E-Commerce, E-Business, E-Life
E-Commerce Frameworks
Prof. Sheizaf Rafaeli
E-Commerce Frameworks
Prof. Sheizaf Rafaeli
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E-Commerce
E-Commerce Frameworks
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Optimism?
E-Commerce Frameworks
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E-Commerce Frameworks
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E-Commerce Frameworks
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E-Commerce Frameworks
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E-Commerce Frameworks
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Becoming Less American?
E-Commerce Frameworks
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More central to IT?
E-Commerce Frameworks
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Will this VC trend continue?
E-Commerce Frameworks
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E-Commerce Frameworks
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E-Commerce Frameworks
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Gartner’s “Hype Curve”
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E-Commerce Frameworks
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E-Commerce Frameworks
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E-Commerce Frameworks
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E-Commerce
Customers
Business
Marketing
Buying/Selling
Fulfillment
Service
E-Commerce Frameworks
Prof. Sheizaf Rafaeli
Suppliers
E-Commerce Frameworks
Source: On the Road of Electronic Commerce -a Business Value Framework, Gaining Competitive Advantage and Some Research Issues, Michael Bloch *, Yves Pigneur ** & Arie Segev,
http://www.stern.nyu.edu/%7Embloch/docs/roadtoec/ec.htm#bib3
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E-Commerce Frameworks
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Prof. Sheizaf Rafaeli http://www.businessweek.com/1998/25/b3583001.htm
E-Commerce
E-Commerce Frameworks
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E-Commerce
“Low
Touch”
E-Commerce Frameworks
Prof. Sheizaf Rafaeli
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E-Commerce
“Disintermediation”
E-Commerce Frameworks
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E-Commerce
E-Commerce Frameworks
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E-Commerce
E-Commerce Frameworks
Prof. Sheizaf Rafaeli
E-Commerce
Frameworks
• What is Telecomm? chronological development of
technology
• Client/Server Computing
• Packet Switching
• What is E-Commerce: Three definitions
• Some Rules:
Moore
Metcalfe
Coase
Disruption
• Why Electronic Commerce?
The Paradigm Shift, take #1
E-Commerce Frameworks
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What is Telecommunications?
Transmitted
Signal
Output
Signal
Input
Information Input
Signal
Received
Signal
Source System
Agent
Input
Device
Output
Information
Transmitter
Destination System
Communications
Channel
E-Commerce Frameworks
Prof. Sheizaf Rafaeli
Receiver
Output
Device
Agent
27
What is Telecommunications?
Transmitted
Signal
Output
Signal
Input
Information Input
Signal
Received
Signal
Source System
Agent
Input
Device
Output
Information
Transmitter
Destination System
Communications
Channel
E-Commerce Frameworks
Prof. Sheizaf Rafaeli
Receiver
Output
Device
Agent
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Types of Connections
Global
Internet
ISP
PSTN
Channel
Dialup
Terminal or
SLIP/PPP
Modem
9.6-28.8 Kbps
Global
Internet
ISP
ISDN
Channel
ISDN
Router
Customer
Enterprise
Network
Integrated Services
Digital Network
(ISDN)
64 Kbps
Global
Internet
ISP
AND ON… TOWARD …GLOBAL,
Leased
Customer CABLE Leased Lines
SATELLITE,
Circuit
Router
Enterprise
T1 or T3
56 Kpbs
BROADBAND,Network
MOBILE, WAP and
1.544 (T1)
BLUETOOTH
E-Commerce Frameworks
Prof. Sheizaf Rafaeli
Chronological development
• Standalone Mainframe
• Timesharing, Multiprogramming: Dumb
terminal
• Invention of Minicomputer, then Personal
Computer: Decentralization, then
Distributed Computing
• Emergence of Client / Server model
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ISP as mediator?
