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EC and the Virtual Corporation Session 2 So What is Electronic Commerce? TECHNOLOGIES (TOOLS) METHODOLOGIES (PROCESSES) that enable ELECTRONIC FUNDS TRANSFER ELECTRONIC DATA INTERCHANGE ELECTRONIC BULLETIN BOARDS ELECTRONIC CATALOGS E-MAIL BAR CODING INTERNET / WWW

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EC and the Virtual Corporation Session 2

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EC and the Virtual Corporation

Session 2


So What is Electronic Commerce?

TECHNOLOGIES

(TOOLS)

METHODOLOGIES

(PROCESSES)

that enable

ELECTRONIC FUNDS TRANSFER

ELECTRONIC DATA INTERCHANGE

ELECTRONIC BULLETIN BOARDS

ELECTRONIC CATALOGS

E-MAIL

BAR CODING

INTERNET / WWW

CONTINUOUS ACQUISITION AND LIFE-CYCLE SUPPORT

JUST IN TIME

VENDOR MANAGED INVENTORIES


Elements of EC Defined

Communications: the delivery of information, products

services, or payments via telephone lines, computer

networks, or any other means

Business Process: the application of technology toward

the automation of business transactions and workflows


Elements of EC Defined

Service: a tool that addresses the desire of firms, consumers,

and management to cut service costs while improving the

quality of goods and increasing the speed of service delivery

Online: provides the capability of buying and selling

products and information on the Internet and other online

services


EC Defined

Key Elements of our definitions:

-EC is NOT just technology

-Technology applied to a business problem so that information is captured and exchanged in digital or electronic formats.


A Framework for Electronic Commerce

This is my Model for this course

What value is a model?

A model is only valuable

when it helps us to

explain (and maybe

predict) reality


Internet Framework

Zwass

Products &ElectronicAuctions

ServicesMarketplacesBrokerages

Products & SystemsRemote consumer svcs

Supplier-customer links

ServicesEnabling ServicesElectronic Catalogs

E-money, Authentication

Secure MessagingEDI, Email, EFT

InfrastructureHypermedia, Object MgtWWW, JAVA

Public/Private ComInternet, VANS

Wide-area TelecomPSTN


Framework for Electronic Commerce

What are the key elements of the Whitehouse’s position on EC?

Private Sector leadership

Avoidance of undue restrictions - taxation? Content?

Legal environment based on contract law

Recognition of unique qualities of the Internet

Facilitation of global E-commerce

Do you agree? What would you expect from candidates in 2000?


Network Economy

The law of inverse pricing & the law of generosity?

The best keeps getting cheaper

Most valuable things free?

Is this true?

The ultimate free market economy?

If so, how does a firm compete?

The net, by its very nature is hostile to profit margins. The net

is relentlessly efficient…hard-pressed to win and sustain any lasting

competitive advantage - WSJ 7/23/98


A Model for E-business

Stakeholders

Employees

Internal

Business Partners

Supply Chain Mgt

Enterprise Resource Planning

External

Knowledge

Applications

Enterprise

App Integration

Management Control

Administration Control

Customer Relationship Mgt

Selling Chain Mgt

Figure 4.11

page 103

Customers, Resellers


Why has the Internet

Emerged as a Business

Platform?


Graphical and Intuitive:

Easy NavigationPoint & Click

IntuitiveUser Friendly

Structured Information

Easy access to value-added content

Mass Medium Status


Interactive:

User-based InteractionsReal-time responsiveness

Decision MakersInteractive, intelligent help

Additional FunctionalityNew user interactions

Sophisticated ProgrammingJava and Active-X controls


Collaborative:

Real Time CommunicationsUniversal application

DiscussionsMulti-user chatting

Video Conferencing2--way, real time, MS NetMeeting

Supports “Groupware”

Calendars, scheduling


Intelligent:

Powerful Search ToolsCustomized information retrieval

Intelligent Agentsrobots, spiders, artificial intelligence

Ultimate one-to-one Marketing

Targeted ads, direct marketing

Track Behavior

Collect and analyze user information


Multimedia:

Video-based Content

Approaching a TV-quality medium

Audio-based Content“Streaming” media

Animations

Supporting simulations

“Virtual Reality”

3-D tours of parts buildings or autos


Other Characteristics ...

