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  • Strategic alliances enable businesses to gain competitive advantage(s) through access to partner(s) resources, including markets, technologies, capital, and people Teaming up with another business adds complementary resources and capabilities, enabling participants to grow and expand more quickly and efficiently - especially fast growing companies who rely heavily on outsourcing many areas of their business to extend their technical and operational resources
  • Note to instructors: I generally also point out that standards represent a trade off. They allow users easy access and generally stimulate markets to grow – which may generally benefit suppliers; however, suppliers can charge much more for non-standard technologies when they offer enough special benefit that customers will pay more. If a company has invested early in a new technology, it may profit greatly if their approach becomes the standard (or is near the new standard), but may suffer greatly if the standard is far from what they were developing.
  • Note to instructors: I generally also point out that standards represent a trade off. They allow users easy access and generally stimulate markets to grow – which may generally benefit suppliers; however, suppliers can charge much more for non-standard technologies when they offer enough special benefit that customers will pay more. If a company has invested early in a new technology, it may profit greatly if their approach becomes the standard (or is near the new standard), but may suffer greatly if the standard is far from what they were developing.
  • Note to instructors: I generally also point out that standards represent a trade off. They allow users easy access and generally stimulate markets to grow – which may generally benefit suppliers; however, suppliers can charge much more for non-standard technologies when they offer enough special benefit that customers will pay more. If a company has invested early in a new technology, it may profit greatly if their approach becomes the standard (or is near the new standard), but may suffer greatly if the standard is far from what they were developing.

E-business.ppt E-business.ppt Presentation Transcript

  • Electronic Business ISM3011
  • What We’re Going to do Today
    • Announcements
    • Q&A
    • Electronic business
    • Alphabet soup
    • MIS in the professions
  • Alphabet Soup
    • ASP
      • Application service provider
        • Manages and distributes software applications to users over a WAN (such as the Internet). Software runs on the ASP’s servers, not the customers.
    • DSL
      • Digital subscriber line
        • Telecommunications network technology that uses existing twisted-pair cables (the telephone wiring in most homes) for high-speed connections, typically to the Internet
        • “Last-mile” technology
  • MIS in the Professions –Operations Management
    • Grand Hyatt
      • Uses a purchasing/inventory management control software called Adaco.
      • Designed to assist businesses in the hospitality industry manage products that with high obsolescence as well as durable goods.
      • Streamlines information about purchases, inventory data, and COGS.
        • “ The Adaco System provides us with powerful purchasing functionality for 100% of the hotel requirements. The reporting capabilities allow us to track purchase orders, departmental costs and inventory turnover. Adaco is easy to use and is one of the major reasons for improved productivity and customer services in our hotel. Adaco helped us grow as a business, realized improved profitability, efficiency and strategic direction by connecting project activities to company financials.” — Christina Donath , Profit Improvement Manager Grand Hyatt Washington Washington Center, Washington, DC
      • http://www.adacoservices.com/company/stories.php
  • Electronic Business
  • E-commerce vs. E-business
    • E- commerce – the buying and selling of goods and services over the Internet
    • E- business – the conducting of business on the Internet, not only buying and selling, but also serving customers and collaborating with business partners
    Most people use these terms interchangeably, which is usually OK
  • Why Now?
    • Why is e-business emerging now?
      • Take “now” in a broad sense
    • Two potential reasons
      • Convergence
      • Critical mass
    • The two are not independent
    • What is convergence?
      • Coming together of various technologies
    • Technologies that have converged to enable e-business
      • Digital content
      • Network access devices
      • PC speed and storage
      • Graphical user interface
      • Network transmission
      • Data compression (MP3)
    Convergence
    • The value of the technology increases with the addition of each new person using it.
    • When a technology hits “critical mass” it may pull other technologies along with it.
    Critical Mass
  • Interoperability
    • The ability of systems running in different operating environments to communicate and work together.
