ELC 200 Introduction to E-Commerce Copyright, Tony Gauvin, UMFK, 2002 Introduction • • • • • • • • Class roll call Instructor Introduction Instructor’s Educational Philosophy Syllabus review General Information about class WebCT accounts Some Group Work Intro to eCommerce WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall Instructor • Tony Gauvin – – – – – Assistant Professor Of E-Commerce 216 Nadeau Hall (207) 834-7519 or Extension 7519 TonyG@maine.edu WebCT WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall Instructional Philosophy • Out-Come based education • Would rather discuss than lecture – Requires student preparation • Hate grading assignments – Especially LATE assignments • Use class interaction, assignments, quizzes and projects to determine if outcomes are met. WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall ELC 200 Survival Primer • Read Material BEFORE the class discussion – Summary & Key Terms at EOC – Review and Discussion Questions in EOC – Web Exercises • • • • • Check WebCT Often Use the additional resources identified in syllabus ASK questions about what you didn’t understand in readings DON’T do homework at last minute. REVEIW lectures and notes • Seek HELP if you are having difficulties • OFFER feedback and suggestions to the instructor in a constructive manner • Student Study Groups are STONGLY Encouraged WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall ELC 200 Specifics • WebCT used to augment course • Two Desired outcomes – The E-Commerce Life Cycle • Students will understand how a E-Commerce initiative is taken from vision to Fulfillment – Entrepreneurship • Students have the ability to create the framework for a viable ecommerce initiative • Managerial Perspectives instead of technical – Technical Portions will be covered in COS XXX classes – Understanding “Why” instead of “How” WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall Group Work • Define E-Commerce – Don’t use the book! • Identify 3 Technical Drivers of ECommerce • Identify 3 benefits of E-Commerce • Identify 3 detractors of E-Commerce • Identify an E-Commerce Success • Identify an E-Commerce DUD Awad –Electronic Commerce 2/e WWW © 2004 Pearson Prentice Hall UMFK’s Definition of E-Commerce • An attempt to achieve transactional efficiency in all aspects of the design, production, marketing and sales of products or services for existing and developing marketplaces through the utilization of current and emerging electronic technologies • E-Commerce IS NOT – – – – – E-Business DOT-COMS (or Dot-Bombs) E-Marketing Easy or Cheap NEW • There are other definitions..The text book’s author has another less inclusive definition WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall E-Commerce Degree Program • Combination of Technical Skills and Management know-how • Prepares students for Leadership Roles – Cadre (team) building – Broad-based technical underpinnings with one or two specialist areas – Understanding of implications of E-Commerce within an organizational context and within broader social issues Awad –Electronic Commerce 2/e WWW © 2004 Pearson Prentice Hall Management Capabilities • • • • • • • Financial Ethical Marketing Human Resources Leadership Project planning and management Operations management WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall Technical Skills • Programming – Procedural & Scripting – Object Oriented – Markup Languages • System analysis – Needs assessment – System design and Specification – Project Management WWW • Networks – Design – Administration – Security • Databases – Design – Transaction programming – Administration Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall Chapter 1 In the Beginning WWW OBJECTIVES • What is E-Commerce? • Advantages and Limitations of E-Commerce • Strategy in E-Commerce • Value Chains in E-Commerce • E-Commerce Integration WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall What is e-commerce? • Electronic Commerce (e-commerce) can be viewed from several perspectives. – From a communications perspective, e-commerce is the delivery of information, products and services, and payments through telephone lines, computer networks, etc. – From an interface perspective, e-commerce involves various information and transformation exchanges: B2B, B2C, C2C, B2G, G2C – From a business process perspective, e-commerce is the applications of technology toward the automation of business transactions and workflows. – From a service perspective, e-commerce is a tool that allows firms, consumers and management the ability to cut service costs, while improving the quality of goods and increasing the speed of delivery of service. – As a market, eCommerce is a world-wide network. A local store can open a web store front and find the world at its doorstep/ – From a online perspective, e-commerce provides the capability of buying and selling products and information on the Internet. – From a structural perspective, e-commerce involves various media: data, text, web pages, Internet telephony, and Internet Desktop video. WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall WHAT IS E-COMMERCE? • • • • • Electronic Presentation of Goods and Services Automated Customer Account Inquiries Online Order Taking and Payments Online Transaction Handling Automated Supply Chain Management Solutions WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall WHY E-COMMERCE? • • • • • Digital Convergence Anytime, Anywhere, Anyone Changes in Organization’s Make-up Widespread Access to IT Increasing Pressure on Operating Costs and Profit Margins • Demand for Customized Products and Services • Speed or Time Reduction WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall Agenda • Questions? • Finish up on introduction to eCommerce • Assignment 1 WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall E-COMMERCE MYTHS • Setting up a Web site is easy • E-commerce is cheap when compared to purchasing a mainframe • E-commerce means end of mass marketing • Everyone is doing it • E-commerce is lucrative • E-commerce is revolutionary • The Internet is a commercial fad that crashed Awad –Electronic Commerce 2/e WWW © 2004 Pearson Prentice Hall E-COMMERCE MYTHS (Cont’d) • B2C eCommerce is dead – http://retailindustry.about.com/library/holiday/03/blh_em100803.htm • Online retailing is always the low-cost channel • All products can be sold online using identical business models • Customers can be bought • Online firms face less pressure to grow and achieve economies of scale • Size is not important for online firms Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall • The middleman is out WWW Quote from text • “Ecommerce is everywhere. After boom and bust, it is not new or unique anymore. The advantage is that the focus now is on basic business principles such as return on investment, building trust, and telling the customer what is available in stock. Ecommerce has become just plain commerce. It is just another channel to reach customers, vendors and suppliers.” WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall ADVANTAGES OF E-COMMERCE • • • • • • Lower Transactional Costs Economical Higher Margins Better and Quicker Customer Service Comparison Shopping Productivity Gains WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall ADVANTAGES OF E-COMMERCE (Cont’d) • Helps People Work Together • Creates Knowledge Markets • Promotes Information Sharing, Convenience and New Customer Control • Swapping Goods and Services • Allows High Product Customization WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall LIMITATIONS OF E-COMMERCE • • • • • Security System and Data Integrity System Scalability Not Free-for-All Consumer Search WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall LIMITATIONS OF E-COMMERCE (Cont’d) • • • • • • Fulfillment Customer Relations Types of Products Corporate Vulnerability Blueprint Development Risk WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall STRATEGY IN E-COMMERCE • Critical Success Factors for E-Commerce – Sound Strategy that has the support of top management – Clear Aim (long-term) – Promotion of Sell Cycle – Full Technology Utilization – Scalable and Integrated Business Process WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall SELL CYCLE IN E-COMMERCE Selling Process Phase What You Want to Do Attraction Advertising, Promotions Conversion Ease of Use, Effective Presentation Service and Support Product Info/Status, Fulfillment Personalization Site Customization, Support Security Transaction, Authentication Infrastructure Scalability, Availability, Hosting WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall Value Chains • Defined by Michael Porter in his 1985 book “Competitive Advantage” • A way for organizing the activities of a business so that each activity adds value (value-added activity) or productivity to the total operations of the business. • Each activity is said to have a value proposition • Firms that have identified and optimized their value chains will have Competitive advantage over those that have not. WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall VALUE CHAIN IN E-COMMERCE Support Activities Corporate Infrastructure HR Management Technology Development Procurement Inbound Operations Outbound Marketing Service Logistics Logistics & Sales WWW Primary Activities Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall PRIMARY ACTIVITIES • Inbound Logistics – Supply line of business • Operations – Conversion of raw materials into finished products – Center of value chain where value-added occurs • Outbound Logistics – Storing, distribution and shipping of final product WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall PRIMARY ACTIVITIES (Cont’d) • Marketing and Sales – Deals with ultimate customer • Service – After-sale service to customer WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall SUPPORT ACTIVITIES • Corporate Infrastructure – Backbone of business unit • Human Resources – Matching the right people to the right job • Technology Development – Product and business processes improvement • Procurement – Prerequisite for production WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall E-COMMERCE INTEGRATION Element INTERNET EXTRANET INTRANET E-Commerce Business-to- Business-toType Consumer Business Business within Business Access Unrestricted Restricted Restricted Security Minimal Firewalls & Restricted Access Firewalls & Restricted Access Payment Method Credit Card Predefined Credit Agreement Within Business Charges WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall The Growth in B2B INDUSTRY Computing & Electronics 2000 2001 2002 2003 2004 % of Total $230.2 $343.3 $427.3 $506.2 $592.9 40% Motor Vehicles 35.1 90.0 190.2 311.5 411.5 26% Petrochemicals 27.0 53.9 103.2 184.5 299.2 17% Utilities 29.9 56.5 101.3 170.1 266.4 17% Paper & Office Products 14.4 33.7 73.9 143.5 235.3 24% Consumer Goods 13.2 28.1 58.5 116.5 216.5 13% Food 22.5 41.2 73.9 128.1 211.1 12% Construction 6.3 15.1 34.6 74.2 141.0 10% Pharmaceutical & Med Products 4.3 10.7 26.2 60.2 124.0 14% Industrial Equipment / Supplies 7.0 13.1 23.8 41.9 70.3 7% Shipping & Warehousing 4.6 10.5 22.4 42.5 68.1 20% Aerospace & Defense 9.1 15.8 23.1 29.0 32.9 15% Heavy Industry 2.6 4.8 8.6 15.3 26.5 3% 406.2 716.6 1,166.9 1,823.4 2,695.5 17% TOTAL WWW Source: Forrester Research, Reported in Blackmon, Douglas, “Where the Money Is,” WSJ, April 17, 2000, p. R30. Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall SUPPLY CHAIN MANAGEMENT • • • • Reduces Cycle Times Raise Order Fulfillment Minimize Excess Inventory Improve Customer Service WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall INTRANET • • • • • Low Development and Maintenance Costs Friendly Environment High Information Availability and Shareability Timely Information Easy Dissemination of Information WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall Other eCommerce types • Business-to-Government B2G – Procurement GSA office – OMB contract – IRS • Mobile Commerce – Wireless technologies WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall For next week • Read Chap Two – The Internet and the World Wide Web • Assignment 1 – Answer Test Your Understanding questions on Page 31 of the text. – Turn in a well formatted typed response sheet – Due Tuesday January 10 at start of class WWW Awad –Electronic Commerce 2/e © 2004 Pearson Prentice Hall