes through the use of Internet technologies”. According to Chaffey (2002), e-business

is described as “all the electronically mediated information exchanges, both within an

organization and with external stakeholders, supporting the range of business processes.”

E-Business enables an enterprise to spread its wings to the global customer. To extend the

sales platform to a futuristic dimension, business houses have incorporated software that can

run on platforms offered by the World Wide Web. E-business has now penetrated into

consumer goods and other production and service based industries. IPSR solutions' Web

Application Division has proven expertise in creating customised solutions that can manage

web based Business Logistics perfectly. The following chart explains our service platforms.

SHORT HISTORY OF E-BUSINESS

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Despite the fact that e-business is a relatively new trend in the business sector, its brief

history is filled with controversial events. The rapid growth of the popularity of the Web from

1995 was accompanied by a highly profitable period for e-business companies. Setting up a

fully functional e-Business website was very easy and cost efficient and at that time it was

thought to guarantee success and profits (O’Connor and Galvin, 1998; Janenko, 2003). The

number of e-businesses kept growing in an attempt for everybody to have a share from the

profit pie. On the turn of the century, their number reached its peak and their profit

opportunities and potential financial growth was capped. This led to the huge stock market

collapse of many e-business companies which is known as dot.com bust. After a five year

period where companies had to revaluated their strategic approach towards e-commerce,

growth of e-businesses started to increase again, reaching double digit level through the

current period.

LIMITATIONS OF E-BUSINESS SYSTEM:-

15

REPORT ON E-BUSINESSThe limitations of e-business can be classified as technological and non-technological.

TECHNICAL LIMITATIONS OF ELECTRONIC OMMERCE:

Lack of sufficient system is standards, reliability, security and communication protocols

Not enough telecommunication bandwidth

"The software development tools are still evolving and changing rapidly"

Integrating the Internet and electronic commerce software with current databases and applications difficultly

Additional cost to request special Web servers and other infrastructures, in addition to the network servers

Possible problems of interoperability, that means some e-business software or applications does not fit with some hardware, or is incompatible with some operating systems or other components

NON-TECHNICAL LIMITATIONS:

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Lack of feel and touch online

Many complicated legal issues

Rapidly changing and evolving e-business

Lack of support services

Insufficiently large enough number of sellers and buyers

Breakdown of human relationships

Inconvenient and expensive accessibility to the Internet

OBJECTIVE OF E-BUSINESS:-17


Improve service.

Save time.

-Time taken by customers.

-Elapsed time for process.

Reduce process errors.

Reduce the cost of core service provision.

Free staff to provide value added services.

Improve morale

-give people the tools and time they need

ADVANTAGES:-18

REPORT ON E-BUSINESSThe benefits of implementing E-Business tools is not so much in the use of technology, as in

the streamlining of business processes and the ease in finding new markets. Some of the

advantages include:

quicker and easier communications.

strengthened marketing capabilities and reach

increased hours of operation (a website provides 24 hour 7 day information to existing

and potential customers)

access to broader information through research

reducing the cost of doing business by lowering transaction costs and increasing

efficient methods for payment, such as using online banking and reducing stationery

and postage costs.

the opportunities to adopt new business models and develop tailored customer

support.

SCOPE AND FOCUS OF THE REPORT:-

19

REPORT ON E-BUSINESS The scope of E-Business is as wide as an ocean & there by the implementation hurdles.

When one thinks of the Electronic Business even through final goal remains the same as that

of the traditional business, but the way in which they function in order to improve the

performance is different. As information sharing is the major part of the corporate industries,

networking has given boost to E-Business. This change in view-point has opened door for

new opportunities.

Nationalized and Private banks agrees that adopting e-business as a strategy is one of the

important steps the banks has taken in its development due to the tremendous benefits e-

business adoption provides. According to them their perceived benefits include convenience

to customers, speed and quality of service, reduction of queues in banking halls and reduction

in the total overhead cost such as reduction in employee recruitment and reduction in space

for clients and customers .These factors that pushed their drive to adopt e-business.

A) The research provides powerful, real time E-Business reporting to help E-

Business managers improve merchandising and increase sales.

B) The research is very much useful to get the lifetime value of your customers based

upon their acquisition source, and increase your expenditures on sources that

generate the best customers over lifetime.

C) It tracks the performance of all your online marketing initiatives, including Pay -

per- click keyword buys, doing transaction online, paying bills using net banking,

banner ads, e-mails and affiliate programs and also how it is effective to

implement.

D) It helps the E-Businesses to convert visitors into customers.

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REPORT ON E-BUSINESSE) It helps to determine whether online competitors can significantly

Harm your business by providing some of the value you currently

Offer customers in the traditional way. It helps the managers to improve the

business by enhancing their functionalities as compared with their competitors.

LITERATURE REVIEW:

INFORMATION IS POWER

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This is one of the most widely accepted statements and applies for every aspect of human

activity. Internet is an unlimited pool of information and benefits anyone who uses it

properly.

According to Porter and Millar (1985) information gives competitive advantage to a

company in three different ways:

a) By changing industry structure and changing the rules of competition.

b) By providing companies with new ways to outperform their competitors.

c) By creating new businesses, even from within a company’s existing operations.

The authors continue by discussing the strategic significance that Information Technology

has obtained for companies, by affecting the value chain, thus the technological and

economic activities that a company performs to do business. Not only it transforms the value

chain, but also transforms the product or the service that the company produces. Additionally,

authors suggest five ways for Information Technology to be successfully implemented in

business processes. This can be done by:

a) Assessing the intensity of information.

b) Determining the role that Information Technology will have in the industry structure.

c) Understanding the ways that it can create competitive advantage for their companies.

d) Investigating the possibilities of new businesses.

e) Developing a strategic plan to take advantage of Information Technology.

SUCCESS AND FAILURE FACTORS OF E-BUSINESS

22

REPORT ON E-BUSINESS“E-business and E-service will move to the forefront of technology priorities. To take full

advantage of the E-service, you need to look at your organization from an alternative

perspective. The question is how to deal with these changes, at what cost, and at what speed.

This is not the time to worry about "disintermediation". It is the time for cooperation,

integration, and the consideration of customer loyalty, profitability and competition

advantage.”

As we have seen, e-Business has noticed remarkable growth and success over the last years.

Despite the numerous examples of successful e-Businesses there are many examples where e-

Business failed to succeed. By looking at those characteristic examples, this report tries to

understand the factors that lead to a successful e-Business but also to figure out the dangers

that may lead to failure. These factors would form a helpful guideline, which would help in

making the IT employment website as successful as possible.

HYPOTHESIS:

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REPORT ON E-BUSINESSE-business offers buyers and sellers a new form of communication and provides an

opportunity to create new marketplaces.

Theoretical studies suggest in general that the development of e-business results in higher

firm performance as a result of lower search and head-to-head comparison costs.

However, there are a number of recent theoretical studies, which demonstrate that the growth

of e-commerce may lead to monopolistic pricing behaviour so that firms engaging in e-

commerce need not perform better compared to more

Traditional enterprises.

To date, there exists little empirical evidence on the impact of information technology on

economic performance. This paper is the first that uses a large representative data set of

Belgian firms to study empirically the impact of e-business on corporate performance.

OUR MAIN CONCLUSIONS CAN BE SUMMARIZED AS FOLLOWS:

(1) The penetration of the Internet in firms is high , however, the use of e-business is still

limited.

(2) It is especially the large firms that engage in ebusiness and mostly in e-procurement.

(3) E-business has no effect on total factor productivity in small firms , however, we find

positive effects on performance of e-business in large firms.

COLLECTION OF DATA (PRIMARY & SECONDARY DATA)

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E-BUSINESS – TRANSACTION MEDIUM

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Data source

PrimarySecondary

Questionnaire

Survey

Observation

Experimental

Internal

External

Internet Published data

Sales records

Marketing activities

Cost information

feedback

Newspaper

Books

Private studies

Electronic printed


Most e-commerce is done over the Internet. But EC can also be conducted on private

networks, such as value-added networks (VANs, networks that add communication services to

existing common carriers), on local area networks (LANs) or wide area networks (WANs).

E-BUSINESS – TRANSACTION TYPES

(E-commerce transactions can be done between various parties.)

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• Business-to-business (B2B)

• Collaborative commerce (c-commerce)

• Business-to-consumers (B2C)

• Consumers-to-businesses (C2B)

• Consumer-to-consumer (C2C)

• Intra-business (intra-organizational) commerce

• Government-to-citizens (G2C)

• Mobile commerce (m-commerce)

HOW IS E-BUSINESS DIFFERENT

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REPORT ON E-BUSINESS Reduction in physical boundaries and distance.