    • This is a critical issue in e-business
    • Standards are one way to achieve interoperability
      • (Use of translation software called middleware is another)
  • Standards
    • When everyone on a network uses the same standards, they can interoperate
    • Protocols
      • E.g. TCP/IP
    • Languages
      • E.g. HTML
  • Categories of E-business
  • Business Models
    • How a company generates revenue
      • Architecture of the business – flow of goods/services
      • Description of benefits for entities involved
      • Sources of revenue
    • One of the biggest criticisms of “dot-coms” is the lack of viable business models
    • Without a solid business model, there’s little chance of survival
  • Business to Business
    • The largest category by far
    • Approaches
      • Exchanges
        • Catalogue aggregators ( Sciquest )
        • Auction model ( IndiaMart Auction )
        • Market exchange model ( Chemconnect )
        • Barter model ( uBarter )
      • Direct sales
  • Business to Consumer
    • Electronic stores ( Road Runner Sports )
      • Traditional catalogue translated to the web
    • Clicks and bricks (aka clicks and mortar) ( Target )
      • Different levels of integration of web and store activities
    • On-line auctions ( uBid )
    • Electronic mall ( ChoiceMall )
    • Promotion and customer service sites ( Hewlett Packard )
    • Content and advertising sites ( Motley Fool )
    • Subscription models ( Wall Street Journal )
    • Clubs and communities ( Dixie Chicks )
  • Consumer to Consumer
    • Auctions and classifieds
      • eBay is a good example of C2C
      • They have done a good job of overcoming barriers to C2C e-business.
    • Meetings and buddy lists, discussion groups
      • Where is the “business”???
  • Government to Constituent
    • Information regarding services
    • Permits and licenses
    • Portals and “welcome mat” to visitors
    • Examples
      • Seminole County
      • Orange County
      • New Zealand
    • Voting and governance
  • Impacts of E-business
    • Reduces cost of carrying out transactions
    • But, substitutes costs of building and maintaining the system
    • Can you point to examples of e-business increasing efficiency??
    Economic Efficiency
  • Network Effects
    • Email is more valuable if more people are using it
    • Growth can be explosive
    2 nodes, 1 connection 3 nodes 3 connections 4 nodes, 6 connections How many connections with: 5 nodes? 6 nodes? 7 nodes?
    • Extension of Electronic Data Interchange (EDI)
    • Supply chain management
      • Raw materials
      • Parts
      • Assembly, manufacturing, packaging
      • Distribution
      • Retail
      • Customer
    • How is this different for intangible goods?
    Operational Efficiency
    • Disintermediation
      • Cutting out some of the steps in the supply chain
      • There’s also “ reintermediation ” (new middlemen)
        • Payment processing; product delivery; trust providers; etc.
    • Lowering communication costs
      • May also lower inventories with “just in time” deliveries
    • Enterprise resource planning (ERP) systems
    Effects of Operational Efficiency
  • Disintermediation Are there dangers to cutting out these links?
    • Channel conflict
      • Retailers challenged by manufacturers
      • Examples
    • New markets
    • New products
    • New competition
    Other Organizational Impacts
    • Created “day trading”
    • Travel industry
    • Created MP3 enabled music players
      • What other impacts have e-business technologies had on the music industry?
    Changing Market Structure
  • Business Models
  • Categories of Business Models
    • Brokerage
      • Bring buyers and sellers together
      • Examples: eBay, Priceline
    • Advertising
      • Provides content and services, generates revenue through advertising that’s mixed with the content
      • Examples: Google, Yahoo!, Craigslist
    • Infomediary
      • Gathers/analyzes data regarding customers
      • Examples: DoubleClick, Nielsen/Netratings
  • Categories of Business Models cont’d
    • Merchant
      • Sell goods and services
      • Examples: Amazon, Buy.com, eMusic
    • Manufacturer (direct sales)
      • Manufacturer sells directly to end customer, rather than through a distributor or retailer
      • Examples: Dell, Gateway
    • Affiliate
      • Offers $$$ to partner site in exchange for driving traffic to the target site
      • Examples: Amazon, iTunes, many others
  • Categories of Business Models cont’d
    • Community
      • Builds a “community” of loyal users; revenue is generated by sales, donations, ads, subscriptions
      • Examples: My Space, FaceBook, Second Life
    • Subscription
      • Charge a periodic fee to gain access to a service
      • Examples: eMusic, Classmates, WSJ
    • Utility
      • “ Pay as you go” charges
        • Some ISPs, Slashdot
  • Next Time
    • Wireless
    • Emerging technologies