Management Information System 6

Amity School of Business

Module 6
Key System Applications For
The Digital Age

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Module 6
1. Enterprise Systems
2. E-Commerce: Digital Market & Digital
Goods
3. M-Commerce: Services &
Applications

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1. Enterprise Systems –
• Supply Chain Management
• Customer Relationship Management
Systems

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WHAT IS SUPPLY CHAIN MANAGEMENT
" Is the strategic management of activities involved in
the acquisition and conversion of materials to finished
products delivered to the customer"

Supplier Material Flow Customer
Management Management
Information Flow

Schedule / Stock
Conversion Delivery
Resources Deployment

Leads to Business Process Integration
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SUPPLY CHAIN MANAGEMENT
• Supply chain is the system by which
organizations source, make and deliver their
products or services according to market
demand.
• Supply chain management operations and
decisions are ultimately triggered by demand
signals at the ultimate consumer level.
• Supply chain as defined by experienced
practitioners extends from suppliers’ suppliers to
customers’ customers.

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Supply Chain Structure
SUPPLIER FACTORY DC RDC RETAILER

Raw Materials
Finished Goods

Information Flow

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SUPPLY CHAIN ELEMENTS
• SupplyChain Design
Strategic • Resource Acquisition
• Long TermP lanning (1 Year ++)

• P uction/Distribution P
rod lanning
Tactical • Resource Allocation
• MediumTermP lanning (Qtrly,Monthly)

• Shipm ent Scheduling
Operational • Resource Scheduling
• Short TermP lanning (Weekly,Daily)
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• SUPPLY CHAIN INCLUDES :

– MATERIAL FLOWS

– INFORMATION FLOWS

– FINANCIAL FLOWS

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Customer Relationship Management (CRM)

Term applied to processes implemented by a
company to handle its contact with its
customers.
Characteristics of CRM
• CRM is a software-based approach to handle customer
relationships.
• Store information on current and prospective customers.
• From the outside, customers interacting with a company perceive
the business as a single entity, despite often interacting with a
variety of employees in different roles and departments.
• CRM is a combination of policies, processes, and strategies
implemented by a company that unify its customer interaction and
provides mechanism for tracking customer information

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Why CRM?
More companies are beginning to
view customers as their primary
asset.

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Applications of CRM
• Information in the system can be accessed and entered by
employees in different departments:
Sales
Marketing
Customer service
Training
Professional development
Performance management
Human resource development
• Details on any customer contacts can also be stored in the system
 The rationale behind this approach is to improve services
provided directly to customers.
 To use the information in the system for targeted marketing and
sales purposes.

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Customer Requirements
• Control over buying process
– Information, comparison, selection, easy to find
• Best possible price
– Delivery (free), quality
• All payment options
– Secure
• Communication designed to suit needs
– Computerized, complex, caring

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Aspects of CRM

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Aspects of CRM
• Many inter-related aspects:

Aspect 1 : Front Office Aspect 2: Back Office
Operations that ultimately affect the activities of
Direct interaction with customers the front office
Face to face meetings Billing
Maintenance
Phone calls Planning
E-mail Marketing
Online services etc Advertising
Finance
Manufacturing

Aspect 4

Aspect 3: Business Relationships Aspect 4: Analysis
Interaction with other companies and partners Key CRM data can be analyzed in order to plan
Suppliers/vendors Target-marketing campaigns
Retail outlets/distributors Conceive business strategies
Industry networks (lobbying groups, trade assn’) Judge the success of CRM activities (e.g., market
This external network supports front and back share, number and types of customers, revenue,
office activities profitability)

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Limitations of CRM
CRM initiatives often fail
• Implementation was limited to software
installation.
• Inadequate motivations for employees to
learn, provide input, and take full
advantage of the information systems.

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2. E-Commerce:
– Digital Market
– Digital Goods

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E-Commerce
• The use of the Internet and the Web to transact business
– Digitally enabled commercial transactions
– Exchange of values
• E-commerce is more than just buying and selling
products online.
• Instead, it encompasses the entire online processes of
developing, marketing, selling, delivering, and paying for
products and services purchased by internet worked,
global market places of customers, with support of
worldwide network of business partners.
• In using the web as links between the buyers and
sellers, they can use internet, extranet and intranets.