Serve larger customer base more efficiently.

Target specific customer groups.

The Internet is an interactive marketing medium.

More detailed information on customer transactions.

Improved transaction efficiency.

CONSUMERS TO CONSUMERS (C2C)

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Abbreviation for consumer-to-consumer commerce; that

is, commerce with no middle business people The most notable examples are Web-based

auction and classified as sites. Most large venues for such models (for example, eBay and

Classifieds2000) are quickly permeated by consumers who participate so actively and

regularly that they become small businesses for them.

C2C stands for consumer to consumer electronic commerce. The Internet has facilitated new

types of C2C although it is important to note that this kind of commerce -- in the form of

barter, yard sales, flea markets, swap meets, and the like -- has existed since time

immemorial. Notably, most of the highly successful C2C examples using the Internet actually

use some type of corporate intermediary and are thus not strictly "pure play" examples of

C2C.

WHAT IS BUSINESS TO BUSINESS (B2B)

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B2B stands for "business-to-business," as in businesses doing business with other businesses.

The term is most commonly used in connection with e-commerce and advertising, when you

are targeting businesses as opposed to consumers.

On the Internet, B2B (business-to-business), is the exchange of products, services, or

information between businesses. B2B is e-commerce between businesses. B2B

Communication using XML over HTTP B2B - the basics

Business-to-business electronic commerce (B2B) typically takes the form of automated

processes between trading partners and is performed in much higher volumes than business-

to-consumer (B2C) applications.

WHAT IS BUSINESS TO CONSUMERS (B2C)

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Refers to businesses selling products or services to end-user consumers.

B2B stands for transaction activities involving two business entities (business-to-business

transaction). B2C stands for transaction activities involving a business and a consumer

(business-to-consumer transaction).

Electronic commerce comprises commercial transactions, involving both organisations and

individuals. From the technical point of view e-commerce is the processing and transmission

of digitised data. E-commerce decreases the distance between producers and consumers.

Consumers can make their purchase without entering a traditional shop.

E-BUSINESS CATEGORY

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E-banks

E-trade

E-consulting

E-engineer

E-learning

E-mail

E-marketing

E-transactions

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HOW SAFE ARE E-BUSINESS FINANCIAL TRANSACTIONS

New security technology like 128-bit SSL encryption ensures the safety and privacy of both you and your customers, and is built into the latest e-Business software tools. Your security and privacy is a top priority with all e-Business providers.

CAN MY BUSINESS BENEFIT FROM E-BUSINESS :

33

REPORT ON E-BUSINESSReduce administrative and operating costs.

Reduce inventory costs.

Reduce the cost of procurement.

Improve customer service and satisfaction.

Streamline procurement procedures.

Increase communication efficiency and interaction with employees, vendors,

customers and strategic partner.

Increase revenues and profit margins.

E-COMMERCE, E-BUSINESS, WHO E-CARE

Some analysts and on-line business people have decided that e-business is

infinitely superior as a moniker to e-commerce. That’s misleading and distracts34

REPORT ON E-BUSINESSus from the business goals at hand. The effort to separate the E-commerce

and E-business concepts appears to have been driven by marketing

motives and is dreadfully thin in substance.

AN E-DISTINCTION

For the purpose of clarity, the distinction between e-commerce and e-business in this book is

based on the respective terms commerce and business.

Commerce is defined as embracing the concept of trade, ‘exchange of merchandise on a large

scale between different countries’.11 By association, e-commerce can be seen to include the

electronic medium for this exchange. Thus electronic commerce can be broadly defined as

the exchange of merchandise (whether tangible or intangible) on a large scale between

different countries using an electronic medium – namely the Internet.

The implications of this are that e-commerce incorporates a whole socio-economic,

telecommunications technology and commercial infrastructure at the macro-environmental

level.

All these elements interact together to provide the fundamentals of e-commerce.

Business, on the other hand, is defined as ‘a commercial enterprise as a going concern’.12 E-

business can broadly be defined as the processes or areas involved in the running and

operation of an organization that are electronic or digital in nature.

These include direct business activities such as marketing, sales and human resource

management but also indirect activities such as business process re-engineering and change

management, which impact on the improvement in efficiency and integration of business

processes and activities.

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Figure 1.1 illustrates the major differences in e-commerce and e-business, where e-commerce

has a broader definition referring more to the macro-environment, e-business relates more to

the micro-level of the firm.

WHAT ARE THE KEY DRIVERS:-

It is important to identify the key drivers of e-commerce to allow a comparison

between different countries. It is often claimed that e-commerce is more advanced in the

USA than in Europe.

These key drivers can be measured by a number of criteria that can highlight the stages of

advancement of e-commerce in each of the respective countries. The criteria that can

determine the level of advancement of e-commerce .

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REPORT ON E-BUSINESS1 TECHNOLOGICAL FACTORS – The degree of advancement of the

telecommunications infrastructure which provides access to the new technology for business

and consumers.

2 POLITICAL FACTORS – including the role of government in creating government

legislation, initiatives and funding to support the use and development of e-commerce and

information technology.

3 SOCIAL FACTORS – incorporating the level and advancement in IT education and

training which will enable both potential buyers and the workforce to understand and use the

new technology.

4 ECONOMIC FACTORS – including the general wealth and commercial health of the

nation and the elements that contribute to it. Since a distinction has been made in this book

between e-commerce and e-business for consistency, the key drivers of e-business are also

identified. These are mainly at the level of the firm and are influenced by the macro-

environment and e-commerce, which include:

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KEY DRIVERS OF E-BUSINESS:-

ORGANISATIONAL CULTURE – attitudes to research and development (R&D); its

willingness to innovate and use technology to achieve objectives.

COMMERCIAL BENEFITS – in terms of cost savings and improved efficiency that

impact on the financial performance of the firm.

SKILLED AND COMMITTED WORKFORCE – that understands, is willing and able

to implement new technologies and processes.

REQUIREMENTS OF CUSTOMERS AND SUPPLIERS – in terms of product and

service demand and supply.

COMPETITION – ensuring the organization stays ahead of or at least keeps up with

competitors and industry leaders.

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DEMAND FOR PEOPLE WITH SKILLS IN E-BUSINESS

INTRODUCTION

This chapter introduces an “e-Business Skills Triangle” framework, reflecting the importance

to e-Business of three main types of skill – business, creative and technical.

It argues that e-Business predominantly needs people with a mix of types of skill, a

proportion of them with a fairly even balance between two or all three types of skill. It goes

on to look in more detail at the skills and work content associated with the main types of

skill.

Based on the analysis, four main e-Business occupations are identified, and the demand for

new people and re skilling of existing members of the workforce is explored for each one.

Key findings are that:

• Business Studies programmed should have a significant Information

Technology

content.

• Business Studies programmed should have an e-Business orientation

that

permeates all subjects studied.

• There is a need for Business Schools to have a proportion of Information

Systems

programmed. with a fairly equal mix of business and information

technology

content.

• There is a requirement for the existing population of managers and

management

advisors to understand the business implications of e-Business.

• Every business with a web site will need a webmaster.

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• E-Business has boosted demand for people with technical IT skills.

• There is a need to update the skills of technical people using dated

technology.

• There is a major increase in demand for designers to work on web

design, and for

people with a strong mix of design and technical skills.

• Many of those already working in print design need to acquire web

design skills,

• As available bandwidth increases, the requirement for people to produce

live action and animated content will increase.

• Everyone entering employment should have IT skills.

• Third level graduates should ideally have an understanding of the

business uses of

Information technology.

• Industry needs to make existing employees IT literate, perhaps at an

overall rate of about 2% of employment per annum.

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THE E-BUSINESS MODEL:

The e-Business model, like any business model, describes how a company functions; how it

provides a product or service, how it generates revenue, and how it will create and adapt to

new markets and technologies. It has four traditional components as shown in the figure, The

e-Business Model. These are the e-business concept, value proposition, sources of revenue,

and the required activities, resources, and capabilities. In a successful business, all of its

business model components work together in a cooperative and supportive fashion.

41


E-BUSINESS CONCEPT:

The e-business concept describes the rationale of the business, its goals and vision, and

products or offerings from which it will earn revenue. A successful concept is based on a

market analysis that identifies customers likely to purchase the product and how much they

are willing to pay for it.