E-Commerce Frameworks
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CLIENT / SERVER MODEL
SPLITS PROCESSING
• CLIENT
• SERVER
*
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Client Server
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TYPES OF CLIENT/SERVER
COMPUTING
•
•
•
•
•
Distributed Presentation
Remote Presentation
Distributed Logic
Remote Data Management
Distributed Database
*
•CGI
•Javascript
•Java
•Jini
•Shockwave
•Realaudio
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‫מיתוג נתיבים לעומת מיתוג מנות‬
Circuit vs. Packet Switching
• CIRCUIT
• PACKET
• Continuous
• Intermittent
Transmission:
Transmission
• stream
• bursty
• dedicated circuit
• no center
• role and power of the
• store and forward
switch
Traceroute (tracert)
Ping
other network management tools
E-Commerce Frameworks
Prof. Sheizaf Rafaeli
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Packets :
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Packets
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IP
Traceroute
tracert
traceroute.org
E-Commerce Frameworks
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What is Electronic Commerce?
First Definition: (Transaction-Orientation)
Ability to perform business transactions on a variety
of networks--Internet, cable TV, wireless, Telcos.
Seller:
- Digital Data
&Documents
- Multimedia
Content
- Programs
- Collateral
Information
Information Flow
Consumer:
Online
Transactions
- Digital
Products
- Services
- Information
Payment Flow
E-Commerce Frameworks
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What is Electronic Commerce?
Second Definition: (Business to Business Transaction-Orientation)
Organization:
- Purchase Orders
- Inventory Info.
- Production
Schedules
- Product Info.
- Collateral
Information
Information Flow
Online
Transactions
Settlement
E-Commerce Frameworks
Prof. Sheizaf Rafaeli
Organization:
-
Purchase Orders
Inventory Info.
Production Schedules
Product Info.
Collateral Information
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What is Electronic Commerce?
Third Definition: (Production-Orientation)
The online process of converting digital
inputs into value-added outputs
Producers:
- Digital Data
&Documents
- Multimedia
Content
- Collateral
Information
- Customer
Participation
Online
Production
Process
Consumers:
- Digital
Products
- Services
- Processed order
Intermediaries
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Definition of Electronic Commerce
Electronic Commerce is any “interaction” between
an enterprise and a consumer or business partner,
that is processed or facilitated electronically,
regardless if it is by voice, IVR, fax or online (data).
Customers
Business
Suppliers
Marketing
Buying/Selling
Fulfillment
Service
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Three Faces of EC
Internet, Intranet and Extranet
Productivity enhancement
Productivity enhancement
•
•
•
•
•
•
•
•
•
Internal E-mail
Order processing
Enterprise communications
Employee Handbooks
Workflow Automation
Procurement (POs)
Pricing Info.
Marketing documents
Product Manuals
•
•
•
•
Product/company Info
External e-mail
Place order
Research
Order Tracking Suppliers
Order Fulfilment
Customer Support
Transactions
•
•
•
•
E-Commerce Frameworks
Prof. Sheizaf Rafaeli
Advertising
Outbound marketing
Revenue
Catalogs
Enhancers
Order Placement
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Some Rules
• “Rules” seem to be the rule, lately:
Kelly, Varian, others:
• Information Rules : A Strategic Guide to
the Network Economy
by Carl Shapiro, Hal R. Varian
• New Rules for the New Economy : 10
Radical Strategies for a Connected World
by Kevin Kelly
E-Commerce Frameworks
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Killer Apps Rules
• Unleashing the Killer App : Digital
Strategies for Market Dominance
by Larry Downes, Chunka Mui, Nicholas
Negroponte
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Moore’s Law
Every eighteen months, processing power doubles
while cost holds constant
E-Commerce Frameworks
E-Commerce, S. Rafaeli
Prof. Sheizaf Rafaeli
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Moore’s Law (2)
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Moore’s Law (2)
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Moore’s Law
• Gordon Moore, founder of Intel
• Every eighteen months, processing
power doubles while cost holds
constant.
• Every eighteen months, you can get twice as
much power for the same price, or the same
power for half the cost
• Imagine Henry Ford predicting that the internal combustion
engine would double its power every year and a half without
becoming any more expensive. By now we'd be driving cars that
could take us to the moon for lunch. The engines in these
vehicles would be given away with the purchase of a Big Mac.
E-Commerce Frameworks
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Metcalfe’s Law
The utility (usefulness) of a network equals the square
of the number of users
utility
users
E-Commerce Frameworks
E-Commerce, S. Rafaeli
Prof. Sheizaf Rafaeli
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Metcalfe’s Law
• Founder of 3Com Corporation, Inventor of Ethernet, Loser in
famous bet
• The utility of a network equals the
square of the number of users
• The more people your network the more valuable it
becomes
• More new users increase both utility and speed of
adoption
• If you and I can call only each other, to return to the
telephone example, a phone is of little value. But if we
can call nearly everyone else in the world, it becomes
irresistible.