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Classification of e-commerce
• Business-to-Business • Business –to-Employee
(B2B) e commerce • E-Government
• Business-to-Consumer • E-Learning
(B2C) e commerce • None-Business e-
• Consumer-to-Business commerce
(C2B) e commerce • Business-to-Business-to-
• Consumer-to- Customer
Consumer (C2C) e • Intra-business e commerce
commerce
• Exchange-to-Exchange
• Peer-to-Peer (P2P) e
commerce • Collaborative commerce
• M-commerce

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The Growth of E-Commerce

Retail e-commerce revenues have grown exponentially since 1995 and have only recently “slowed” to a very rapid 25 percent annual increase,
which is projected to remain the same until 2008.
Source: Based on data from eMarketer, 2006; Shop.org and Forrester Research, 2005; and authors.

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Digital Market
• Internet provides a digital environment
where buyers and sellers can meet,
search for products, display products, and
establish prices for those products.
• Net marketplaces are online
marketplaces where multiple buyers can
purchase from multiple sellers.

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Net Marketplace

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Digital Market
– Digital markets reduce
• Information asymmetry
• Search costs
• Transaction costs
• Menu costs
– Digital markets enable
• Price discrimination/distinction
• Dynamic pricing
• Disintermediation

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Digital Market
The Benefits of Disintermediation to the Consumer:
Removal of organizations and business process layer.

The typical distribution channel has several intermediary layers, each of
which adds to the final cost of a product, such as a sweater. Removing layers
lowers the final cost to the consumer.
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Types of digital marketplace
– Direct goods
– Indirect goods
– Vertical markets
• Steel
– Horizontal market
• Office furniture
– Industry-owned net marketplace
• Exostar
– Aerospace and defense industry
» Boeing
» Lockheed Martin
» Raytheon …
– Independently owned third-party net marketplaces
• Foodtrader.com

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DIGITAL COMMODITIES
Like other commodities, digital commodities
can be durable (in which case we call them
goods) or perishable (in which case we call
them services).
• Digital goods typically exist in code (software)
• Digital services typically involve processing
information without the process itself having any
permanent existence.

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DIGITAL GOODS

• Definition:
– Goods that can be delivered over a digital network
– Intangible goods that are sold through the internet.
Digital goods may also be called electronic goods or e-goods.
• Examples:
e-books, music files, software, digital images, Web
site templates, manuals in electronic format, and any
item which can be electronically stored in a file or
multiple files.

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Characteristics of Digital Goods
• In electronic commerce, digital goods is a general term that is used
to describe any goods that are stored, delivered and used in its
electronic format.
• Digital goods are shipped electronically to the consumer through e-
mail or download from the Internet.
• Costs of delivery over the Internet very low
• Marketing costs remain the same; pricing highly variable
• Industries with digital goods are undergoing revolutionary changes
(publishers, record labels, etc.)
• Usually when you purchase digital goods online, after payment has
been received the merchant will provide you with your digital item as
an e-mail attachment or they may provide you with a secure link
where you can download the item.

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Strategic Issues in Markets for Digital
Goods
• Indestructibility
– Innovation or Standardization?
• “If you don’t cannibalize your own market, someone else will.”
– Related issues of pricing and market organization
• Cost structure
• Market segmentation
• Reproducibility
– Can you even make a market?
• Excluding non-payers
• Copy protection versus customer annoyance
• Pricing in the face of easy reproducibility
– Copyright and Intellectual Property
• How to keep rivals from mimicking your success
• How to ensure that added value gets compensated

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3. M-Commerce:

– Services
– Applications

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Mobile Commerce
Mobile commerce is a natural result of combining two strongly emerging
trends: electronic commerce and pervasive computing.

Internet + Wireless + E-Business = M-Business
Going online anywhere at anytime and using multiple devices
New business opportunities

M-Commerce represents another wave of the e-commerce invasion that is
changing the nature of business in the 21st century.

Exponential growth (keeps growing)

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Global M-commerce Revenue 2000-2012

M-commerce sales represent a small fraction of total e-commerce sales,
but that percentage is steadily growing.
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Fixed Vs Mobile Commerce

Check Check
Purchase
Bank Stock
Stock
Balance Price

WAP Server Web Server
WAP Server Web Server

Multilingual Customer Product
Content Database Database
Database

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Characteristics of M-Commerce
Ubiquitous computing
Anywhere, anytime
Convenient, instant connectivity
Very personal
Device owner has an exclusive access to the contents/services
Service providers know who the owner is
Varied users, usage contexts
Elementary school students, grandpas, grandmas
Location & context-sensitive applications and services
Ambidextrous
Work & Play: Business purpose + Personal fun
People seem willing to pay for mobile services

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Requirements for M-Commerce

Hardware technologies for ubiquitous computing
Software infrastructure for ubiquitous computing
Sensing and interaction with the physical world
Graceful integration of human users
Systems considerations, including scalability, security, and
privacy.

