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Electronic Commerce Solutions and Applications in SCM, CRM

Electronic Commerce Solutions and Applications in SCM, CRM. Prof. Bharat Bhasker Indian Institute of Management Lucknow. Electronic Commerce. Delivery of Information, Product/Services, and payments through electronic means Online capability of buying & selling goods over the internet

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Electronic Commerce Solutions and Applications in SCM, CRM

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  1. Electronic CommerceSolutions and Applications in SCM, CRM Prof. Bharat Bhasker Indian Institute of Management Lucknow

  2. Electronic Commerce • Delivery of Information, Product/Services, and payments through electronic means • Online capability of buying & selling goods over the internet • Reducing service costs, improving quality of goods and increase in speed of service delivery through electronic media

  3. E-Commerce It’s concerned with systems and business processes that support - • Creation of Information Sources • Effective and efficient interaction among producers, consumers, intermediaries and sellers • Movement of information on global networks

  4. Increasing efficiency and speed of business transactions, processes, and improving customer relationship & services More Specifically - • Enable enterprise to conduct business with geographically dispersed partners • Streamlining procurement and distribution processes at reduced cost • Achieve closer customer-vendor relationship • Reducing length of production cycles • Increase number of trading partners • Enable small businesses to reach global marketplace

  5. Types of e-commerce • Tangible goods • Digital goods software, music / audio, text (news, research), pictures, video • Services stock trades, airline tickets, insurance

  6. E-Commerce Growth

  7. E-Commerce Growth

  8. E-Commerce Growth

  9. E-Commerce Growth

  10. Elements of Markets Information Exchange Marketing Contracts & Orders Customer Service Shipments & Payments

  11. Traditional Model

  12. Electronic Market Perspectives Industry’s Perspective Dealers Manufacturers Open Markets Direct Transactions Low Transaction Cost Direct Market Access Electronic Market Customer

  13. Impact of Electronic Commerce • Financial values— • Restructuring of Supply Chain • Strategic values— • competitive advantage - business procedures • Customer Relationship Management

  14. What is Supply Chain Management • Refers to the coordinated “flows” between a network of suppliers, producers, and customers • Materials (supplies, finished products, repairs) • Information (needs, plans, pricing, promotion) • Finances (payments, credits, coupons) • Material flow from suppliers and their "upstream" suppliers at all levels • Materials are transformed into semi-finished and finished products • Products are distributed to direct customers and their "downstream" customers at all levels

  15. BlueDart Customer Rs 300.00 FreshMangoes.com The Supply chain (Distribution) Retailer Rs. 120.00 Jobber Rs. 35.00 Customer Rs. 375 Wholesaler (Multilayer) Rs. 60.00 Mango Grower

  16. Unit price Producer Wholesaler Retailer Consumer 52.7 0% Producer Wholesaler Retailer Consumer 41.4 28% Producer Wholesaler Retailer Consumer 20.5 62% Increase in added value / unit price in the value chain Producer Wholesaler Retailer Added value 20.5 11.3 20.9 20.5 31.8 52.7 Sales price What will change in the value chain? (Benjamin & Wigand, 1997)

  17. Acquisition Customers Selection CRM Cross-Selling Retention Customer Relationship Management • “Process of creating and maintaining relationships with business customers or consumers” • “A holistic process of identifying, attracting, differentiating, and retaining customers”

  18. Customer Relationship Management Bottom-line: The use of information-enabled systems for enhancing individual customer relationships to ensure long-term customer loyalty and retention Traditionally CRM means – • Sales Force Automation (SFA) • Customer Service and Support (CSS) • Help Desk • Field Service • Marketing Automation

  19. Marketing – 75 years ago • Production – a la Adam Smith • You can have any color as long as it’s black – Ford Motor Co.

  20. Marketing - today 5 Add the spice of flexibility, courtesy of robotics, computers …

  21. New approach to Customer Relationship TO: Finding products that are right for each customer TURN the process through 90 degrees FROM: Finding customers that are right for each product Products: 1 2 3 4 5 …..

  22. Mass production Cheap to produce Efficient to produce Uniform features/quality ‘one size fits all’ approach Optimize production cost Customization Expensive to produce Inefficient to produce Customized features ‘tailor made’ approach customer satisfaction “Mass Customization” – B. Joseph Pine • Mass customization • Cheap & efficient to produce • Customized features • ‘tailor made’ approach • Optimize production cost & customer satisfaction

  23. Need Creation (attract to website) anticipate/stimulate Need Creation

  24. (If you're not Bharat Bhasker, click here.) You have 6 new messages. Your Message Center Science Fiction & Fantasy History Computers & Internet Your Shopping Cart You have 0 items in your Shopping Cart. More Categories Personalized experience in B2C e-commerce – Amazon.com Bhasker’s Store Bhasker’s Gold Box Bharat Bhasker, like to read magazines? Like to receive $10--or $20? Visit Today's Deals. • Use of Web mining • cookies to identify user • analysis of user’s past behavior and • ‘peer group analysis’ for • personalized messages • category recommendations • ‘gold box’ offers • Use of clustering, association analysis, • temporal sequence analysis, etc.

