Comp1503
E-Business/E-Commerce
History and Trends
Daniel L. Silver, Ph.D.
Theme
“To thrive in the e-commerce world,
companies need to structurally transform
their internal foundations to be effective.
They need to integrate their creaky
applications into a potent e-business
infrastructure.”
from the E-Business: Roadmap for Success by
Dr. Ravi Kalakota
2001
Daniel L. Silver
2
Outline
History of E-Commerce/E-Business
 Effects of E-Commerce/E-Business
 Trends effecting E-Commerce/E-Business
 The Rules of E-Business
 Constructing the E-Business Architecture

2001
Daniel L. Silver
3
History of E-Commerce
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ARPAnet created in 1969 (evolved to TCP/IP)
Personal computers exploded in 1981
– Processing power increases, cost decreases
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LANs and WANs became requirements in 1980s
The Internet was of significant size by mid 1980s
WWW started in 1990 with HTTP and HTML
General browser technology created in 1993 (used
HTTP, ftp, gopher, and .gif and .jpg images)
Search engines soon followed (AltaVista, Lycos)
2001
Daniel L. Silver
4
History of Internet Growth
B.C.
Novelty
Utility
Ubiquity
Users,sites,
traffic,revenue
1992 1993 1994 1995 1996 1997 1998 1999 2000
Experimental
Build-out
Mainstream awareness
Real applications
Useful, safe, fun
Transparent
Omnipresence
Reid, 1997
History of E-Commerce
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Businesses transformed Internet technologies into
intranets, extranets to solve integration problems
Object Oriented Programming (Java) and the Web provide
new client-server paradigm
Audio (.wav), video (.mpg), animation (Flash) standards
Broadcast and Push technologies, e.g. PointCast
Portals, intelligent web agents, personalization
General telecom (audio, video) over IP
Wireless Internet access (cell phones and PDAs) …
pervasive computing
2001
Daniel L. Silver
6
Key Technologies Enabling
E-Commerce Evolution
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Decreasing cost of increasingly more powerful
hardware – GHz processors, Mb nets,GB drives
Integration of voice, data, image, video data
Distributed database methods
Graphical user interfaces (GUI)
Communications (TCP/IP, HTTP) protocols and
content/ publication (HTML, XML) standards
Object oriented methods (Java, J2EE, ORB)
Lightweight electronics for mobile IT (Palm, RIM,
Pocket PC)
2001
Daniel L. Silver
7
Business Evolution on Web
Processes
Functionality
Transactions
Web-enabled
applicatons
Interactivity
Dynamic web pages
Publishing
Static web pages
Time or Maturity
2001
Daniel L. Silver
8
Effects of E-Commerce
Spam
 Bandwidth load shift
 Work load time shift
 Work place shift
 Play time shift
 Growth of on-line “virtual communities”
 Privacy challenges / new privacy products
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2001
Daniel L. Silver
9
Effects of E-Commerce
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Liberalization of pornography
Promises of wealth creation beyond your wildest
dreams … seemed unbelievable … well it was!!
Reducing TV consumption?
Dynamic and free content
Uncharted legal issues
Reinforcing media / converging media
Access to commodities such as prescription drugs
without normal levels of control
2001
Daniel L. Silver
10
Effects of E-commerce
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Credit card fraud
Tax avoidance
Many new copyright issues
Free access to information
– How to save a life (CPR, FirstAid, choking)
– How to build a bomb, or counterfeiting instructions
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Accuracy of information sources in question
Hacking and computer viruses
Shifting barriers of competition
Disintermediation and reintermediation
2001
Daniel L. Silver
11
Where has E-Commerce Had the
Greatest Impacts?
Postal service
 Real estate
 Communications
 Radio / TV
 Finance (banks)
 Entertainment
 Travel agents
 Stock brokers