Consolidates Other Applications

Email, FTP, Multimedia.

SecureEncryption, certificates

Universal

Becoming the worldwide standard

Reliable and Scalable

Infrastructure is maturing rapidly now that it is “mission critical”


Some Key Internet Stats

Phenomenal Growth Rate


Some Key Internet Stats

Fastest Growing Medium Ever


Some Key Internet Stats

Users are More Experienced

www.cc.gatech.edu/gvu/user_surveys/


Some Key Internet Stats

Users Spend More Time On the Net


Some Key Internet Stats

“The Internet is no longer just affluent white males techies. The Internet looks like America -- a cross section of the population.”

CBS Newscast

June, 1999


Some Key Internet Stats

North American Net Users - 67%

The rest of the World - 33%

http://www.euromktg.com/globstats/index.html


Some Key Internet Stats

Worldwide Internet Growth


Summary of Stats

As of May 1999 - 171 million globally>50% in US and Canada

US & Canada have higher level of Internet Participation on per capita basis

In US growth has occurred more rapidly at higher income levels

Digital divide has increased 1994-97

Lower income countries have lower access rates

Mexico 100 million - 1 m access to a computer - 10% of those Internet

Implications?


What business models

do we find on the

Internet?


Emerging Internet Models

Business-Consumer

Business-Business

Product Based

www.amazon.com

www.mercata.com

www.officemax.com

www.boeing.com

Physical

www.Estamps.com

www.bluemountainarts.com

www.wsj.com

www.photodisc.com

Digital

Service Based

www.peapod.com

www.etrade.com

www.fedex.com

www.expedia.com

Traditional

www.roboshopper.com

www.ebates.com

www.netseminar.com

www.yesmail.com

Digital


Product Based

Physical

Business-Consumer

www.amazon.com

www.mercata.com

www.cdnow.com

www.dell.com

Candidates for success:

Compete based on:

Products that are generally well known to the buyer

that typically don't require the buyer to sample.

Good for generic products - books, cds, foods and

also specialty products that the buyer may already

know and like. Includes catalogs and electronic malls.

Selection

Ease of Use

Immediate Availability


Product Based

Physical

Business-Business

www.officemax.com

www.boeing.com

www.partnet.com

www.thesealman.com

Candidates for success:

Compete based on:

Selection

Availability

Ease of Use

Reduce Seller's cost

Products that buyers know and routinely purchase.

Includes any products that the buyer can select and

order with minimal or no personal interaction with

the seller. These are often parts or catalog items that

the buyer needs to support business operations.

Office supplies, equipment parts and accessories

are examples.


Product Based

Digital

Business-Consumer

www.Estamps.com

www.bluemountainarts.com

Candidates for success:

Compete based on:

Products that can be delivered electronically.

Examples include software or content based

products such as reports, articles, or books.

Can include anything that can be digitized,

including drawings, pictures, plans, etc. May

be subscription based. Often offer limited

information for free and charge a fee for

more indepth coverage.

Uniqueness

Availability


Business-Business

Product Based

Digital

www.wsj.com

www.photodisc.com

Candidates for success:

Compete based on:

Immediate Delivery

Timeliness of Information

Uniqueness

Ease of Use

Products that can be delivered electronically.

Includes reports, newsletters, advice,

expert opinions, statistics, software,

photographs, audio, video and other multimedia.


Service Based

Business-Consumer

Traditional

www.peapod.com

www.etrade.com

www.cybermeals.com

www.remax.com

Candidates for success:

Compete based on:

Migration of some aspect of delivering

traditional services to the Internet. The

service is typically not new. In fact, the

service is understood completely. It is the

ordering or delivery of the service via the

Internet that is the key. This works best

where the buyer does not need to be educated

about your service. They are likely to

understand what you offer. Services that

the customer likes to control - banking, stock trading, etc.

