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Electronic Commerce and the Virtual Enterprise. Session 1:. Defining Electronic Commerce and The Network Economy. Electronic Commerce . “Electronic Commerce has generated over $1.2 billion in wealth in the past 18 months” -Al Gore. How is this possible?. Electronic Commerce.

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Electronic Commerce and the Virtual Enterprise

Session 1:

Defining Electronic Commerce and

The Network Economy


Electronic commerce l.jpg
Electronic Commerce

“Electronic Commerce has generated over $1.2 billion

in wealth in the past 18 months”

-Al Gore

How is this possible?


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Electronic Commerce

According to a recent survey, 66% felt the computer

was the most significant invention of the 20th century.

The airplane was 2nd at 18%

Also, more people believe that Bill Gates (45%) has a

greater impact on their day-to-day lives than Bill Clinton (44%)

www.upi.com/corp/news/980430


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Electronic Commerce

Volchok Computing did a recent study

-only 23% of senior execs at Fortune 1000 companies

could explain the purpose of a modem while 93% of

6th graders got it right

-98% of the 6th graders knew the Internet was not

owned by anyone, 68% of the execs thought some

corporation ran it

-23% of the execs thought the Internet was part of Microsoft


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Electronic Commerce

Increasingly value is found not in tangible assets such as

products but in intangible assets such as branding, customer

relationship, supplier integration and the aggregation of key

information assets.

-Kalakota


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Growth

1998-1999

Number of web users world-wide increased by 55%

Number of hosts rose by 46%

Number of web servers increased by 128%

Number of new web address registrations rose by 137%

www.ecommerce.gov/ede/chapter1.html


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Growth

Dell’s online sales more than doubled in 1998 to

$14 million per day. Last quarter sales were $18 m/day

1st quarter 1999 Travelocity’s sales grew to $128 m - 156%

increase over same period a year earlier

Quicken mortgage arranged $400m in loans in 1Q99 versus

$600 m for all of 1998

www.ecommerce.gov/ede/chapter1.html


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Growth

In early 1998 forecasters were suggesting that business-to-business

e-commerce might rise to $300 billion by 2002. Most now consider

that estimate to be too low.

Forrester suggests b-b will reach $1.3 trillion by 2003

EVERY estimate of e-commerce volume and growth has been LOW

www.ecommerce.gov/ede/chapter1.html


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So what is

Electronic Commerce?


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So What is Electronic Commerce?

-Hollywood SX www.hsx.com

-Satellite www.terraserver.com

-Voice Recognition 888-573-8255 Jupiter

-Translations www.altavista.com

-Bus Call www.buscall.com

-Online cameras events.exploratorium.edu/CAM1/index.html

-PoliceScanner www.policescanner.com

-LA Traffic traffic.maxwell.com/la/

-Ebay www.ebay.com


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So What is Electronic Commerce?

Is it technology?

Is it a process?

Is is a methodology?


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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


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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


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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


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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.


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Electronic Commerce

Technology is certainly integral to any definition of EC

“Good Technology that is accepted by both business

and society as a whole stands an excellent change of

changing the rules”

-Jeff Harrow, Compaq


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EC versus IS/IT

How is Electronic Commerce different from the

Information Systems function in an enterprise?

“EC endeavors to improve the execution of business

transactions over various networks” - Kalakota & Whinston

Information Systems manage information as a resource


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E-commerce vs E-business?


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E-commerce vs E-busines

E-commerce concerns itself with the transaction

E-business is everything before and after the sale

Let’s look at a model for E-business


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Stakeholders

Employees

A Model for E-business

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

Customers, Resellers


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A Framework for Electronic Commerce

This is my Model for this course

Let’s talk through each

component


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Virtual Corporations

  • An organization that extends its influence beyond the

  • boundaries of time, distance, and physical facilities.

  • May be temporary in nature, designed to perform a

  • given task or permanent as long as the business

  • need exists

  • Some examples?


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    The Network Economy

    As the virtual corporation emerges we begin to think

    of moving towards an economy based on the Network.

    What does that mean???

    Some argue that the very nature of the firm will

    change - do we need to organize resources in the

    same way that we have?


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    The Network Economy

    The digital revolution gets all the headlines these days.

    But turning slowly beneath the fast-forward turbulence,

    steadily driving the gyrating cycles of cool technogadgets

    and gotta-haves, is a much more profound revolution - the

    Network Economy

    -Kevin Kelly, New Rules for the Networked Economy


    The network economy25 l.jpg
    The Network Economy

    What’s the value of a single Fax machine?

    As the number of nodes in a network increases arithmetically,

    the value of the network increases exponentially. Adding

    a few more members can dramatically increase value.

    Value is derived from plentitude - not scarcity!


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    The Network Economy

    The fate of individual corporations is not dependent on their

    own merits but also on the fate of their neighbors, their allies,

    their competitors...

    Networks churn - sustainable dis-equilibrium - quote from Kelly


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    The Network Economy

    Donald Hicks of UT studied the half-life of Texas businesses

    for the past 22 years

    -Their longevity has dropped by 1/2 since 1970

    -Number of jobs growing faster than ever

    -Wages at highest point and growing

    “the vast majority of the employers on which Texans will depend

    in the year 2026 - or even 2006 - do not yet exist”


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    The Network Economy

    What are the implications for us?

    Change is constant

    Planning horizons shorten

    Education is continuous

    Spiral Development

    Others?


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    The Internet

    What was total e-commerce in 1990?

    What triggered the growth?

    Why?


    The internet30 l.jpg
    The Internet

    Email

    TCP/IP

    EDI

    Internet

    E-Mall

    HTML

    HTTP

    Catalogs

    Browsers

    We will discuss many technologies but the Internet will be central

    to all


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    The Internet

    Jack Welch - The Internet is priority 1, 2, 3, and 4 for GE

    Clearly the Internet has emerged as a viable business platform

    WHY?

    Payment Systems

    Global access

    Security

    Information Exchange

    Marketplace


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    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.hallmark.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


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    Assignment for Next Week

    For now the web page is: acasun.eckerd.edu/~duffja

    1. Complete the matrix from the previous page

    2. Read the Whitehouse position paper on ecommerce

    www.whitehouse.gov/WH/New/Commerce/read.html

    3. Read New Rules for the Digital Economy

    www.wired.com/wired/archive/5.09/newrules_pr.html

    4. Macro-Effects of E-commerce

    www.mhhe.com/business/mis/zwass/ecpaper.html

    5. Send me an email - duffj@ctc.com

    6. Read 1 & 2 in the text when available