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E-Commerce
Coase’s Law
Where do firms come from?
What sets their size? Transaction costs, friction
Firm size is a function of the cost of external transactions, ie. a
reverse function of the amount of friction
E-Commerce Frameworks
E-Commerce, S. Rafaeli
Prof. Sheizaf Rafaeli
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Coase’s Law
• Why do business executives now see
technology as their main competitor instead of
their chief weapon?
• Firms are created because the additional cost
of organizing and maintaining them is cheaper
than the transaction costs involved when
individuals conduct business with each other
using the market.
• As transaction costs in the open market
approach zero, so does the size of the firm.
E-Commerce Frameworks
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“The Law of Disruption”, or:
Negroponte’s maxim
• Bits replacing Atoms. Becoming Digital.
• Social, political, and economic systems
change incrementally, but technology
changes exponentially.
• Technological Determinism?
Second order effects
• A combination of Metcalfe and Moore’s laws
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E-Commerce
Negroponte’s Laws
Being digital From Atoms to Bits
The Law of Disruption
Negroponte’s Switch
E-Commerce Frameworks
E-Commerce, S. Rafaeli
Prof. Sheizaf Rafaeli
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Why Electronic Commerce?
Why companies do E-commerce:
– more revenues
– lower operating costs
– lower capital costs (e.g., branch reduction in banking)
Why consumers do e-commerce:
– lower prices for existing products
– more convenience via new products
– better service through self-service
Don’t think Zero-Sum. Think Win-Win or Complements
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Why are Firms Interested in Electronic
Commerce?
Focus on Revenue:
Profit = Revenue - Costs
• create new markets for existing off-line products
• Create new applications for existing markets
• create new products for the online environment
• Improve the quality of existing products (e.g., use
customer service to attract, serve, and keep customers)
The Web and External Internet are the focus here 57
E-Commerce Frameworks
Prof. Sheizaf Rafaeli
Business Need: Coordinate Business Processes or
Workflows
Operations
Electronic Data
Interchange
(Procurement)
Finanacial
Management
Team-based
Enterprises
Intranet Enabled
Process Coordination
Marketing
&
Sales
Outsourcing
Corporate
Communications
E-Commerce Frameworks
Prof. Sheizaf Rafaeli
Customer
Service & Support
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The Paradigm Shift:
Reduce Cost, Improve Service in Order Management
CURRENT
(Company-Defined Access)
800
 Mail

COMPLETE
THE CALL
Information
Database
Customer Sales and
Service History
Database
EMERGING
(Customer-Defined Access)
COMPLETE THE
TRANSACTION
800
 Mail

The Web/Online
Services
Fax
 On-line

Inventory
Systems
Order
Processing
E-Commerce Frameworks
Prof. Sheizaf Rafaeli
Delivery
Systems
59
The Paradigm Shift:
Reduce Time-to-Market in Supply Chain Management
CURRENT
Customer
NEAR TERM
Customer
EMERGING
ENTERPRISE
FOCUS
800
Retailer
Manufacturer
Supplier
Collaborative
Systems
800
Fax
On-line
Retailer
Shared
Market Data
Manufacturer
PARTNER
FOCUS
Supplier
CUSTOMER
FOCUS
Virtual
Shelf
The Web
Customer
Manufacturer
E-Commerce Frameworks
Prof. Sheizaf Rafaeli
Supplier
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Summary
•
•
•
•
•
The Telecomm Convergence
Client/Server Computing
Packet Switching
Definitions of E-Commerce
Some Rules:
Moore
Metcalfe
Coase
Negroponte, Disruption
• Why Electronic Commerce?
The Paradigm Shifts
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• Journal of Computer-Mediated
Communication (JCMC)
http://www.ascusc.org/jcmc
• Syllabus and references:
http://www.umich.edu/~cisdept/mba/CIS74
5
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Productivity Paradox?
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Productivity 2
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Digital Divide
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Legislation?
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Pricing (regulatory) barriers to
entry
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Internationally
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