Convenience

Speed of Delivery

Reduction of Cycle Time

Control


Business-Business

Service Based

Traditional

www.fedex.com

www.expedia.com

www.usps.com

Candidates for success:

Compete based on:

Cycle Time Reduction

Cost Reduction

Control

Migration of some aspect of delivering

traditional services to the Internet. The

service is typically not new. In fact, the

service is understood completely. It is the

ordering or delivery of the service via the

Internet that is the key. This works best

where the buyer does not need to be

educated about your service. They are

likely to understand what you offer.

Gives buyer control.


Service Based

Business-Consumer

Digital

www.roboshopper.com

www.ebates.com

www.altavista.com

www.compare.com

www.ebay.com

www.pricewatch.com

Candidates for success:

Compete based on:

Reduction of Cycle Time

Unique value proposition

Entirely new services made possible

by the Internet. Services that make the

buyer a more productive user of the

Internet such as search engines or software

agents. Services that would not be possible

without the Internet. Services that create a

new market like auction sites.


Service Based

Digital

Business-Business

www.netseminar.com

www.yesmail.com

Candidates for success:

Compete based on:

Entirely new services made possible by

the Internet. Services that make the

buyer a more productive user of the

Internet such as search engines or

software agents. Services that would

not be possible without the Internet.

Services that create a new market.

Cycle Time Reduction

Cost Reduction

Unique value proposition


Approaching the Web

Processes

Fulfillment

Settlement

Workflow

Transactions

Database Queries

Payments

Funds Transfers

Interactivity

Increasing Functionality

Registration

Games

Forms

Publishing

Advertising

Marketing

Information

Time or Maturity

David Kosiur, “Understanding Electronic Commerce”, p. 107, Microsoft Press: 1997


Understanding

the

Infrastructure


The BIG Picture

More on the

Backbone

Later


Telephony 101

The Internet is built “on top” of the Public Switched Telephone Network

Also called an overlay network

LEC View

Last Mile

Local Loop

Local Loop

Slowest portion

of the network


Telephony 101

Hierarchy of Central Offices

Total Network

is PSTN

IXC View

Digital CO’s now

the norm

Circuit Switching

The Internet is a Packet

Switched Network


Transmission Media

Acceptable for Voice - analog signaling

Unshielded Twisted Pair

Millions of miles in place

Not optimal for data communications

Copper Wire

Copper wire inside shielded cable

Capable of handling very high frequencies

Dozens of 6 MHz channels on single cable

Coaxial Cable


Transmission Media

Media of Choice

Uses frequencies a million times higher

Speeds as high as 9.6 gbps

Now being used with cable

Fiber

Wireless

Microwave, synchronous, low-orbit

Iridium, Globalstar - LEO

Eliminates need for wire infrastructure

Complete mobility


Internet: End-End

Difficult to buy a machine that

can’t exploit the features of the

Internet

What about Network PCs?

NY Times article on Sun 8/31/99

http://navigators.com/internet_architecture.html

Russ Haynal


Internet: End-End

Access Options:

Dial up Access56 Kbps

ISDN128 Kbps

T1 Circuit1.54 Mbps

ADSL3-6 Mbps

Ethernet10 Mbps

Satellite10-100 Mbps

Cable Modem30-40Mbps

T3 Circuit45 Mbps

Fiber OC-1929953.28 Mbps


Internet: End-End


Internet: End-End

Usually located in

a CO


Internet: End-End

This provides you access

to the services of the ISP


Internet: End-End

This is the Internet Backbone

UUNET Worldcom (MCI)

SONET

Synchronous Optical Network

Expected to be the standard for

next 2 decades

Hierarchical scheme

OC - 192 fastest 9953.28 Mbps

Equal to 5376 x 24 voice circuits


Internet: End-End


Internet: End-End

Step 1: Client and Server establish tcp/ip connection

Step 2: Client issues a request which includes a URL

Step 3: Server issues a response

Step 4: Server terminates the connection


Internet: End-End

Data Communications on the Internet

uses TCP/IP which is a Packet Switched Protocol

Data not sent in real time

Stored in computer until packet available

Only then is the packet sent

Extremely efficient

Freight Train Analogy

Packet Switching


Internet: End-End

TCP/IP - Next Week


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