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GOALS AND OBJECTIVES:

The e-Business concept should be based, in part, on goals such as "become a major car seller,

bank, or other commercial enterprise", and "to become a competitor to some of the well-

known firms in each of these industries." Objectives are more specific and measurable, such

as "capture 10% of the market", or "have $100 million in revenues in five years." Whether

these goals and objectives are realistic or not, and whether the company is prepared to

achieve these goals is addressed in the business plan process for startup firms and in the

implementation plan for an existing firm that is considering a significant change. In looking

at the business model it is sufficient to know what the goals and objectives are, and whether

they are being pursued.

CORPORATE STRATEGIES

Embedded in the e-Business concept are strategies that describe how the business concept

will be implemented. These are known as corporate strategies because they establish how the

business is intended to function. These strategies can be modified to improve the performance

of the business. Environmental strategies, discussed in a following section, describe how the

company will address external environmental factors, over which it has no control.

43

http://www.prudens.com/patens/ebusiness/busmodel.html#modconcept




THE E-BUSINESS CONCEPT AND MARKET RESEARCH

The selection and refinement of the business concept should be integrally tied into knowledge

of the market it serves. In performing market research care must be taken to account for the

global reach of the Internet for both customers and competitors. It is also important to

remember that markets shift, and can shift rapidly under certain conditions. But most

important is to truly understand what the market is, who comprises it, and what do they want.

THE E-BUSINESS CONCEPT

44

http://www.prudens.com/patens/ebusiness/busmodel.html#p1


PRICE

Pricing is an important part of the e-business concept and should be established on the basis

of market research. Price is often set with an eye on the competition and can have a direct

effect on market share. In traditional commerce in the U.S., the seller sets the price. Online

pricing, on the other hand, may include negotiation or auction pricing, where the interaction

of sellers and buyers can affect the price. Knowledge of competing prices is also readily

available online, and will keep downward pressure on prices.

When is it OK to increase prices? It depends on the business. If a company has high fixed to

variable costs, prices should be changed cautiously. If customers are "locked-in", and the

product or service is less sensitive to price, then prices may be changed, to a degree, with less

risk. But all changes should be checked beforehand with market research and financial

analysis.

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REPORT ON E-BUSINESSA potential problem for some products is that the market may change faster than the seller

can change the product or service. One way to survive in this environment is to sell at the

minimum price that allows a profit, avoid price changes and continuously upgrade the

product. This approach is often used in computer hardware and software sales. At the same

time the seller should invest in finding how to shorten the development cycle, and put in

place a market research program that will quickly identify trends and changes.

The steady development of a product has other advantages. It evens out the revenue stream

rather than having the "boom or bust" cycle of a single product. It also shows that the

company is steadily developing and upgrading products for the customers who should begin

to buy into the company's vision. And customers, analysts, and investors will develop

confidence that the company is going to be around for the long-term.

The price must also provide real value to the customer, that is the customer must be pleased

with the purchase of the product or service. In addition to price, the buyer may also be

interested in how the product can be of assistance to his company. In this case, comparisons

of price and ROI may be used to show that the offering adds more value than a competitor's.

The price can also be a basis for building long-term customer relations, which can lead to

multiple sales. For example, as retail customers become more comfortable shopping on a site,

it should be easier to get them to migrate to higher margin products.

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VALUE PROPOSITION

The value proposition describes the value that the company will provide to its customers and,

sometimes, to others as well. With a value proposition the company attempts to offer better

value than competitors so that the buyer will benefit most with this product.

Reduced price

Improved service or convenience such as the "1 click" checkout

Speed of delivery and assistance

Products that lead to increased efficiency and productivity

Access to a large and available inventory that presents options for the buyer

Providing value in an e-business uses the same approach as providing value in any business,

although it may require different capabilities. But common to both are the customers who

seek out value in a business transaction. The value proposition helps focus the business on the

well-being of the customer, where it remains in successful companies.

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VALUE DELIVERY THROUGH INTEGRATION OF ACTIVITIES

INTEGRATION OF ORGANIZATION OR ENTERPRISE OPERATIONS

The integration of systems inside and outside the organization can provide value for both

customers and the organization. One of the requirements for e-business is to link front-end

with back-end systems in order automate the online operations of the organization.

Front-end activities deal directly with the customer while back-end systems include all of the

internal support activities that do not deal directly with the customer. Some enterprises have

different geographic locations for front-end and back-end office activities and rely on the

integration of the associated computer and network systems for successful corporate

operations.

Front-End & Back-End Operations:

48


REPORT ON E-BUSINESSExamples of activities that require integrated systems are:

Order placement through point-of-sales systems

Customization of products based on user requirements

Production tracking

Customer order fulfillment

EXTERNAL INTEGRATION: THE SUPPLY CHAIN

Operations on the Web can also extend to cooperating firms such as partners in a supply

chain, also known as a "Value Web". The Value Web may include a wide range of

participants as well as the possible use of a digital exchange to procure or sell products.

Many firms have participated in a supply chain for years using Electronic Data Interchange

(EDI) technology to buy and sell components and products.

Successful supply chains are vital for manufacturing operations since the timeliness, cost and

success of the final product may depend on a component part made by a single supplier. The

competence of suppliers may now be demonstrated through the ISO 9000 qualification

process, which is critical when using suppliers from foreign countries or when the final

products are exported.

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REPORT ON E-BUSINESSSUPPLY CHAIN INTEGRATION

When the supply chain transactions of the partners can be automated and integrated over the

Web into the back-end systems of each other, then the resources of all the chain partners can

be planned and managed for an efficient operation. An emerging approach to automate

transactions with partners is to link systems through the corporate portal, which greatly

reduces the integration requirements. Portal software now has potential connections, or

hooks, where the systems of different enterprises can be linked to securely transfer data.

In addition to good technology, it takes a strategy, time, resources and, most importantly,

trust between partners, for the supply chain to function successfully.

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STRUCTURAL CONCEPTS TO DELIVER VALUE

The effective delivery of value to a customer, requires that a company organize its structure

and functions according to the type of product or offering delivered. The value chain, as

popularized by Michael Porter 1, describes a linear set of steps, which could be activities or

business processes such as design, production and sales, whereby a manufacturing company

delivers value. This value chain delivery model strives for overall efficiency and cost

reduction by increasing the efficiency and reducing the cost of each business process. Each

step is independent and separable, and can be outsourced, or contracted out to another

company. The value chain becomes a supply chain when a company uses the inputs and

activities of other companies in its manufacturing process.

However, the value chain doesn't appear to describe how many service-oriented businesses

operate. Stabell and Fjeldstad, Timmers, and Afuah and Tucci, have developed additional

concepts of "value shop" and "value network", following the work of Thompson to address

other types of businesses.

The value shop describes a service operation, such as a consulting, law or accounting firm,

that focuses on customer needs rather than on the production process of the value chain. It

may also describe a department, such as customer service, within a larger organization. For

example a manufacturing company, a value chain operation, could have within it a

department that operates as a value shop.

The e-business set up as a value shop works directly with the customer to provide a

necessary, often unique, solution. The value shop is geared to solve specific client problems

rather than to make a common solution more efficient. Some value shops, such as large

consulting companies, will attempt to duplicate solutions among clients by introducing jargon

to describe steps in an approach, and by attempting to fit the client's problem to the approach,

rather than focusing on the client's problem.

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http://www.prudens.com/patens/kbase/kbebus.html#porter1


The value network is a type of e-business where networked users negotiate a transaction on a

web site. The value network hosts online auctions, brokering, market making, intermediation,

or other types of transactions.

The value network depends on growth in order to attract more users. When the number of

users on a value network increases, the network becomes more valuable to each participant

since it increasingly becomes the site where desirable transactions will take place. Ultimately

the strategy of network dominance results in large companies like eBay, since in theory it

drives all of the users to be on one network. However, for various reasons described in a

following section, this limit is never reached, and competitors do emerge, even for a company

like eBay.

Sources of Revenue

Depending on the business model, several revenue sources may be available to an e-business.

Many online businesses will have a three or four of these sources. A mix of revenue sources

is often referred to as a revenue model but may be mistakenly called a business model. Some

of these sources of revenue are:

Advertising

Affiliation

Agent commissions

Licensing

Sales commissions

Sales profits

Sponsorship

Subscription

Syndication

Use Fees

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For large public-private or government projects revenue sources might also include:

Bonds, usually for large capital expenditures

Taxes, primarily income, property and sales taxes

Use fees and tolls

With small fast-growing companies such as e-Business startups, investors often track

expected revenues and revenue growth and may make changes to increase revenue. However,

after the Dot-Com boom ended, more traditional measures such as cash flow and earnings

have came back into favor as means of evaluation.

