Introduction to E-business and understanding Business

1. Introduction to E-business and understanding Business ITU Spring 2013

2. Goals of the course The course provides insight into e-business projects by giving students a high-level understanding for the interplay between organization, e-business concepts, strategies and it solutions. After the course, the student will be able to play an active part in development and implementation of e-business initiatives. 2

3. Learning Outcomes A student who has met the objectives of the course will be able to: Define key e-business concepts, strategies, tools, frameworks, theories, methods and technologies Identify trends and developments within e-business for different types of enterprises and industries Characterize relevant e-business concepts in respect to type of company and industry  Analyze a specific company´s organization, culture, strategy, environment and key processes  Argue for appropriate choice of e-business concepts for a specific company Discuss relevant key issues in managing e-business for a specific company Integrate analysis, chosen e-business concepts and theories and discussion on managing e-business - into a coherent academic written business report 3

4. Content The class combines theory and practical experience of conducting e-business projects. We examine different business models and discuss their potentials and challenges. During the course we work with YOUR cases, that provides better understanding of possibilities and challenges. Subjects: organization, teamwork, business models, strategies, new technologies within e-business, and a presentation of new ways to conduct e-business. 4

5. Who am i? Ulrik Falktoft Msc.it in e-business from ITU Worked since 1998 as independent consultant with business development, strategy, innovation, e-business and more External lecturer at CBS and IT-University in perspectives on e-business (EBUSS), knowledge management and learning organizations (Master) and e-business and understanding business (DMD) External lecturer at DTU and AAUK in computer-supported communication and distributed co-operation, introduction to e-business and supervising bachelor og and master thesises 5

6. Who are Troels? Bachelor? Courses at EBUSS? Interests? Thesis? Other? 6

7. Who are you? Different programs and/or courses? Different profiles? Different nationalities? Other…? 7

8. Materials and teaching Textbook Dave Chaffey: "E-business and E-commerce Management," 5th edition, Prentice Hall, 2011 Old Chinese proverb: - Tell me – and I will forget - Show me – and I might remember - Involve me – and I will understand So interactive lectures means: I don’t want to talk all day I expect you to discuss and come with input and questions You will groupwise work and present as we go along Not mandatory assignments – possibility for getting feedback 8

9. Groups We will today make groups You will be responsible for presenting as we go along Groups does not mean that you should slack! Groups mean participation and collective responsibility .. If one member fails to deliver - the group is responsible for providing So: act responsible… 9

10. Exam 2013-05-15: Submit written report (30-50 pages per group) 2012-06-12/13/14/17/18: Oral exam (probably one or two days) 10

11. Any questions so far? 11

12. I have some questions! What is e-business? Can you come up with examples? What is e-commerce? 12

13. E-business is.. Marketing, buying, selling, delivering, servicing, and paying for products , services and information across networks linking an enterprise and its prospects, customers, agents, suppliers, competitors, allies and complementors. OR: All aspects of business (using IT) IT-infrastructure, Internet, 3G /Edge and other distributed digital technologies

14. And e-commerce…?

15. … plus e-management E-business E-Management E-commerce

16. So what is new? Some say that a e-business revolution is taking place today Migration from place to space Which e-business models will succeed with current channels to customers? What are the key challenges facing established businesses migrating from traditional market place to a combination of place and space? 16

17. Collapse of the distribution chain Consumer $54.00 Grower Transporter $8.00 Wholesaler $12.00 Florist $24.00 Consumer $60.00

18. Disintermediation of consumer distribution channel

19. Channel conflicts Channel conflicts have always existed but they are amplified by the Internet The myth Elimination of all intermediaries Easy identification of buyers and sellers - no need for middlemen The reality The Internet challenges intermediaries New types of intermediaries have appeared

20. Dis-, re- and countermediation • Types of intermediaries • Directories (Yahoo) • Search engines (Google) • Virtual resellers (Amazon) • Financial intermediaries (Nordnet) • Evaluators (comparison site)

21. Added value of intermediary Payment - credit card, letter of credit Information - news, reports, use flashes; product information Trust - relationship, certificates, membership Pricing - auction, fixed pricing, volume discount Shipping - services, insurance, custom handling Mall - list of vendors Community - chat, discussion groups, conferences

