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E-Business and E-Commerce

E-Business and E-Commerce. MIS Chapter 5. Jack G. Zheng May 23rd 2008. Introduction. What is e-commerce “Electronic commerce (e-commerce) is any transaction completed over a computer-mediated network that involves the transfer of ownership or rights to use goods or services.”*

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E-Business and E-Commerce

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  1. E-Business and E-Commerce MIS Chapter 5 Jack G. Zheng May 23rd 2008

  2. Introduction • What is e-commerce • “Electronic commerce (e-commerce) is any transaction completed over a computer-mediated network that involves the transfer of ownership or rights to use goods or services.”* • Or simply, buying and selling on the Internet (Web) • What is e-business • “Electronic business (e-business) is any process that a business organization conducts over a computer-mediated network.”* • “Any business processes (activities)” include both internal and external, transactional and non-transactional • It covers e-commerce * See http://www.census.gov/epcd/www/ebusines.htm

  3. E-Commerce Models • B2C (business to consumer) • The most well known • B2B (business to business) • The largest segment (12 times more than B2C) • C2C (consumer to consumer) • Auction sites such as ebay.com • C2B (consumer to business)? • Not well implemented • Usually means buyer-centered reverse auction • priceline.com

  4. E-Commerce Growth • E-Commerce Growth in the USA

  5. E-Activity? E-Society? Individual Consumer Employee Member Resident /Non-resident Student Organization Education Non-profit Company Government Community

  6. B2C E-Commerce (e-Tailer) Styles • Pure plays • No physical stores • Amazon, Dell, E*Trade … • Click(s)-and-mortar • Retailers which has both an Internet presence and physical stores (or retail agent) • In contrast to brick-and-mortar • M-Commerce • “M” for mobile – using mobile devices like cell phone, PDA, or laptop

  7. Advantages and Problems of B2C

  8. What is likely to be sold online? • Commodity-like products • Product features are uniform and standard; look and feel is not important • Are the following commodity like products? • Books? • Electronics? Computer (parts)? • Furniture? • Clothes? Shoes? • Grocery? (Webvan case study) • Why did it fail? • Are there opportunities for online grocery? What are the ways to succeed?

  9. Digital Products • Digital products (information products): software, video, music, e-book, articles, reports, news … • They don’t have physical appearance • They are easy to be mass-customized and personalized • They can be delivered at the time of purchase • Fixed cost is high while marginal cost is close to zero • The distribution of information products is expected to change dramatically in future • They have global reach • They foster disintermediation • Information product medium is less important • Unbundling: only pay for the part you want • Micro-payments

  10. How B2B is different from B2C? • MRO (maintenance, repair and operation materials) • Indirect materials • Materials that are necessary for running a business, but do not directly contribute to the primary business activities • For example, office supplies • Direct materials • Directly used in manufacturing or service • Critical to their business

  11. How B2B is different from B2C? • Transaction is • Contracted • Regular, continuous and repeated • Large amount • More procedures • Billing and payment is • Regular, continuous and repeated • Usually separate from delivery • Large amount • More procedures

  12. B2B Automation • B2B has the need to be automated by computer systems • Save cost (human labor) • Save time (lead time) • There is the need to integrate computer systems and processes from both parties • EDI (Electronic Data Interchange) • XML and Web Services

  13. EDI (1) • EDI is the direct computer-to-computer transfer of transaction information in standard business documents, in a standard format • Computer-to-computer exchange • Over a telecommunication network (VAN, or the Internet)

  14. EDI (2) • Standard business document • Formal business document, such as request for quotation and purchase order (ANSI X12) • Standard format • A fixed, predefined format that both computer system can understand • EDI replaces paper documents processing, thus • shortens purchase/supply cycle • lower labor costs

  15. E-Commerce Payment Systems • B2C/C2C • Credit cards and smart cards (cash cards) • Electronic check (electronic transfer) • Financial cybermediary (online payment service) • PayPal • Electronic Bill Presentment and Payment (EBPP) systems • Digital wallet • B2B • Financial EDI (FEDI), which directly involves banks

  16. Good Resources • E-Stats from US Census • http://www.census.gov/eos/www/ebusiness614.htm • CIO.com eCommerce Center • http://www.cio.com/research/ec/ • Web security • http://www.secinf.net/websecurity/

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