ACTIVITIES, RESOURCES AND CAPABILITIES

The activities, resources and capabilities of a business are sometimes known as its

requirements. In order to perform the activities required to carry out the mission of the

business, certain resources are needed; for example, employees with certain skills, or

capabilities, are needed to perform activities correctly and efficiently. Also, inventions,

processes and other intellectual property may add to the individual knowledge of an

employee to develop a competence in the performance of the required activities.

Activities

Activities are specific business processes or groups of processes such as design, production

and sales that implement the business concept. The operational business model identifies the

costs and outputs of each activity.

Activities drive the need for resources. Existing activities should be carefully scrutinized in

order to conserve resources and reduce costs. Activities left over from previous initiatives,

but not currently necessary should be curtailed. This may sound elementary but businesses

start many activities over time, especially if its business concept changes. But one doesn't

often hear of a large business curtailing its activities in order to focus on its current mission.

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E-BUSINESS PROCESSES:

Some fundamental e-business activities may infringe on patents. Business processes, or the

"method of doing business" may be patented, so that a business model may unwittingly

include the development or use of intellectual property owned by another party. Patents have

been freely awarded for even the most straight forward business processes.

Amazon.com has a patent for "one click" purchasing technology and its "Affiliates"

program.

CyberGold has a patent for pay-per-view ads where the customer enjoys an incentive

for clicking on them

Netincentives has a patent for online incentives programs, possibly in conflict with

CyberGold's

Netword LLC has a patent for a Web navigation based on keywords rather than URLs

Open Market has a patent on electronic shopping carts, on paying with credit cards

using the secure socket layer encryption and on secure credit card transactions.

However, there are now several types of shopping carts.

Priceline.com was issued a patent for its reverse auction method, that is, "name your

price" auction.

Sightsound.com has a patent for selling digital content (e.g. downloading films) on

the Web.

CI Software has a patent for EDI on the Internet

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One of the most widely renowned patent infringement cases was Amazon.com's patent for

"one click" technology for purchasing items, which was at the center of its dispute with

Barnes and Noble. One-click shopping allows the prospective buyer to bypass the use of a

"shopping cart", which is cumbersome for many users.

Amazon.com also has a patent for its "Affiliates" program, which allows the company to

market the products of other companies in return for a commission. This business process has

been used freely by traditional businesses since the beginning of recorded history and the fact

that this process has been patented is very controversial. Also controversial is Priceline.com's

patent for a reverse auction method, which it uses to sell airline tickets.

In effect, a few companies have patented Internet business models, which are being used by

many other companies. If these patents can be easily licensed at reasonable rates then there

won't be a problem in the future development of e-business. But if not, the resulting chaos

will inhibit the growth of the online business world.

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E-BUSINESS ENVIRONMENT AND STRATEGIES

The rate of change in e-business presents an enormous challenge to managers. Business on

the Internet is just beginning, and is evolving through a process of trial and error.

Management flexibility is a key for survival and success in e-business.

The environment of any organization consists of all of the factors that are beyond its control,

but influence it in one way or another. Examples of these factors are shown in the figure, E-

Business Environment and Strategies. To counter the potential adverse affects of these

factors, the e-business can respond with strategies.

An external strategy is an approach to deal with factors in the external business environment

such as competitors, markets, and technological developments, that are beyond the company's

direct control. This is different from a corporate strategy, which addresses factors under the

company's control such as the approach to marketing, sales, and pricing. Other components

of the business model such as the value proposition and sources of revenue may also include

strategies.

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THE E-BUSINESS ENVIRONMENT AND STRATEGIES

External strategies may be driven by components of the business model, such as finding

workers with certain capabilities to staff activities. If the required work force is not available

locally, the business concept may have to change, and workers brought in, or the work

outsourced. Even though strategies may be implicit in the business model, such as hire

workers at the industry wage, it is important to recognize them explicitly because they may

have to change as the business environment changes.

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THE COMPETITIVE ENVIRONMENT AND STRATEGIES

The competitive environment, sometimes known as the industry environment, results from

relationships with other firms. These relationships are with suppliers, customers, producers of

substitute products, potential new entrants, competitors, "complementary", and strategic

partners, which are described by Porter.

When suppliers are limited, they may keep prices high and reduce the profit of a firm that

buys from them. A strategy for the buyer is to find new suppliers, or producers of substitute

products. On the other hand, if there are only a few buyers, they can keep prices low, but a

strategy for the seller is to find more customers to compete for products in order to raise

prices, or to find a more profitable of their industrial capacity. Therefore the Internet serves to

increase the knowledge of prices, find producers of substitute inputs, and subsequently cause

downward pressure on prices.

Potential new entrants to a market may also disrupt prices. Either they enter the market with

low prices to gain market share, or they cause the existing firm to lower its prices in order to

create a entry barrier to the new firm. Competitors may also cause prices to drop through

price wars, but can also contribute to stability in the marketplace. Finally, complementary,

firms that make products that need the firm's product to add value (e.g. software developers

for particular PC operating systems), as well as strategic partners can create demand for the

firm's products. In each case the Internet may be used to the advantage or disadvantage of the

e-business. The point is that an e-business must have an Internet strategy to be successful.

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MAINTAIN AND IMPROVE COMPETENCIES

One obvious strategy is to develop the capabilities, and to build and maintain competencies in

order to keep an advantage over other firms. To do this, one must understand market

conditions and the firm's strengths and weaknesses.

Other strategies to maintain competencies include:

Block: The "block" strategy makes it difficult for other companies to copy business

processes and intellectual property. Blocks can be achieved by limiting knowledge

transfer about critical features or by reducing or indicating a reduction in prices.

Run: The "run" strategy means the business innovates faster than potential

competitors. To pull it off the company needs competencies in critical areas.

Strategic Alliance: The e-business works with other firms that are not usually direct

competitors. For small e-businesses, alliances may be essential since every facet of

growth can be facilitated through association with a well-known and capable partner.

Strategic alliances can solve immediate problems of developing capabilities in

distribution, shipping, and billing, and will allow the company to be "up and running"

very quickly. However, the small company should be concerned about losing its

autonomy and intellectual property to its larger partner.

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THE TECHNOLOGY ENVIRONMENT AND STRATEGIES

Technology plays an important role in e-business and must be tracked closely. It can shift

very quickly and greatly disrupt an unprepared company.

DISRUPTIVE TECHNOLOGIES

When a new technology creates a different approach to performing a task that is less costly,

more efficient, or otherwise relatively advantageous and displaces existing technology, it is

known as a disruptive technology. These technical disruptions can cause businesses to fail,

particularly in those organizations unprepared to change their business model.

Examples of disruptive technologies are:

Alternative Energy Generation at low cost.

Artificial Intelligence including Autonomous Systems.

Emergent Computing: Biocomputing, DNA Computing, Optical Computing,

Molecular or Chemical Computing, and Quantum Computing.

Global e-Commerce with the Electronic Product Code (EPC) and RFID.

Grid Computing, including Bioinformatics Grids and Economic Development Grids.

Human-Machine Interaction: Intelligent Collaboration, Intelligent Design, and

Intelligent Training Systems.

Nanotechnology.

Open Courseware.

Open Design & Problem Solving.

Parallel Computing.

Knowledge Representation and the Semantic Web.

Superconductivity.

Voice, Sight and Haptic (i.e. touch) Response Systems.

Wireless Internet.

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TECHNOLOGY STRATEGIES

Every e-business concept based on a technology break-through runs the risk of being

replaced by a company with a newer technology. Therefore, a strategy to maintain

technological leadership, or to have access to the leading applicable technologies, is essential

for the long-term survival of a technology-based e-business.

A technical innovation strategy can be as simple as outsourcing the technical side of an e-

business rather than trying to maintain the competency in-house. If it is large enough, a firm

can develop new technologies. But for most firms, an R&D program is too expensive. One

option is to partner with an organization known for developing new technologies, so that they

become available as they are developed. Co-developing and licensing technologies are also

options. The use of a strategic alliance can serve as a technology strategy, as well as a

competitive strategy.

To avoid falling victim to a new technology, a firm must try to keep abreast of technological

developments that may affect its industry. Any company that is technology-dependent must

have someone in-house who is knowledgeable about the latest technical developments. But

more importantly, the company must be willing to take action when it appears that a major

advance in technology poses a threat.