  25. Case Study for SME

  26. Consumer Chips Corporation CEO - Wakes Up • Consumer E-Commerce will jump to Trillion $ by 2004? • Competition is already working on a e-business plan. • A meeting is held ==> Enter the e-commerce era in SIX WEEKS. Should you Panic? • Decide a name? and register it with InterNIC, NSI, APNIC • Start Planning • Require Software(s) for • managing products • promotions • customers • orders Additional Software • Tax issues • shipping • payment processing

  27. Consumer Chips CorporationRealization • Start from scratch: Six weeks? Time to start looking for a new job • Off-the shelf solutions- look for one that supports core features and allows you to plug-in other software modules to handle complexities of taxation, shipping and forms of payments. • What are those ? • Intershops epages ; iCat’s Lemonade Stand; Yahoo’s Stores These allow you to pick up a design and pop in your products; You are ready to Go! • InterShop 3.0, iCat Professional let you customize templates • ASP, Net.Commerce • Most of these allow plug and play payment processing, Taxware for tax calculations, Tandata for shipping information

  28. Consumer Chips Corporation • Customer: Who are your target customers and what do they need? Awareness and advertising: • Merchandising: What products will you offer and how will you position and display them to your customers? • Sales service: How will you answer customers' questions and solve their problems? • Promotions: How will you promote merchandise and services to give customers incentives to make purchases? • Transaction processing: How will you handle orders, tax, shipping, and payment processing? • Fulfillment: How will you pass orders to the fulfillment center? • Post-sales service: How will you provide customer service and answers to order-status questions after the sale? • Marketing data and analysis: What information about sales, customer, and advertising trends will you gather? How will you use it to make decisions? • Brand: How will you communicate with customers during each of these interactions in a way that reinforces your unique company image?

  29. Consumer Chips Corporation Requirement Document Displaying products We want customers to be able to tell us what kind of computer equipment they have. Then we'll tell them what kind of memory chips work with their computers. If we know the make and model of their equipment, then we can recommend chips in 8-MB, 16-MB, 32-MB, and 64-MB flavors. Sophisticated customers may already know the model number of the memory chip they want, but these products are changing all the time. We'll need a tool where we can make changes to the products we offer in real time. Order and transaction processing Customers will want to buy more than one item at a time, so we'll need to let them build an order before checking out. Then we'll need to accept major credit cards and calculate tax, shipping, and handling charges. Plus, we'll be shipping within 24 hours of the order, so we'll need to verify the credit card information before we accept the order. Attracting customers We want to use a variety of lead-generating tactics, such as buying banner ads, registering with search engines, and sending direct email to get qualified customers to the site. We'll also want to know which of these tactics gets the most customers to our site so that we can figure out which advertising investments make the most sense.

  30. Consumer Chips Corporation Requirement Document Fulfillment and customer service Orders that arrive on the server need to be relayed to the fulfillment center quickly so that we can pick, pack, and ship the memory chips before the FedEx truck shows up at 5 p.m. We also want to be able to let customers get the status of their orders so that they don't have to call us. Software and hosting We want to host the site with a third party. Staying up 24/7 monitoring servers is not our idea of fun. We've seen a number of e-commerce software packages on the market but are confused about which one is right for us. Help!

  31. Consumer Chips Corporation

  32. Consumer Chips Corporation

  33. Consumer Chips Corporation

  34. Consumer Chips Corporation • Taxes - Don’t forget to pay? Sooner or later they will catch up? Each state may have different laws. Use Tax plug-in such as Taxware on your system or use Cybersource to integrate an do-demand service bureau, meaning tap into the service through Internet. • Shipping - Tan data provides data about major shippers and rates. It also can let you track. FedEx and UPS have started direct integration services. • Payment- Credit Cards? Debit Cards? Purchase Order? Customer accounts? • Credit Cards -- When can you transfer money? Authentication, Authorization, Settlement ( Depends on the law of the land) • CyberCash • Cash on Delivery (CoD) • Security Balanket URLs with HTTPS are SSL. Enable it, Uses RSA.

  35. Consumer Chips Corporation • We want to implement for the cheapest price? Specially compared to reported $100 millions spent by Barnes and Noble book store • Three Option • Buy a ready made Solution that matches your specifications- templates and business rules. If it doesn’t match be careful! Because a solution that’s force-fit right now will be obsolete soon. • InterShop 3.0, iCats Pro, and Net.commerce • Rent space in a Network based ecommerce solution - instant store front can be built. • Intershop epages, iCat Commerce online, and Yahoo stores • Build the system to your specifications - Will give you an exact solution, but requires expertise, You can have your store identity , uniqueness in a competitive marketplace. • HTML, PERL/C++ • ASP • Cold Fusion;

  36. Consumer Chips Corporation

  37. That’s all folks!! Questions? Comments?

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