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Technological Challenges of M-Commerce
Security
( Peace of Mind)
Personalized
Services

Usability
( Consistent and
Reliable Interface)

Intelligent
Services
( Smart about you,
Pervasive &
your location )
Flexible Payment
( Pay for any service
Using Mobile)
Consultation
Capabilities
( Phone a Friend )

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Technological Challenges of M-Commerce (cont’d)

Usability
Intelligent and Personalized Services
It is useful to determine what the mobile industry considers a service (a set
of functions offered to a user by an organization)
Personalized services have access to important user information that
enables them to tailor their operation to the needs of the served user.
Examples include speed dialing using personal contact lists or address book

Pervasive and Flexible Payment Mechanisms
It may be possible to replace credit-cards and paper money by making
mobile phones act as electronic wallets.
User’s credit-card details may be stored on the phone or on the user’s
Subscriber Identity Module (SIM) card.
“Access Tokens” are assigned when subscribing to a service or requesting to
buy an item.

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Security
Authentication “is a property by which the correct identity of an
entity or party is established with a required assurance.”
Consultation Capabilities
The Session Initiation Protocol (SIP) should be the biggest enabler of

these kinds of services.
These features should enable consultation sessions to be established
where a potential customer is taken through the features of a
product by an expert using a multimedia presentation and/or a
website.
Computing Environment
Infantile:
The area is in its infancy and needs lot of coordination between the
industries and institutions to bring out a common standard for
resolving the issues of pervasive computing .
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note Address :“Mobile Commerce – Vision and Challenges”, at ITPC 2003 Nepal by Prof. P. Venkataram IISc Bangalore IND

User input (voice, text, gestures) ;
Human computer interaction technology should be developed for voice
recognition, gesture recognition and natural language processing of the text.
Context aware systems:
The smart devices software and hardware architectures should be scalable,
and secured to handle context aware operations, whichmay involve
communication between diverse users and components.
IPv4:
A bridging support should be developed for embedded devices to
communicate through Internet.
Anonymity:
The devices should allow others devices to track its operation and
communicate among a group of components and users in a secured
manner.
Ubiquity:
The devices should be capable of ubiquitous computing.

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M-Commerce benefits can be seen in :

Banking
Financial services
Security services
Shopping
Advertising
Entertainment
Customer care
Information provision
Adhoc auction, where a particular user advertises the availability
of a particular commodity, and invites bids.

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Applications of M-Commerce

Mobile Financial Banking, brokerage, and payments for
Applications (B2C, B2B) mobile users
Sending user specific and location
Mobile Advertising (B2C)
sensitive advertisements
Mobile Inventory Location tracking of goods, boxes,
Management (B2C, B2B) People
Transmission of information
Proactive Service
related to aging components to
Management (B2C, B2B)
Vendors
Product Locating and Locating/ordering certain items
Shopping (B2C, B2B) from a mobile device
Services for customers to buy/sell
Mobile Auction (B2C, B2B)
certain items

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Applications of M-Commerce (Cont’d)

Mobile Booking and Ticketing Services allowing customers to book,
(B2C, B2B) tickets for travel, hotel and events
Obtaining instant feedback from
Mobile Marketing Research (B2C)
customers
Mobile CRM, Customer Support Customer acquisition and retention by
(B2C, B2B) providing truly personalized content
Mobile Entertainment Service VOD, MOD, gambling, interactive games
(B2C) and other services
Mobile Distance Education Taking classes, training courses using
(B2C, B2B) streaming video and audio
Information up/downloading by mobile
Wireless Business Re-engineering
users (e.g. adjusters in an insurance
(B2C, B2B)
company.

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Pros and Cons of Mobile Commerce
Desktop / PC Mobile Phone / PDA
 Greater Processing, multimedia  Online product browsing  Location based advertising
and display capabilities of PCs  Personalized Advertising  Greater Convenience
 Greater presentation facilities  Convenience for a  Capture of buying impulses
makes the PC more applicable technologically aware user.  Alternative payment mechanism
to larger purchases  Choice of many online stores e.g. Phone Bill
for a wide range of items  Supports new mobile services
discount Notifications.

E-Commerce M-Commerce
E-Commerce M-Commerce

 Dialup hassles  Distrust of technology, resistance  Smaller screen size can degrade
 Less possibility of impulse to change user experience
spending  Fears about security online  Small or immature input technologies
transactions  Market may be less open than
 Bad design of many user interfaces e-commerce market
 Slow connections if broadband  Tariffs are relatively high
access not available

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Management Information System 6

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