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THE GENERAL ENVIRONMENT AND STRATEGIES

The general environment contains those factors that face most businesses: laws and regulations, the economic climate, and worker availability.

Laws and Regulations

New laws and regulations may have unexpected effects on e-business, especially in the areas of privacy, patents and other intellectual property. E-Business leaders should understand regulations and the rational for local taxes, including how tax revenues are spent. Unfair tax breaks should not be expected by an e-business; neither should businesses expect to compete unfairly with other businesses.

Economic Climate

Sound financial strategies will help maintain cash flow and solvency during an economic downturn. Many small businesses simply run out of money before products begin to generate revenues. E-business should use the conservative accounting practices preferred by most investors.

Worker Availability

The availability of qualified employees is one of the biggest problems for an e-business attempting to grow from a startup into a small or medium sized enterprise. Although technical workers became available in the economic downturn after the Dot-Com crash, the availability of foreign workers decreased significantly after the terrorist attack of September 11, 2001. Larger technical companies, who had augmented their work force through hires of foreign workers prior to "9/11" now feel that must outsource large numbers of jobs abroad in order to find the talent needed to stay competitive. Whether outsourcing will be proven as a successful strategy over time remains to be seen. Certainly it will work in some situations, but it is unlikely to work in all situations.

Strategies for the local work force include obtaining and keeping qualified employees with programs such as training, child care, and employee services. Training programs are also necessary for all employees to develop skills in new technologies.

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E-BUSINESS: AN EMBATTLED BUSINESS CULTURE

its simplest form, e-business involves incorporating the Internet or its technologies to support

a basic business process. For example, your order entry system, connected directly to the

inventory database, is typically accessed from the field by sales reps calling their product

availability inquiries in to an order entry administrator.

The sales reps call in through a static GUI program or by e-mail to an order entry clerk, who

processes each inquiry by order of receipt.

The process works but may bog down during peak periods of the day or when the staff is

short-handed. Besides, the main function of the order entry staff is to process actual orders.

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Providing product availability information to the field is a related responsibility that is often

super ceded by higher priorities.

Processing last minute requests in preparation for a meeting is too often out of the question.

To complicate matters, you also have independent dealers and affiliates requiring product

availability status reports as well as inquiries on an ongoing basis.

After deciding that the product availability inquiry activity is suitable for an e-business

application, the next step is identifying the information asset(s) the process generates.

The mapping of information assets with the processes that support them is a critical

requirement in e-business application development.

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PRODUCT INQUIRY FULFILLMENT PROCESS

Instead of field personnel interacting with a character-based, static GUI or other generic front

end to generate the inquiry request, they would access a front end that is capable of running

in their browser, a personal digital assistant (PDA), or wireless hand device. The front end—

Web server—must be able to perform the function provided by the order entry staff.

That is, it must be able to access the inventory database, gather the information required by

the inquiry, format the response, and feed it back via the Internet to the appropriate place

(field) in the user’s browser, which is running the application on a laptop, home office

computer, PDA, and so on. The application also does some housekeeping chores by clearing

the inquiries from the front end and the remote database calls from the back end, or inventory

database.

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CROSSING THE DIGITAL CHASM WITH MIDDLEWARE

Most likely, the front-end Web application, or what the users see and interact with in the

browser, is developed with Internet-enabled technologies, such as Java or HTML application

tools. The back end could be, for instance, a legacy UNIX database that has been a mission-

critical application for some time.

To accomplish the interconnectivity between the front-end browser application and the back-

end UNIX database, yet another application system, typically referred to as middleware, must

be used to provide the interconnections, or compatibility, between the dissimilar front- and

back-end applications. Examples of middleware are systems developed with J2EE (Java 2

Platform Enterprise Edition).

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Developed by Sun Microsystems, J2EE is more popular in Web application development

than CORBA (common object request broker architecture), introduced by the Object

Management Group in 1991, or DCOM (distributed component object model), which is

Microsoft’s bet for an object standard. However, the other standards are growing in use for

Web application development.

With middleware in place, the e-business application provides the same functionality of the

previous system. However, the virtual process replaces the traditional product inquiry and

physical clearinghouse process and provides greater operating advantages and overall

benefits to the enterprise.

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E-BUSINESS: THE SHAPING AND DYNAMICS OF A NEW ECONOMY

E-business is a revolution: a business existence based on new models and digital processes,

fueled by hyper growth and new ideals.

It is also pursuit of new revenue streams, cost efficiencies, and strategic and competitive

advantages spawned by virtual business channels. Cutting-edge Internet technologies and

new vistas of emerging technologies enable e-business.

E-business is a forging of a new economy of just-in-time business models, whereby physical

processes are being supplanted by virtual operating dynamics. Yes, e-business is all this.

THE E-BUSINESS SUPPLY CHAIN

Typically, e-business is described and discussed with more emotion than other business areas,

and rightfully so. After all, we are witnesses to an exciting revolution.

To gain true insight and a conceptual understanding of e-business, it needs to be defined from

both the B2C and the B2B perspectives.

This section also introduces Internet, or digital, supply chains and reveals their underlying

significance to both the B2C and B2B e-business channels.

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THE B2C SUPPLY CHAIN STREAMLINES PROCESSES OF THE PHYSICAL WORLD

THE BUSINESS-TO-CONSUMER PHENOMENON

When consumers purchase goods and certain classes of services directly from the Internet,

online retailers are servicing them. In other words, online retailers, or e-tailers, have initiated

a consumer-oriented supply, or value, chain for the benefit of Internet consumers. This form

of Internet-based activity is known as business-to-consumer (B2C).

Supply chain is used interchangeably with value chain. However, supply chain, in the

traditional sense, refers to the supply and distribution of raw materials, capital goods, and so

on, that are purchased by a given enterprise to use in manufacturing or developing the

products and services for customers or in regular business operations. In B2C distribution

modes, supply, or value, chain refers to the system, or infrastructure, that delivers goods or

services directly to consumers through Internet-based channels.

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B2C e-business is a rich, complex supply chain that bears no direct analogy to the physical

world. In fact, no supply chain in the physical world compares to B2C value chains such that

an apples-to-apples comparison can be made. Thus, B2C e-channels are unique because they

are providing supply chains that streamline and enhance processes of the physical world.

Internet-driven supply chains depend heavily on the coordination of information flows,

automated financial flows, and integrated information processes rather than on the physical

processes that traditionally move goods and services from producer to consumer.

THREE CLASSES OF B2C VALUE CHAINS MAKE POSSIBLE THE

FOLLOWING E-BUSINESS REALITIES:

1) Delivery of the universe, or an unlimited number—potentially millions—of

goods and services within established markets, by operating under a single

brand identity or as a superefficient intermediary.

2). Creation of new market channels by leveraging the Internet.

3). Elimination of middlemen while streamlining traditional business processes

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E-BUSINESS: THE SHAPING AND DYNAMICS OF A NEW

ECONOMY

Amazon.com and CD Now are excellent examples of the B2C class indicated in class 1.

Amazon has succeeded by producing an efficient consumer product delivery system.

The value in this e-business channel is the uniting of many backstreet dealers under the

banner of one popular brand name. CD Now is also attempting to implement a similar

strategy. Furthermore, no one bookstore or music store in the physical world offers 10 million

titles like Amazon.com does or 325,000 CDs like CD Now does. Traditional book or CD

retailers in established markets could never offer this vast array of merchandise, because of

shelf space and inventory constraints. For example, the typical super bookstore or music

CD store stocks only 150,000 or 60,000 titles, respectively.

An example of B2C class 2 is eBay, which created a new market channel in establishing an

online auction facility. Through this e-business channel, buyers and sellers—everyday

consumers—can interact to sell personal items in a venue that did not exist previously.

Dell.com is an example of the third B2C e-business class. Dell.com is successful because it

incorporates the principle of disintermediation, or the ability to eliminate intermediaries from

the value chain. In other words, disintermediation involves disengaging middlemen, who

usually command a share of the value chain. Research has shown that intermediaries add a

large percentage to the final price of products.

Percentages range from 8 percent for travel agents to more than 70 percent for a typical

apparel retailer. Dell is a business case example of effective deployment of disintermediation

because its direct consumer model delivers custom-built computer systems at reasonable

prices by leveraging Internet channels.

In the future, other online supply chains will successfully remove middlemen, resulting

in even lower prices for other classes of goods and services.

