Lect 1 E-BusinessAndTechnology

8/3/2019 Lect 1 E-BusinessAndTechnology

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From E-Commerce to E-Business

The Convergence of Business and Technology

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Key Questions

Did e-commerce start with the Internet and the

Web?

Whats the difference between e-commerce and

e-business? If the Web is so great, why did all those

companies fail?

Are web services the next big thing in e-business?

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3/25

Electronic Commerce (narrow

definition)

3

Conducting business transactionsthrough market-

facing systems.

EDI orders from customers

Selling products on-line

Delivering services on-

line

Purchasing goods and

services electronically

Procurement

Order-to-Cash

C

US

T

O

ME

R

SSUPPLIERS


4/25

Electronic Commerce (expanded

definition)

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Conducting businessthrough market-facing systems.

EDI orders from customers

Selling products on-line

Delivering services on-

line

Purchasing goods and

services electronically

Procurement

Order-to-Cash

Providing product

information to prospective

customers

Customer self-help

Pre-Sales

Post-Sales

Exchanging engineeringdrawings with partners

Commercialization

PARTNERS

Reviewing and updating

benefits information

Benefits Administration

EMPLOYEES

C

US

T

O

ME

R

SSUPPLIERS

electronic business


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The Beginning of E-Commerce

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B2B B2C B2E

System to

Individual

System toSystem

Electronic

Transactions

Phone System

Automation

Phone System

Automation

Phone System

Automation1980s

1980s

1980s


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and the Supporting Technologies

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B2B B2C B2E

System to

Individual

System toSystem

EDI

IVRIVRIVR 1980s

1980s


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Electronic Data Interchange

7

PrivateNetwork

Enterprise A

MiddlewareTranslator


Enterprise B

EDI standard documents

Connect with private networkTranslate documents


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Integrated Voice Response

Applications

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Core Business Systems


Public Phone

Network

IVR System Data servers

Telephone

Corporate

Phone

Network

Install specialized systemConnect to phone network

Make core systemsaccessible by IVR system


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Evolution to E-Business

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B2B B2C B2E

System to

Individual

System toSystem

Electronic

Transactions

Customer Relationship

Mgmt

Phone System

Automation

Employee Self-service

Phone System

Automation

Marketing Info

E-Tailing

Phone System

Automation

Marketing Info

Customer Self-service

1980s

1990s

1980s

1990s

1990s


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and the Supporting Technologies

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B2B B2C B2E

System to

Individual

System toSystem

EDI

Internet/XML

IVR

Intranet/Web

IVR

Internet/Web

IVR

Internet/Web Internet/Web

1980s

1990s

1980s

1990s


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Internet System to System

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Enterprise A



Enterprise B

Internet

XML documents

Connect with InternetAdd robustness, redundancy, security

Connect with other enterprise

Translate documents


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Web Applications

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Core Business Systems


InternetWeb server

Commerce application

serverData servers

Browser

The ubiquitous web browser

Make core systemsaccessible by apps on app

server


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Internet economy poses opportunities

and threats

Transform traditional business models using IT as enabler

Compression of time & space

30% of BancAmericas online customers are outside of traditional

geographic area

Adaptec reduces manufacturing cycle from 12 to 8 weeks, slashing$10M in inventory costs

Always open

Friction reduction creating new sources of economic value

Intermediation premium (e.g. brokers fee)

Manual sourcing by fax and phone Cost of brick & mortar

But adding market turbulence

The Internet will change everything.

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Market TurbulenceTravel, Brokerage, Books

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CustomerSpace

(Physical

World)

TraditionalCompetitor

Merrill Lynch

Travel AgenciesLocal Bookstores

Internet

Preview TravelAmazon.com

New CustomerSpace

Internet-OnlyCompetitor

ETrade

Internet

(New Channel)

Sabre, Travelocity

Barnes & Noble

Schwab

TheActor

MS Expedia

Out-of-MarketCompetitor

Intuit

Courtesy: Cisco Systems


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The Ultimate Impact

The Internet dramatically lowers the cost of

communication

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Potential Revolutionary Impact

Financial ServicesEntertainment

Health Care

Education

Government

But:Privacy issues

Need for additional technology (e.g.

broadband, on-line bill paying)

Who controls the information

Likely Incremental Impact

RetailingManufacturing

Travel

Power

Why?physical factors overrulevirtual

Top of the line web site $15-25M

Warehouse & distribution system

$150M

Co

urtesy:BusinessWeek


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New Tools for the Old Economy

Tremendous tools for old economy companies

to apply to business processes.

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Annual Growth Rate in Nonfarm Business Productivity

0

0.5

1

1.5

2

2.5

3

'80-'85 '85-'90 '90-'95 '95-'00

Source: Bureau of Labor Statistics

Annualgrowthrate(%) Worldwide B2B Transactions

0

1

2

3

4

'99 '00 '01 '02 '03

Source:Forrester Research Inc.

Trillio

nsofdollars


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Challenge: Process Improvement

E-Business is like putting a magnifying glass in

front of your core processes

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Legacy Business Operational Processes

Legacy Back Office Systems

New Business Operational Processes

ERP

Order to

Cash

Manufac-

turing

Procure-

ment

Finance

from

to


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Challenge: Systems Development

Product software development and information

systems development are becoming intertwined

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Product Software Information Systems

Network

from

to


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Challenge: Commercialization

Product commercialization must become business

commercialization

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Discovery &

InnovationDefinition

Design

Implementation

Mfg./Operations

ImplementationProduction

0

Opportunity

Selection

2 4 6 7C

Innovation Phases Commercialization Phases

Business

Hypothesis

Business

Development

Planning

Business

DevelopmentBusiness Start-Up

Business

Building

DCBA

New Business Development Phases


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Why Did the .com Companies Fail?

Flawed business model

Companies view the technology as their business,

rather than having a business

Lose money on individual transactions Amazon.com loses almost $3 per order on multi-product orders

Lack of control over supply of what they sell

Priceline.com

All the good ideas duplicated by established concernswith deep pockets and staying power

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Web Servicesthe Future?

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B2B B2C B2E

System to

Individual

System toSystem

EDI

IVR

Intranet/Web

IVR

Internet/Web

IVR

Internet/Web Internet/Web

2000s

Internet/XML

Web

Services

Web

Services

Web

Services


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Web Servicesready for prime

time?

Favorable Signs

Takes component

foundation

Reuse culture

Semantic agreement and leverages Internet

technologies

http

XML

Challenges

Cross-vendor

interoperability

Simplicity

Security Pre- and post-transaction

processes

Trading partner

agreements

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Core Services

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ProviderRequestor

Who does

this

service?

Request

Service

DeliverService

Directory

Services-UDDI

Deploy

Service


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Helper Services

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Provider

Requestor

Who doesthis

service?-Products

-PriceDeploy

Service

Request

Service

DeliverService

Directory

Services-UDDI

Do we

want to do

business

with them?-T&Cs

-Reliability Do we

want to do

business

with them?-T&Cs

-Risk

Credit Services

Evaluating risk

Underwriting risk

Record

activity &

settle

payment

Billing &

Payment

Services

Tax

Import/export

Define

business

and

business

terms

Directory

Services-UDDI

-other


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Summary

E-business has been around for 20+ years, but the

opportunities have been accelerated by the Internet

and the web.

Business is still business The Internet hasnt changed that though for a while

many thought it might have.

Web services maybe the next big thing, but

EDI, IVR, etc. will probably still be around.

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Lect 1 E-BusinessAndTechnology

Documents

Transcript of Lect 1 E-BusinessAndTechnology