From E-Commerce to E-Business The Convergence of Business and Technology

1. From E-Commerce to E-BusinessThe Convergence of Business and Technology Avimanyu Datta Doctoral Student Washington State University adatta@wsu.edu From E-Commerce to E-Business

2. Key Questions • Did e-commerce start with the Internet and the Web? • What’s the difference between “e-commerce” and “e-business”? • If the Web is so great, why did all those companies fail? • Are web services the next big thing in e-business? From E-Commerce to E-Business

3. Electronic Commerce (narrow definition) “Conducting business transactions through ‘market-facing systems’.” CUSTOMERS Order-to-Cash Delivering services on-line Selling products on-line Procurement EDI orders from customers Purchasing goods and services electronically SUPPLIERS From E-Commerce to E-Business

4. Pre-Sales PARTNERS Providing product information to prospective customers Commercialization Exchanging engineering drawings with partners EMPLOYEES Benefits Administration Reviewing and updating benefits information Post-Sales Customer self-help electronic business Electronic Commerce (expanded definition) “Conducting business through ‘market-facing systems’.” CUSTOMERS Order-to-Cash Delivering services on-line Selling products on-line Procurement EDI orders from customers Purchasing goods and services electronically SUPPLIERS From E-Commerce to E-Business

5. The Beginning of E-Commerce B2B B2C B2E 1980,s System to Individual 1980s Phone System Automation Phone System Automation Phone System Automation System to System Electronic Transactions 1980s From E-Commerce to E-Business

6. … and the Supporting Technologies B2B B2C B2E System to Individual 1980s IVR* IVR IVR System to System *IVR: Interactive Voice Response System 1980s EDI From E-Commerce to E-Business

7. The Elements of EDI • A strength of EDI is its transport & infrastructure • But it came with a price EDI Expensive Vocabulary • Standard documents • EDI standards • very extensive • ANSI X12 • ISO 9735 • UN/EDIFACT Transport • Purchased transport • highly reliable • very secure • Private network • VANs (value Added Networks) Infrastruc-ture • Some middleware • commonly purchased • map from one standard to another • Computer Industry in 1980s was vertical • Middleware • Brokers, translators, maps From E-Commerce to E-Business

8. Private Network Electronic Data Interchange Connect with private network Translate documents EDI standard documents Middleware Middleware Translator Translator Enterprise A Enterprise B From E-Commerce to E-Business

9. Public Phone Network Integrated Voice Response Applications Telephone Install specialized system Connect to phone network Corporate Phone Network IVR System Data servers Make core systems accessible by IVR system Middleware Translator Core Business Systems From E-Commerce to E-Business

10. Evolution to E-Business B2B B2C B2E 1990s System to Individual Phone System Automation Phone System Automation Phone System Automation 1980s Marketing Info Customer Self-service Marketing Info E-Tailing Employee Self-service 1990s System to System Electronic Transactions 1980s Customer Relationship Mgmt 1990s From E-Commerce to E-Business

11. … and the Supporting Technologies B2B B2C B2E System to Individual IVR IVR IVR 1980s Internet/Web Internet/Web Intranet/Web 1990s System to System EDI 1980s Internet/XML 1990s From E-Commerce to E-Business

12. The Elements of Internet E-Business • Many choices, but also more challenge and responsibility Internet Inexpensive ??? Vocabulary HTML for presentation XML for content representation • A few XML vocabularies • cXML (Ariba) • xCBL (CommerceOne) • RosettaNet • ebXML Transport Core set of base standards Must address security … and redundancy and … https, https, SSL, ftp Firewalls, PKI Infrastruc-ture • Many options • built or purchased Web servers, app servers, routers ISPs From E-Commerce to E-Business

13. Internet Internet System to System Connect with Internet Add robustness, redundancy, security Connect with other enterprise Translate documents XML documents Middleware Middleware Translator Translator Enterprise A Enterprise B From E-Commerce to E-Business