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In summary, the Internet supply chains created to support B2C e-business initiatives have no

direct analogy in the traditional, or physical, world of commerce.

True, the two channels have similarities. The goods and services offered in physical bricks-

and-mortar retailers become sexy multimedia presentations and transaction data. E-tailers

and consumers connect via Web portals instead of driving to malls or to various business

concerns. Inventory becomes online transaction data that flows from the consumer’s

shopping cart of the online store— Web site—to fulfillment houses or directly to the

producers themselves.

B2C Value Chains Create The Following Three Types Of E-Business Realities:

1. In established markets, creation of digital supply chains that eliminate middlemen and

enable the availability of a unique service, such as Dell’s direct delivery of custom-built PCs.

2. Creation of a new market channel that did not exist in the physical universe, such as eBay’s

creation of the online auction facility for the convenience of everyday consumers.

3. Uniting of back-end, used or rare-product dealers under the banner of a popular name

brand. In effect, this creates a consortium of businesses under a single branded identity, or

under a new, superefficient intermediary, that did not exist in the physical world.

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THE BUSINESS-TO-BUSINESS PHENOMENON

B2B commerce growing from $150 billion in 1999 to $7.4 trillion by 2004! Presently, the

median transaction for B2B sites is three to four times the size of the median transaction for

B2C sites, or $800 versus $244.

Important drivers of this projected growth include, but are not limited to, competitive

advantage, reduction of costs, increased profits, and customer satisfaction. If you are able to

build an effective B2B channel, the payoff could be significant, resulting in improved

economies of scale and productivity, reduction in overhead, improved information flows and

processing, and increased operating efficiencies, to name a few.

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• REDUCE COSTS OF GOODS AND SERVICES AND POTENTIALLY

LOWER CUSTOMER PRICES.

By connecting information systems directly with suppliers and distributors, organizations

can realize more efficient processes, resulting in reduced unit costs of products or services

and, perhaps, lower prices to customers while effectively achieving economies of scale.

• REDUCE OVERHEAD . B2B channels can eliminate extraneous or redundant business

functions and related infrastructures, resulting in the reduction of overhead costs.

• INCREASE PRODUCTIVITY. By eliminating operational waste and the

automation of inefficient business practices, organizations can realize productivity gains.

• ENHANCE PRODUCT AND SERVICE OFFERINGS . With economies of

scale, reduction of overhead, operating efficiencies, and lower operating costs, such gains

may be passed on to the customer through lower prices or as enhanced or additional features

of products or services.

• CUSTOMER SATISFACTION. A strategic benefit of the successful

implementation of dynamic B2B business models is improved customer perception of the

transaction.

This metamorphosis will not occur unless companies undergo radical changes. Enterprises

will begin with critical self-examination and comprehensive process analysis to determine

what internal operating functions, underlying infrastructures, and critical practices are

necessary to transform into a B2B channel that is capable of leveraging the Internet.

This in turn will lead to the reengineering of processes, elimination of operational

inefficiencies, and, ultimately, increased productivity. If companies are successful, they will

reinvigorate their value chains, incorporate technology-driven processes that become the

foundation for B2B, and increase transactions with customers.

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END-TO-END SOLUTION

company cannot merely incorporate e-business technologies into an existing system (that is,

write something in Java). Rather, it must become an e-business through-and-through.

To reap full value, e-business methodologies should be universal throughout the

organization, from interaction with suppliers to transactions with customers.

More importantly, an e-business focused organization integrates these e-functions with core

business applications to maximize efficiencies at all operational levels. Business intelligence

is also key to the e-business model since, without the benefit of buying pattern analyses,

companies tend to simply open a Web catalog and compete on price — often with disastrous

results. Without a value add, an e-business is dead on arrival.

With this understanding, iSeries provides an ideal end-to-end solution platform. From

customer relationship management (CRM) to supply chain management (SCM), it applies

analytical business intelligence to better target e-business efficiencies. Emphasizing both

B2C and B2B practices — e-business on iSeries is so much more than simply an electronic

shopping cart application.

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E-BUSINESS FRAMEWORK

By anyone’s measure, embarking on a mission to establish a cohesive e-business project is

challenging. Couple that with the need to interoperate with tried-and-true back-office

systems, and you can end up with a task so large that a beginning point is hard to locate. To

meet this need, IBM developed the e-business Application Framework.

The Internet makes it possible to extend these mission-critical applications even further.

iSeries allows customers to easily integrate e-business solutions with line-of-business and

front-office applications that are being re-engineered as Web-based applications. iSeries is

unique in that it offers integrated (not add-on) e-business capabilities that optimize this server

for end-to-end e-business solutions and emerging workloads.

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TOOLS OF E-BUSINESS

TOOLS AND MIDDLEWARE

A wide range of tools are available to allow an iSeries or AS/400e system to play a key role

in the development and deployment of e-business applications. Within the e-business/e-

commerce modernization strategy, a number of specific categories of tools can be brought to

bear:

Application Servers are development and execution environments, many of which

come complete with developer tool sets for creating applications that may interoperate

with other like or unlike systems. These are typically based on Java and open standards-

based models.

Application Service Provider (ASP) Solutions include tools that allow Application

Service Providers to create and/or deploy applications via the Internet to multiple

customers from the ASP's site(s).

B2B Connectors & Enablers are tools specifically targeted to B2B applications and

the Internet deployment of the supply chain. Many of these tools focus on connecting

buyers and sellers via e-marketplaces, as well as other many-to-one and one-to-many

scenarios, thus consolidating the catalog and buying process.

Browser Front End to Existing Application Solutions are created with tools that

can be used to connect core business application code to a browser-based presentation

of that code via Java or HTML with little or no actual coding required on the part of the

programmer.

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New Browser-based Applications can be built from scratch using tools that create

the GUI client presentation code and the back-end processing code.

Browser Utilities can be used to create and maintain components of a Web-based

application and can also be used to build applets to access data. Other

miscellaneous tools are included here as well.

CRM Solutions are tools that are designed to assist customer service functions.

These tools include business rules that can be implemented to enhance the support

for customers.

EAI (Enterprise Application Integration) tools facilitate the connection of ERP

solutions to other back end applications, including the extraction of data from ERP,

reformatting and transport of the data across heterogeneous servers and loading of

the data into the databases used by the receiving application such as Business

Intelligence.

e-Commerce Solutions are largely “already finished” applications that can be

customized with minor effort to perform a specific purpose — generally a "shopping

cart" type of application, although some solutions may be dedicated to CRM or other

mission-critical application areas.

Electronic Data Interchange/eXtensible Markup Language (EDI/XML) refers to tools

that allow for the movement, via the Internet, of data between vendors and systems within

the supply chain.

Payment Servers are tools that validate charge card purchases by contacting the holding

card company to confirm the availability of credit for the purchaser. These tools also

provide trusted security and confidentiality routines, as is demanded more and more by

consumers when providing personal and private information.

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Portals & Personalization tools allow the creation of web portals and creation of

personalized user interfaces. Users are given the capability to save their configurations for

future web site visits.

Web Access to DB2 UDB for AS/400 is delivered via tools and utilities that provide access

from the browser to DB2 UDB for AS/400 tables. These tools may simply provide database

connection drivers via JDBC, or they may be higher level tools with their own GUI for

building queries against DB2 UDB for AS/400.

Web Report Viewers are tools that allow the end user to view iSeries or AS/400 print spool

files via a browser. These tools hold promise for workers whose jobs involve many hours of

browsing through archived AS/400 print output. These tools can also extract AS/400 print

and distribute the print files in PDF or other Web formats to Internet users via e-mail tools.

Wireless Access Solutions can be achieved by using tools for writing/extending applications

to handheld devices. As an interesting side point, the personal information management

(PIM) industry (which includes Palm Pilots and Hand Spring Visors that link to e-mail via

wireless modems) is expecting record-breaking sales in the last quarter of 2000. Wireless

access is becoming as mainstream as the cellular phone, both of which will accelerate

demand for wireless access solutions. These tools allow the programmer to deploy a 5250

application to a tier0 device with no change to the underlying RPG application in most cases.

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BUSINESS MODELS:

A method of doing business by which a company can generate revenue to sustain itself

• Spells out where the company is positioned in the value chain

• Business models are a component of a business plan or a business case

THE CONTENT OF A BUSINESS PLAN

Mission statement and company description.

• The management team.

• The market and the customers.

• The industry and competition.

• The specifics of the products and/or services

• Marketing and sales plan.

• Operations plan.

• Financial projections and plans.

• Risk analysis.