2001
Daniel L. Silver
What do all these
Businesses have
in common?
Information = $
Time = $
Client self-service
is acceptable
12
Pre- dot.com Crash
8 Rules of E-Business
1.
2.
3.
4.
2001
Technology is the cause and driver, it is no
longer an after thought
Information collection, integration and
timely dissemination is the business
Outdated business processes must go or
your business will die
Create flexible outsourcing that excites
customers
Daniel L. Silver
13
Pre- dot.com Crash
8 Rules of E-Business
5.
6.
7.
8.
2001
E-Commerce means: “the cheapest”, “the
most familiar” or “the best”
Enhance the entire experience around the
product (selection, order, receipt, service)
Promote reconfigurable business models
to meet customer needs
The tough task: Align business strategies
and processes fast, right, and all at once
Daniel L. Silver
14
Before the dot.com Crash
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1995-2000 $125B in financial capital sunk into the
new dot.com companies from venture capitalists
and later mutual fund holders
The vision was an easily accessible world-wide
market that was self-regulated
The extraordinary profits would go to first movers
– the new intermediaries
The first E-Commerce period was driven by goldrush fever
Few real objectives, few business plans, few
winners
2001
Daniel L. Silver
15
Reasons for the dot.com Crash
Corporate America was rebuilding their
internal business systems in 1999-2000,
when this completed – Crash!
 Huge competition in the telecomm. Industry
caused revenue to – Crash!
 Xmas 1999 showed that E-Comm shopping
was not really that popular – Crash!
 Re-valuations of IT companies (dot.coms) –
Crash!
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2001
Daniel L. Silver
16
Lesson from the dot.com Crash
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From technology perspective – “E-” !
– Ramp-up from 1000’s to 1000000’s of users
– A solid technological base (DC,DP,DB)
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From business perspective – “-Commerce”?
– Only ~ 10% of dot.coms survived
» Remember eToys.com, Furniture.com
– Yet B2C sales growing at ~50% per year
– Users have learned to use the web for
information about products andservices
2001
Daniel L. Silver
17
Trends effecting
E-Commerce/E-Business
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Consumer Trends
– Speed of Service, Self-Service (empowerment)
– Integrated solutions, not piecemeal products
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Service/Process Trends
– Convergence of sales and service
– Long-term Customer Relationship Management
– Flexible fulfillment and service delivery
2001
Daniel L. Silver
18
Trends effecting
E-Commerce/E-Business
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Organizational Trends
–
–
–
–
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Brand not capital: contract JIT manufacturing
Retain the core, outsource the rest
Increase process visibility (to customers, suppliers)
Employee retention, cont. learning/innovation
Technology Use Trends
– Enterprise wide applications, use middleware for
integration
– Integrate voice, data, video comm. channels
– Handheld and wireless – an explosion !
2001
Daniel L. Silver
19
Five Major Predictions for the
E-Commerce Future
1.
2.
3.
4.
5.
2001
E-Commerce technology take-up will continue to
grow by ~50% until about ~2006
E-Commerce prices will rise to cover real costs
of doing business on the web
E-Commerce profits will rise to meet levels of
bricks and mortar stores
Major players will become the experienced
Fortune 500 companies who have been watching
(eg. WalMart, Sears, JC Penny, the Gap)
The number of successful dot.coms will further
reduce and adopt “clicks and bricks “ strategies
Daniel L. Silver
20
Constructing the E-Business
Architecture
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The New Era of Cross-Functional
Integrated Applications
Middleware
Procurement
Management
Supply
Chain
Management
Enterprise
Resource Knowledge
Planning Management
Selling
Customer
Chain
Relationship
Management
Management
2001
Daniel L. Silver
21
Constructing the E-Business
Architecture
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The New Era of Cross-Functional Integrated
Applications
–
–
–
–
–
CRM = Customer Relationship Management
ERP = Enterprise Resource Planning
SupCM = Supply Chain Management
SellCM = Selling Chain Management
PM = Procurement (Operational Resource)
Management
– Middleware = Integration Applications
– KM = Knowledge Management (DW/Analytics)
2001
Daniel L. Silver
22
Constructing the E-Business
Architecture

CRM = Customer Relationship
Management
– Marketing, Sales, Service
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ERP = Enterprise Resource Planning
–
–
–
–
–
2001
Forecasting and Planning
Purchasing and Material Management
Inventory Management
Finished Porduct distribution
Accounting and Finance
Daniel L. Silver
23
Constructing the E-Business
Architecture

SupCM = Supply Chain Management
– Market demand
– Resource and capacity constraints
– Real-time scheduling
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SellCM = Selling Chain Management
–
–
–
–
2001
Product Customization
Pricing, Contract and Commission Management
Quote and Proposal Generation
Promotions Management
Daniel L. Silver
24
Constructing the E-Business
Architecture

PM = Procurement Management
– Office Supplies, Business Travel, Entertainment,
Service contracting, IT h/w, s/w and networking
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KM = Knowledge Management (DW/Analytics)
– Data Warehousing
– Business Analytics (data mining)
– Executive Info Systems, Decision Support Systems
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Middleware = Integration Applications
– e.g. SAP (ERP) to SAS (KM)
2001
Daniel L. Silver
25
The E-Business Architecture
Partners, Suppliers
PM
SupCM
Employees
KM
ERP
Stakeholders
Middleware
SellCM
CRM
Customers, Distributors
2001
Daniel L. Silver
26
Question …

In Groups of 2 or 3 answer the following:
What do you predict to be the most significant
new trend (paradigm) in E-Business /
E-Commerce?
Who will be affected the most by this trend?
2001
Daniel L. Silver
27
THE END
danny.silver@acadiau.ca