14. Internet Web Applications Browser Web server The ubiquitous web browser Commerce application server Data servers Make core systems accessible by apps on app server Middleware Translator Core Business Systems From E-Commerce to E-Business

15. Internet economy poses opportunities and threats … • Transform traditional business models using IT as enabler • Compression of time & space • 30% of BancAmerica’s online customers are outside of traditional geographic area (THINK ABOUT GLOALIZATION) • Adaptec reduces manufacturing cycle from 12 to 8 weeks, slashing $10M in inventory costs • “Always open” • ‘Friction reduction’ creating new sources of economic value • Intermediation premium (e.g. broker’s fee)  • Cost of brick & mortar  • But adding market turbulence • “The Internet will change everything.” From E-Commerce to E-Business

16. Internet (New Channel) The “Actor” Internet-Only Competitor Schwab ETrade Sabre, Travelocity Barnes & Noble Internet Preview Travel Amazon.com New Customer Space Market TurbulenceTravel, Brokerage, Books Customer Space (Physical World) Traditional Competitor Killer strategies combine e-commerce (traditional and web-based) with M-commerce_ Merrill Lynch Travel Agencies Local Bookstores Courtesy: Cisco Systems From E-Commerce to E-Business

17. The Ultimate Impact • The Internet dramatically lowers the cost of communication Potential Revolutionary Impact Likely Incremental Impact Financial Services Entertainment Health Care Education Government Retailing Manufacturing Travel • But: • Privacy issues • Need for additional technology (e.g. broadband, on-line bill paying) • Who controls the information • Why? – physical factors overrule virtual • Top of the line web site  $15-25M • Warehouse & distribution system  $150M Courtesy: Business Week From E-Commerce to E-Business

18. ERP Order to Cash Manufac-turing Procure-ment Finance Challenge: Process Improvement • E-Business is like putting a magnifying glass in front of your core processes (Processes become transparent) from to Legacy Business Operational Processes Legacy Back Office Systems New Business Operational Processes From E-Commerce to E-Business

19. Network Challenge: Systems Development • Product software development and information systems development are becoming intertwined Physical Store from to Product Software Information Systems From E-Commerce to E-Business

20. Why Did the “.com” Companies Fail? • Flawed business model • Companies view the technology as their business, rather than having a business • Lose money on individual transactions • Amazon.com loses almost $3 per order on multi-product orders. They broke even in 2002. • Lack of control over supply of what they sell • Priceline.com • All the good ideas duplicated by established concerns with deep pockets and staying power From E-Commerce to E-Business

21. Likely Winners ? From E-Commerce to E-Business

22. Web Services – the Future? B2B B2C B2E 2000s System to Individual IVR IVR IVR Internet/Web Internet/Web Intranet/Web Internet/Web System to System EDI Internet/XML Web Services Web Services Web Services From E-Commerce to E-Business

23. Web Services • Built on the foundation from Internet e-Business Web Services ??? Vocabulary New standards – but built on XML. WSDL, UDDI for service interaction But … business, security, … Transport Built on a ubiquitous core – but is it robust enough? XML-based (e.g. SOAP) Over http, https, … Infrastruc-ture Much the same as for Internet e-Business Middleware (RPC, MOM, msg. Brokers, TP monitors) Web servers, app servers, routers, ISPs From E-Commerce to E-Business

24. Web Services – “ready for prime time”? • Favorable Signs • Takes “component” foundation … • Reuse culture • Semantic agreement • … and leverages Internet technologies • http • XML • Challenges • Cross-vendor interoperability • Simplicity • Security • Pre- and post-transaction processes • Trading partner agreements From E-Commerce to E-Business

25. Summary • E-business has been around for 20+ years, but the opportunities have been accelerated by the Internet and the web. • Business is still business • The Internet hasn’t changed that – though for a while many thought it might have. • Web services may be the “next big thing”, but EDI, IVR, etc. will probably still be around. From E-Commerce to E-Business