• Technology analysis.

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STOREFRONT MODEL:

• Storefront model enables merchants to sell products on the Web.

• Transaction processing, security, online payment, information storage.

• E-commerce allows companies to conduct business 24-by-7, all day every day, worldwide.

• An e-commerce storefront should include:

• Online catalog of products

• Order processing

• Secure payment

• Timely order fulfillment

SHOPPING CART TECHNOLOGY

SHOPPING CART

• An order-processing technology allowing customers to accumulate lists of items they wish

to buy as they continue to shop.

• Product catalog

• Merchant server

• Database technology

• Combine a number of purchasing methods to give customers a wide array of options

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ONLINE SHOPPING MALLS

• Wide selection of products and services.

• Offers greater convenience than shopping at multiple online shops.

• Consumers can make multiple purchases in one Transaction.

AUCTION MODEL

• ONLINE AUCTION SITES

• Act as forums through which Internet users can log-on and assume the role of either bidder

or seller.

• Collect a commission on every successful auction.

• Sellers post items they wish to sell and wait for buyers to bid.

RESERVE PRICE:

• The minimum price a seller will accept in a given Auction.

REVERSE AUCTIONS

Allow the buyer to set a price as sellers compete to match or even beat it.

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PORTAL MODEL

PORTAL SITES

• Give visitors the chance to find almost everything they are looking for in one place

HORIZONTAL PORTALS

• Portals that aggregate information on a broad range of topics.

• Yahoo!, AltaVista, Google.

VERTICAL PORTALS

• Portals that offer more specific information within a single area of interest.

• WebMD.

HORIZONTAL PORTALS

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DYNAMIC PRICING MODELS

• The Web has changed the way products are priced and purchased.

COMPARISON PRICING MODEL

• Web sites using shopping both technology to find the lowest price for a given Item.

DEMAND-SENSITIVE PRICING MODEL

• Group buying reduces price as volume of sales increase.

NAME-YOUR-PRICE MODEL

• Name-your-price for products and services.

BARTERING MODEL

• Individuals and business trade unneeded items for items they desire.

REBATE MODEL

• Sites offer rebates on product at leading online retailers in return for commission or

advertising revenues.

FREE OFFERING MODEL

• Free products and services generate high traffic.

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E-BUSINESS ADVERTISING

• Traditional

• Television, movies, newspapers and magazines

• Establish and continually strengthen branding

• Brand is a symbol or name that distinguishes a company and its products or services from

its competitors and should be unique, recognizable and easy to remember.

• Publicize URL on direct mailings and business cards

• Online advertising

• Place links on other sites, register with search engines

BANNER ADVERTISING

• BANNER ADS

• Located on Web pages, act like small billboards, usually contain graphics and an

advertising message.

• Increased brand recognition, exposure and possible revenue.

SIDE PANEL ADS OR SKYSCRAPER BANNERS

• Advertisements that lie vertically on Web sites

• Place logo on banners, enhancing brand Recognition

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BANNER ADVERTISING

• Inventive color schemes and movement.

• Flashing, scrolling text, pop-up boxes and color changes.

• Pop-up box is a window containing an advertisement that appears separate from the screen

the user is viewing, pops up randomly or as a result of user actions (can have a negative

effect due to their intrusive nature)

• Determine the best position on sites for a banner

• Web sites cluttered with ads annoy visitors

• Space can be more expensive during high traffic

• Exchanging banners with another site

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BUYING AND SELLING BANNER ADVERTISING

• Buy advertising space on sites that receive a large number of hits and target a similar

market.

• Selling ad space provides additional income.

• Monthly charges for online advertising rarely used.

CPM (COST PER THOUSAND)

• A designated fee for every one thousand people who view the site on which your

advertisement is located.

• ADVERTISING PAYMENT OPTIONS

• Pay-per-click: you pay the host according to the number of click-through to your site

• Pay-per-lead: you pay the host for every lead generated from the advertisement.

• Pay-per-sale: you pay the host for every sale resulting from a click-through.

• Selling advertising space.

• Provide appropriate contact information on your Web site.

• Register with organizations that will sell your space for you.

• These companies typically charge a percentage of the revenue you receive from the Advertisements placed on your site.

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ORGANIZATIONAL STRATEGIES FOR E-BUSINESS

To be successful in e-business, an organization must master the art of electronic relationships.

Traditional means of customer acquisition such as advertising, promotions, and public

relations are just as important with a Web site.

Primary business areas taking advantage of e-business include:

• MARKETING SALES

• FINANCIAL SERVICES

• PROCUREMENT

• CUSTOMER SERVICE

• INTERMEDIARIES

MARKETING/SALES

Direct selling was the earliest type of e-business and has proven to be a steppingstone to more

complex commerce operations. Successes such as eBay, Barnes and Noble, Dell Inc., and

Travelocity have sparked the growth of this segment, proving customer acceptance of e-

business direct selling. Marketing and sales departments are initiating some of the most

exciting e-business innovations

.

Cincinnati’s WCPO-TV was a ratings blip in 2002 and is now the number three ABC

affiliate in the nation. WCPO-TV credits its success largely to digital billboards that promote

different programming depending on the time of day. The billboards are updated directly

from a Web site. The station quickly noticed that when current events for the early-evening

news were plugged during the afternoon, ratings spiked.

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The digital billboards let several companies share one space and can change messages

directly from the company’s computer. In the morning, a department store can advertise a

sale, and in the afternoon, a restaurant can advertise its specials.

Eventually customers will be able to buy billboard sign time in hour or minute increments.

Current costs to share a digital billboard are $40,000 a month, compared with $10,000 for one

standard billboard.

FINANCIAL SERVICES

Financial services Web sites are enjoying rapid growth as they help consumers, businesses,

and financial institutions distribute information with greater convenience and richness than is

available in other channels. Consumers in e-business markets pay for products and services

using a credit card or one of the methods outlined.

Online business payments differ from online consumer payments because businesses tend to

make large purchases (from thousands to millions of dollars) and typically do not pay with a

credit card. Businesses make online payments using electronic data interchange (EDI)

Transactions between businesses are complex and typically require a level of system

integration between the businesses.

Many organizations are now turning to providers of electronic trading networks for enhanced

Internet-based network and messaging services. Electronic trading networks are service

providers that manage network services. They support business to- business integration

information exchanges, improved security, guaranteed service levels, and command center

support.

As electronic trading networks expand their reach and the number of Internet businesses

continues to grow, so will the need for managed trading services. Using these services allows

Organization to reduce time to market and the overall development, deployment, and

maintenance costs associated with their integration infrastructures.

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PROCUREMENT

Web-based procurement of maintenance, repair, and operations (MRO) supplies is expected

to reach more than $200 billion worldwide by the year 2009. Maintenance, repair, and

operations (MRO) materials (also called indirect materials ) are materials necessary for

running an organization but do not relate to the company’s primary business activities.

Typical MRO goods include office supplies (such as pens and paper), equipment, furniture,

computers, and replacement parts.

In the traditional approach to MRO purchasing, a purchasing manager would receive a

paper-based request for materials. The purchasing manager would need to search a variety of

paper catalogs to find the right product at the right price.

Not surprisingly, the administrative cost for purchasing indirect supplies often exceeded

the unit value of the product itself. According to the Organization for Economic Cooperation

and Development (OECD), companies with more than $500 million in revenue spend an

estimated $75 to $150 to process a single purchase order for MRO supplies.

E-PROCUREMENT

E-procurement is the B2B purchase and sale of supplies and services over the Internet. The goal of many e-procurement applications is to link organizations directly to preapproved suppliers’ catalogs and to process the entire purchasing transaction online. Linking to electronic catalogs significantly reduces the need to check the timeliness and accuracy of supplier information.

An electronic catalog presents customers with information about goods and services offered for sale, bid, or auction on the Internet. Some electronic catalogs manage large numbers of individual items, and search capabilities help buyers navigate quickly to the items they want to purchase. Other electronic catalogs emphasize merchandise presentation and special offers, much as a retail store is laid out to encourage impulse or add-on buying. As with other aspects of e-business, it is important to match electronic catalog design and functionality to a company’s business goals.

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CUSTOMER SERVICE

E-business enables customers to help themselves by combining the communications

capability of a traditional customer response system with the content richness only the Web

can provide—all available and operating 24x7. As a result, conducting business via the Web

offers customers the convenience they want while freeing key support staff to tackle more

complex problems. The Web also allows an organization to provide better customer service

through e-mail, special messages, and private password-Web access to special areas for top

customers.

