E-Business, E-Commerce: Networks and Strategies

E-Business and E-Commerce Objectives

• Extranets and intranets have different functions and usage in organizations
• Electronic commerce description and evolution
• Strategies companies use to compete in cyberspace
• Stages of business-to-consumer e-commerce and the drivers of mobile commerce
• Key success factors for e-commerce applications
• General security fundamentals for e-business

Network Computing Spectrum

• Local Area Network (LAN) interconnects computers in a residence, school, lab, university campus, or office
• Intranet is an internal, private network using web technologies to facilitate proprietary information transmission
• Extranet facilitates business between two or more firms via the Internet
• Internet and World Wide Web created new communication capabilities to enable e-business

Internet, Intranet, and Extranet Comparison

• Internet is a global system of computer networks
• Intranet is a private network within an enterprise
• Extranet is a private network using technology and public telecommunications to share business information securely
• Intranet may consist of interlinked LANs and leased lines
• The primary purpose of an intranet is to share company information among employees
• Extranets combine the privacy and security of intranets with internet global reach
• Extranets grant access to outside business partners, suppliers, and customers
• Extranets provide flexibility for internal and external users and support tunneling
• E-mail and internet chat for the internet, along with teleconferencing for intranet
• Extranets enable the exchange of large data volumes using electronic data interchange (EDI).

Intranet Architecture

• Intranet is a private network within an enterprise that uses TCP/IP infrastructure like the internet
• Access is restricted to authorized users
• Intranets facilitate communication within an organization and sharing information and resources among employees
• Wide-Area Network (WAN) is a network of networks, facilitating communication between smaller networks that are geographically separated
• WANs cover larger areas and connect devices worldwide, unlike LANs confined to specific locations

Intranet Applications

• Training: Offers online access to training functions, including course catalogs, content, registration, and evaluation
• Training can significantly increase productivity, standardization, and reduce costs
• Application Integration: Integrates and consolidates information from disparate systems into a single point of access
• Application integration increases employee productivity and output quality
• Real-Time Access to Information: Allows employees real-time information access
• Providing real-time access reduces customer service needs by giving authorized and interested parties direct system access

Intranet Applications - Online Entry of Information and Collaboration

• Online information entry streamlines routine business processes like expense reporting
• Online information entry provides significant cost reductions
• It can reduce administrative support and shift maintenance functions back to employees
• Collaboration lets employees communicate across geographic and departmental boundaries
• Collaboration allows for shorter development cycle times
• Collaboration allows employees to stay informed about current projects, corporate news, and market conditions

Extranet Features and Benefits

• Extranets are secure network architectures that provide access to internal systems for customers, suppliers, and employees
• Extranets enables two or more firms to conduct business
• It is an excellent use of B2B, that yields a positive return on tech investments
• Benefits include improved timeliness and accuracy of communications
• Benefits use a Virtual Private Network (VPN) as standard security protocol for disparate computing platforms resulting in fewer investments
• Benefits include ease of use and minimal training requirements
• Extranets can automate transactions, reducing cost and cycle time

Extranet: Virtual Private Network (VPN)

• VPN is a secure network technique protecting extranet communications over an IP network
• VPN employs tunneling to encapsulate, encrypt, and transmit data over the Internet
• VPN requires server authentication, verifying users with passwords for operation
• A VPN can be fully integrated and dedicated
• As with VAN, VPN utilizes the IP network backbone to be a more cost-effective option for small to medium enterprises (SMEs)

Extranet Applications: Supply Chain Management and Real-time Access

• Supply Chain Management (SCM) exchanges supply and manufacturing data between customers and suppliers
• The extranet includes online purchasing, supplier inventory checks, design specification transfer, and other business tasks
• Real-time access allows business partners and customers to access real-time system information
• Real-time access reduces customer service needs by providing direct system access to authorized parties

Extranet Applications: Collaboration and Enterprise Portals

• Collaboration helps companies respond proactively to market changes directly with suppliers and customers
• Collaboration allows for shorter development cycles
• Collaboration allows reorganization of the purchasing function, turning buyers into supplier relationship managers
• Enterprise portals are access points combining multiple extranets where business partners access secure, proprietary data
• Enterprise portals provide a single point of access for information from various systems
• Benefits include faster partner access and reduced maintenance costs by reducing the number of extranets

E-Business Defined

• Electronic Business: Uses electronic information to improve performance, create value, and enable new relationships between businesses and customers
• Electronic Commerce: Involves marketing, selling, and buying products and services on the Internet
• Internet Commerce: Online exchange of information and services using network technologies.
• Web Commerce

Types of E-Commerce

• B2C (Business-Consumer): Customers deal directly with an organization and avoid intermediaries
• Disintermediation: Elimination of intermediate organizations between the producer and the consumer
• B2B (Business-Business): Subset of e-commerce, all participants are organizations
• B2B is a useful tool for connecting business partners in a virtual supply chain to cut resupply times and reduce cost
• C2C (Consumer-Consumer): Subset of e-commerce involving consumers selling directly to other consumers
• Popular Consumer-to-Consumer sites: OLX, eBid, Ubid

Stages of E-Commerce Maturity

• E-Information: Websites globally disseminate static information about the company and its products available 24/7, similar to an electronic brochure
• E-Integration: Websites integrated with corporate databases to extract and display relevant information for customer requests such as displaying a bank balance
• E-Transaction: Websites allowing customers to enter orders and make payments directly online, like buying a book

E-Commerce Impact to Competitiveness:

• E-commerce enables new products and services and encourages substitute products
• E-commerce lowers barriers to entry and changes the balance of power between customers and suppliers
• E-commerce transforms industries and creates new opportunities for new brand building and a larger customer base

E-Commerce Strategy and Competitiveness: AVIS RENTA CAR

• Technology combined with a reengineered business process creates a competitive advantage

E-Commerce Business Strategies

• Business strategies come in three types and require a financially sound business model
• Brick-and-Mortar operates solely in physical markets
• Examples of Brick-and-Mortar include stores, offices, and manufacturing plants
• Click-and-Mortar operates in physical locations with an added e-commerce component
• Click-and-Mortar requires maximizing business opportunities in physical and virtual settings and requires an investment in systems and space
• Click-Only strategies conduct business transactions virtually
• Click-Only strategies require significant expertise and investment in technology and systems staff
• Examples of Click-Only strategies include Google.com, WSJ.com, eBay.com, and Amazon.com

Click-Only strategies - Revenue Models

• Advertising generates fees from advertisers for advertisements
• Subscription generates fees from subscribers to access content or services
• Transaction fees generate fees (commissions) for enabling or executing a transaction
• Sales generate revenues through goods, information, or services
• Affiliates generate fees for business referrals