MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
Definitions
 eBusiness
The use of computer based information systems
for the management and coordination of
business processes.
 eCommerce
eCommerce is the process of buying and selling
goods and services electronically using
computer based information systems and
networks.
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
The Role & Development of EC
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
The Role & Development of EC
History
 1970's EFT
 EDI
 Dial up access
 1990's - www
 Growth of networking
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
Pure versus partial EC
Virtual Product
Electronic Commerce Areas
Pure EC
Virtual Process
Digital
Product
Digital Process
Physical
Product
Traditional
Commerce
Physical Process
Virtual Player
Physical
Agent
Digital
Agent
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
Perspectives
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communications
business process
service
online
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
Dimensions
Task
Technology
People
Structure
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
Classification by Transaction
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B2B
B2C
C2C
C2B
Nonbusiness EC
Intrabusiness EC
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
Classification by process
 electronic markets
 interorganisational systems
 customer service
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
Interorganisational systems
 Includes customers and\or suppliers
 Moving from proprietary communications links to
the Internet
 Types
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EDI
Extranets
Electronics Funds Transfer
Electronic forms
Integrated messaging
shared databases
supply chain management
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
Interdisciplinary Nature
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Marketing
Computer Science
Consumer behaviour and psychology
Finance
Economics
Management Information Systems
Accounting and Auditing
Management
Business law and ethics
Other
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
User Profile
Home
User Logs
On
Home
Page
Catalogue
Legacy Systems
Purchase
Order
Order &
Information
Transaction
Processing
Legacy Integration
Payment
Options
Bank
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
Future of EC
 eCommerce revenues in the Asian-Pacific
region will rise from US$76.8 billion at year-end
2001 to an exponential $338.5 billion by the end
of 2004 (eMarketer)
 Over $40 billion per annum in USA in 2002 28% growth per annum (US Govt)
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
Growth in US eCommerce
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
Benefits & Limitations
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
Benefits to Organisations
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Expands marketplace
Decreases cost of handling paper
Create specialised businesses (niche markets)
reduced inventories through “pull” supply chain
management
competitive advantage through new systems
reduces time between outlay of capital and receipt of
product (reduced cycle time)
lowers telecommunications costs
improved customer service
research
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
Benefits to Consumers
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24/7 shopping
more choices
conduct quick comparisons
quick delivery (especially digital products)
detailed information
virtual auctions
increases competition (global market)
interaction with other customers
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
Benefits to society
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work at home
lower prices
makes services and goods available to people
in remote areas
delivery of public services
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
Limitations of EC
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security
authentication
lack of trust & user resistance
privacy
integration with existing applications and
systems
incompatible software\hardware (lack of
standards)
bandwidth
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
Limitations of EC (Cont.)
 high development costs and low ROI (what is
the value of intangibles)
 legal issues
 support services (especially transport)
 lack of critical mass of buyers & sellers
 breakdown of human relationships
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
Technology
Society
Market
Organisation
Information
Technology
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
Driving forces for EC
A New world Order of Business?
 Highly competitive environment
 consumers are the focus
 Business environment can change quickly
 Business environment can change unpredictably
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
Driving forces for EC (Cont.)
Market & Economic pressures
 strong competition
 global economy
 regional trade agreements
 low labour costs in third world countries
 frequent & significant changes in markets
 increased power of consumers
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
Driving forces for EC (Cont.)
Societal & Environmental pressures
 changing nature of the workforce
 government deregulation
 shrinking government subsidies
 increased importance of ethical and legal
issues
 increased social responsibility of organisations
 rapid political changes
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
Driving forces for EC (Cont.)
Technological pressures
 Increased innovation
 information overload
 rapid decline in technology costs v s
performance ratio
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
Economic and Global Issues in EC
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
The Marketspace
 Match Buyers and Sellers
 Determination of Product Offerings
 Search of Buyers for Sellers and Vice a Versa
 Price Discovery
 Intermediaries
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
The Marketspace (Cont.)
 Facilitate Transactions
 Logistics
 Settlement
 Trust
 Provide Institutional Infrastructure
 Legal
 Regulatory
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
IT Increases Market Efficiencies by
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Expediting Or Improving Market Functions
Lowering Buyers’ Search Cost
Enabling Speedy Comparisons
Lowering Prices
Reducing geographical constraints
Lowering barriers to entry (especially small
firms)
Increasing information to parties
Allowing greater product differentiation
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
Transaction Cost
 Reducing transactions costs
Firm Size (Employees)
MANAGEMENT & LEGAL IMPLICATIONS OF eCOMMERCE
Agency Costs
 Reducing Agency Costs
Firm Size (Employees)