Customer service is the business process where the most human contact occurs between a

buyer and a seller. Not surprisingly, e-business strategists are finding that customer service

via the Web is one of the most challenging and potentially lucrative areas of e-business. The

primary issue facing customer service departments using e-business is consumer protection.

CONSUMER PROTECTION

An organization that wants to dominate by using superior customer service as a competitive

advantage must not only consider how to service its customers, but also how to protect its

customers. Organizations must recognize that many consumers are unfamiliar with their

digital choices, and some e-businesses are well aware of these vulnerabilities.

For example, 17-year-old Miami high school senior Francis Cornworth offered his “Young

Man’s Virginity” for sale on eBay. The offer attracted a $10 million phony bid. Diana Duyser

of Hollywood, Florida, sold half of a grilled cheese sandwich that resembles the Virgin Mary

to the owners of an online casino for $28,000 on eBay.

highlights the different protection areas for consumers. Regardless of whether the customers

are other businesses or end consumers, one of their greatest concerns is the security level of

their financial transactions.

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This includes all aspects of electronic information, but focuses mainly on the information

associated with payments (e.g., a credit card number) and the payments themselves,

that is, the “electronic money.” An organization must consider such issues as

encryption, secure socket layers (SSL), and secure electronic transactions (SET)

NEW TRENDS IN E-BUSINESS: E-GOVERNMENT

AND M-COMMERCE

Recent business models that have arisen to enable organizations to take advantage of the

Internet and create value are within e-government. E-government 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. customer-focused links connect users to millions of Web pages, from the federal

government, to local and tribal governments, to foreign nations around the world.

M-COMMERCE:

In a few years, Internet-enabled mobile devices will outnumber PCs. Mobile commerce , or

m-commerce , is the ability to purchase goods and services through a wireless Internet-

enabled device. The emerging technology behind m-commerce is a mobile device equipped

with a Web-ready micro-browser. To take advantage of the m-commerce market potential,

handset manufacturers Nokia, Ericsson, Motorola, and Qualcomm are working with

telecommunication carriers AT&T Wireless and Sprint to develop smartphones. Using new

forms of technology, smart phones offer fax, e-mail, and phone capabilities all in one, paving

the way for m-commerce to be accepted by an increasingly mobile workforce. Figure 3.33

gives a visual overview of m-commerce.

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Amazon.com has collaborated with Nokia to pioneer a new territory. With the launch of its

Amazon.com Anywhere service, it has become one of the first major online retailers to

recognize and do something about the potential of Internet enabled wireless devices. As

content delivery over wireless devices becomes faster, more secure, and scalable, m-

commerce will surpass landline e-business (traditional telephony) as the method of choice for

digital commerce transactions.

According to the research firm Strategy Analytics, the global m-commerce market was

expected to be worth more than $200 billion by 2005, with some 350 million customers

generating almost 14 billion transactions annually.

Additionally, information activities like e-mail, news, and stock quotes will progress to

personalized transactions, “one-click” travel reservations, online auctions, and

videoconferencing.

M-COMMERCE TECHNOLOGY OVERVIEW

1900s. Technology is a primary force driving these changes. Organizations that want to

survive must recognize the immense power of technology, carry out required organizational

changes in the face of it, and learn to operate in an entirely different way.

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OFFICIAL SITES OF E-BUSINESS Flipkart

Website: (www.flipkart.com)

Flipkart is an Indian e-commerce company headquartered in Bangalore, Karnataka. It was

founded by Sachin Bansal and Binny Bansal in 2007. In its initial years, Flipkart concentrated

on online sales of books, but it later on expanded to electronic goods and a diversity of other

products. Flipkart offers multiple payment methods like credit card, debit card, net banking,

e-gift voucher, and the major of all Cash on Delivery. The cash-on-delivery model adopted

by Flipkart has proven to be of great significance since credit card and net banking

penetration is very low in India.

2. Snapdeal :

Website: (www.snapdeal.com)

Snapdeal is a leading online marketplace, headquartered in New Delhi, India. Snapdeal

features products across categories like mobiles, electronics, fashion accessories, apparel,

footwear, kids, home and kitchen, sports, books; and services like restaurants, spas &

entertainment amongst others. The company was started by Kunal Bahl, a Wharton graduate 94

http://www.snapdeal.com/

http://www.flipkart.com/

REPORT ON E-BUSINESSand Rohit Bansal, alumnus of IIT Delhi, in February 2010. Snapdeal also provides discounted

deals connecting with local merchants.

3) Fashionandyou :

Website: (www.fashionandyou.com)

Fashion and You is a private invitation only shopping club, based in Gurgaon, India. It was

founded by Harish Bahl in November, 2009. The fashion site features collections by top

designers for men, women and children for up to 80% off retail prices. Fashion and You

obtain authentic designer merchandise straight from the brand and provides it exclusively to

its members through limited-time events.

4. Myntra:

Website: (www.myntra.com)

Myntra was established by Mukesh Bansal, Ashutosh Lawania, and Vineet Saxena in

February 2007. All three are IIT graduates, and have worked for several start-ups. Myntra is

headquartered in Bangalore and has been funded by Venture Capital funds like IndoUS, IDG

& Accel Partners. Myntra.com works as an online shopping retailer of fashion and casual

lifestyle products. The company started off in the business of personalization of products, and

soon expanded to set up regional offices in New Delhi, Mumbai and Chennai.

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http://www.fashionandyou.com/


5. Homeshop18:-

Website: (www.homeshop18.com)

HomeShop18 is the online and on-air retail and distribution venture of Network 18 Group,

headquartered in NOIDA, India. HomeShop18 was launched on 9 April, 2008 as India's first

24-hour Home Shopping TV channel, where anchors performed live demonstration of

products on sale. The television channel established HomeShop18's foothold in Indian retail

because of high television penetration. Later, as the internet reach grew all over the country,

HomeShop18 expanded to the internet.

8. Yebhi.com:

Website: (www.yebhi.com)

Yebhi.com is an Indian Online shopping E-commerce portal for Home, Lifestyle & Fashion

e-retailer, launched in the year 2009. Yebhi, which began as BigShoeBazaar.com, has a

registered user base of about 1.5 million people, of who about half a million have transacted

on the site. Nexus Venture Partners and N. R. Narayana Murthy’s Catamaran Ventures

invested 40 crore in Agarwal’s company in mid-2011. On July' 10th 2012, Big Shoe Bazaar

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http://www.homeshop18.com/

REPORT ON E-BUSINESSIndia Pvt Ltd. owner of Brand Yebhi.com announced that it has raised 100 Cr in Series C

round of funding led by Fidelity Growth Partners India and Qualcomm.

9) Caratlane:

Website: (www.caratlane.com)

Caratlane is India's first online jewellery store with an assorted range of diamond jewellery

designs to offer every customer. They offer more than 1,40,000 loose diamonds, and over

1000 ready to choose diamond jewellery online like diamond rings, pendants, earrings,

bracelets, bangles and gold coins for all budgets. The quality & authenticity of diamond

jewellery is validated with BIS Hallmarking and Certification from International labs like

GIA, IGI, HRD and AGS. The website offers discount up to 25 percent of prices. This

advantage is achieved with no inventory cost, minimal overhead cost, no intermediaries and

in-house manufacturing facility.

Buying jewellery online in India is more challenging with the lack of touch and feel factor.

To counter this, Cartlane.com also offers ‘try at home’ facility before buying a jewellery

online, to ensure complete satisfaction of look and size. The clients also receive personalized

service from the qualified jewellery consultants every time they buy jewellery online. With

easy payment options including convenient 6 or 12-month EMIs, customers can enjoy free,

insured delivery anywhere in India.

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Research Limitation

One of the limitations in research includes lack of adequate information on a

particular subject.

Research equipments are very hard or expensive to acquire leading to

formulation mere assumptions. Another hindrance is poor or inaccessibility to

the region of study.

Some of the limitations of doing a research include access of information,

availability of enough resources and time management. The availability of

experts in editing and guidance may also be minimal where support from

friends or organisation may not be enough.

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DATA ANALYSIS AND INTERPRETATION AND FINDINGS

CONCLUSIONS:-

community consensus on essential details to improve quality of products

and services based on real requirements of end-users.

successful implementation among early adopters which then results in a

faster and broader adoption process.

greater flexibility for innovation and increased revenues.

the differentiation by cost, availability, speed, reach and flexibility when

the product becomes a commodity, as profit margins decrease.

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