ELC 200 Introduction to E-Commerce Copyright, Tony Gauvin, UMFK, 2004.

ELC 200

Introduction to E-Commerce

Copyright, Tony Gauvin, UMFK, 2004

WWWWWW Awad –Electronic Commerce 2/e© 2004 Pearson Prentice Hall

Introduction

• Class roll call• Instructor Introduction• Instructor’s Educational Philosophy• Syllabus review• General Information about class• WebCT accounts• Some Group Work• Intro to eCommerce


Instructor

• Tony Gauvin– Assistant Professor of E-Commerce– 216 Nadeau Hall– (207) 834-7519 or Extension 7519– [email protected]– WebCT


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.


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


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 e-commerce initiative

• Managerial Perspectives instead of technical– Technical Portions will be covered in COS XXX classes– Understanding “Why” instead of “How”


Group Work

• Define E-Commerce– Don’t use the book!

• Identify 3 Technical Drivers of E-Commerce

• Identify 3 benefits of E-Commerce

• Identify 3 detractors of E-Commerce

• Identify an E-Commerce Success

• Identify an E-Commerce DUD


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


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


Management Capabilities

• Financial

• Ethical

• Marketing

• Human Resources

• Leadership

• Project planning and management

• Operations management


Technical Skills

• Programming– Procedural & Scripting

– Object Oriented

– Markup Languages

• System analysis– Needs assessment

– System design and Specification

– Project Management

• Networks– Design

– Administration

– Security

• Databases– Design

– Transaction programming

– Administration

ELC 200

DAY 2


Agenda

• Questions?

• Finish up on Introduction to eCommerce

• Assignment 1

In the Beginning

Chapter 1

WWWWWW


OBJECTIVES

• What is E-Commerce?

• Advantages and Limitations of E-Commerce

• Strategy in E-Commerce

• Value Chains in E-Commerce

• E-Commerce Integration


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.


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


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


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 in 2000


E-COMMERCE MYTHS (Cont’d)• B2C eCommerce is dead

– http://retailindustry.about.com/od/seg_internet/a/bl_nrf052504.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• The middleman is out


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.”


An eCommerce Timeline

SOURCE: the Gartner Group

High Visibility


ADVANTAGES OF E-COMMERCE

• Lower Transactional Costs

• Economical

• Higher Margins

• Better and Quicker Customer Service

• Comparison Shopping

• Productivity Gains


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


LIMITATIONS OF E-COMMERCE

• Security

• System and Data Integrity

• System Scalability

• Not Free-for-All

• Consumer Search


LIMITATIONS OF E-COMMERCE (Cont’d)

• Fulfillment

• Customer Relations

• Types of Products

• Corporate Vulnerability

• Blueprint Development

• Risk


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


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


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.


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


PRIMARY ACTIVITIES (Cont’d)

• Marketing and Sales– Deals with ultimate customer

• Service– After-sale service to customer


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


VALUE CHAIN IN E-COMMERCE

Image from http://www.cscresearchservices.com/foundation/library/value/RP01.asp


E-COMMERCE INTEGRATION

Element INTERNET EXTRANET INTRANET

E-Commerce Type

Business-to-Consumer

Business-to-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


The Growth in B2BINDUSTRY 2000 2001 2002 2003 2004 % of

Total

Computing & Electronics $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%

TOTAL 406.2 716.6 1,166.9 1,823.4 2,695.5 17%

Source: Forrester Research, Reported in Blackmon, Douglas, “Where the Money Is,” WSJ, April 17, 2000, p. R30.


SUPPLY CHAIN MANAGEMENT

• Reduces Cycle Times

• Raise Order Fulfillment

• Minimize Excess Inventory

• Improve Customer Service

• An advanced SCM systems is Lean Manufacturing– http://www.legsource.com/lean_manuf/lean_manufacturing_overview.ht

m


INTRANET

• Low Development and Maintenance Costs

• Friendly Environment

• High Information Availability and Shareability

• Timely Information

• Easy Dissemination of Information


Other eCommerce types

• Business-to-Government B2G– Procurement GSA office

• http://www.gsa.gov/Portal/gsa/ep/home.do?tabId=0

– OMB contract• http://www.whitehouse.gov/omb/egov/

– IRS• http://www.irs.gov/

• Mobile Commerce– Wireless technologies– More in chap 7


Managerial Implications

• Given the challenges posed by today’s eCommerce and its potential, when it comes to success in this emerging field, it is people and managerial talent that matter. It is people with a vision of the future who know how to handle the speed of change. The person who figures out how to harness the collective genius of the organization will blow the competition away.


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. (1-12)– Turn in a well formatted typed response sheet

• Not more than 3 pages!

– Due Tuesday January 18 at start of class

ELC 200 Introduction to E-Commerce Copyright, Tony Gauvin, UMFK, 2004.

Documents

Transcript of ELC 200 Introduction to E-Commerce Copyright, Tony Gauvin, UMFK, 2004.