22. The main functions of markets matching buyers and sellers facilitating the exchange of information, goods, services, and payments providing a Legal regulatory framework

23. Marketplace vs. Marketspace Marketplace Marketspace Information becomes digital Costs of replication and distribution lowered Small vs. big company • Cash • Checks • Paper documents • Store fronts • Face-to-face meetings

24. Motivations for e-business Huge growth in e-business Most people in developed countries have internet access Estimated size of e-business in the US: 2001-2002: 330 billion US$ revenue 2003-2005: 1 trillion US$ revenue Though disintermediation has received a lot of attention , intermediaries account for 20% of the revenue within e-business Growth in dot-coms Operate predominantly in space Often pioneering and testing new business models

25. What kind of market models? There are four basic market models for e-commerce: Store front model Auction model Portal model Dynamic pricing model

26. Store front sites Combines seller and buyer directly A single or company web site where products and services are sold Mechanisms necessary for conducting the sale: Browsing online product catalogue Adding products to shopping chart Checking out products Paying online Physical products are usually shipped directly to customers’ home address An online shopping center where many stores are located some are merely directories some provide shared services some are actually large click-and-mortar retailers (a store that exists online and in the physical world) some are virtual retailers

28. Auction sites A place for buyers and sellers to negotiate a price for a product Auctions can be done: online or off-line at public sites (eBay) or at private sites (by invitation) Different models Traditional auctioning (buyers bid) Reverse auctioning (sellers bid) Dutch auctioning (price falls constantly) Commission paid to the site

30. Portals A place where you can find everything Horizontal portals Broad range of information, Yahoo Vertical portals Single area of interest, WebMd.com Commission from advertisers or percentage of sale

33. Dynamic price sites Name-your-price model E.g. Peters pris Comparison pricing model E.g. hi-fi priser, Kelkoo Bartering model E.g. Swap.com Offering free products and services model E.g. telephone operators

38. Some conclusions Several examples of e-business pioneers will drive traditional businesses to conduct e-business as well These traditional businesses will evolve from current business models to a combination of place and space E-business often amplify channel conflicts E-business enables a total reengineering of all internal and inter-organizational business processes, and will fundamentally challenge industry structures

39. DOT-com (or DOT-death) To optimistic prospects around 1999-2001 A lot ordinary businesses that just went electronic did not make it Other transformed into new ways of doing their business And change and transformation - that is the real challenge when going from ”old” business to e-business An example of a good transformation…

40. The second wave of e-business Three important characteristics: Lower, more realistic, stock market valuations Existing firms will transform to an e-business model (place and space) Cheaper , higher quality services Distinctions between B2B, B2C and C2C will disappear

41. The third wave Cloud, SaaS and last but not least – smartphones (in all shappes and forms) What is different from cloud and smartphone apps – something we didn’t see 10 years ago?

42. We must still understand business Way to many business fail when trying to transform into e-business That is often because they don’t understand the basics of their own organization, strategy, culture and leadership It furthermore takes a new understanding of customers An how to transform and change – while the environment change..

43. Customers

44. Waves of change

45. Form groups Form af group of 6 persons with 4 other Belbin types Do a short presentation of each individual Tell the others is you know that there are days during these three weeks, where you cannot show up Talk about how you individually prefer to do group work (and not about that you may not prefer group work..)

46. An e-business idea Think individually about an e-business idea Present all the ideas in the group Discuss which ideas you find interesting It is ok to combine ideas into new ideas Come up with a e-business concept that all in the group find interesting

47. Presentation Prepare a short presentation of your idea for an e-business concept for the class

48. Validate e-business concept Why is it an e-business concept? How can you create value on the idea? Who are the potential customers? What could be the competition? Is the technology available or…? Desirable – Feasible - Viable

49. End of day Use the knowledge you get from the book and forthcomming chapters, to develop you idea further Think, reflect, be open to new ideas and perspectives Next time: Read chapter 2 and skim chapter 1 to recap Remember to use proper references in your presentation. It will help you keeping the overview and it is mandatory in the final report.