4.1 copyright © 2005 pearson education canada inc. management information systems, second canadian...

4.1Copyright © 2005 Pearson Education Canada Inc.

Management Information Systems, Management Information Systems, Second Canadian EditionSecond Canadian Edition

Chapter 4: The Digital Firm: Electronic Business and Electronic CommerceChapter 4: The Digital Firm: Electronic Business and Electronic Commerce

THE DIGITAL FIRM:THE DIGITAL FIRM:

ELECTRONIC ELECTRONIC BUSINESS AND BUSINESS AND ELECTRONIC ELECTRONIC COMMERCECOMMERCE




• How has Internet technology changed How has Internet technology changed business models?business models?

• What are the principal payment systems for e-What are the principal payment systems for e-commerce?commerce?

• How can Internet technology facilitate internal How can Internet technology facilitate internal business processes and SCM?business processes and SCM?

• What are the major managerial challenges What are the major managerial challenges posed by e-commerce?posed by e-commerce?

OBJECTIVES




Business Model: Business Model: • An abstraction of what an enterprise is An abstraction of what an enterprise is • Describes how the enterprise delivers a Describes how the enterprise delivers a

product or serviceproduct or service• eg: traditional bookstore vs Amazon.comeg: traditional bookstore vs Amazon.com• finding a successful one for e-commerce finding a successful one for e-commerce

has been difficulthas been difficult

THE EFFECT OF THE INTERNET ON BUSINESS MODELS




• Business-to-Customer (B2C):Business-to-Customer (B2C):– Electronic retailing directly to individual customers

• Business-to-Business (B2B):Business-to-Business (B2B):– Electronic sales among businesses

• Consumer-to-Consumer (C2C):Consumer-to-Consumer (C2C): – Consumers selling electronically to other consumers

• Mobile Commerce (M-Commerce):Mobile Commerce (M-Commerce): – use of handheld wireless devices for purchasing goods

and services– Used in B2B and B2C e-commerce transactions

ELECTRONIC COMMERCE




• Facilitates Dynamic Pricing: Facilitates Dynamic Pricing: – Real-time interactions between buyers

and sellers determine worth of items

• Facilitates Banner AdsFacilitates Banner Ads– vs. Pop-up Ads (user must click to close)

• Makes ‘Disintermediation’ possibleMakes ‘Disintermediation’ possible– removal of business process layers in a

value chain




Chapter 4: The Digital Firm: Electronic Business and Electronic CommerceChapter 4: The Digital Firm: Electronic Business and Electronic CommerceTHE EFFECT OF THE INTERNET ON BUSINESS MODELS




• Shrinks Information Asymmetry:Shrinks Information Asymmetry:– One party in a transaction has more

information than the other

• Allows Web Personalization:Allows Web Personalization:– tailoring of web content directly to a

specific user





• Reduces need to tradeoff Reduces need to tradeoff Richness for Reach :Richness for Reach :

– can now have both!

• Reduces Transaction Costs:Reduces Transaction Costs:

– Reduces costs of finding buyers, collecting payments, and (perhaps) delivering product (eg?)




Chapter 4: The Digital Firm: Electronic Business and Electronic CommerceChapter 4: The Digital Firm: Electronic Business and Electronic CommerceINFORMATION SYSTEMS IMPACT




• Makes possible new Business ModelsMakes possible new Business Models– ‘Virtual Storefront’:

• move from ‘bricks and mortar’ to ‘clicks and mortar’, or ‘pure play’ to sell product

– ‘Net Marketplace’: • Buyers and sellers meet - revenue from

transaction fees. • can serve either vertical or horizontal markets• vs. Private Industrial Network





E.G.: Covisint to supply automobile ‘vertical

market’




• Makes possible new Business ModelsMakes possible new Business Models– ‘Content Provider’:

• Provides digital content - customer pays for access

• Advertising can also provide revenue.

– ‘Portal’: • initial point of entry to web• specialized content and services









OBJECTIVES



Chapter 4: The Digital Firm: Electronic Business and Electronic CommerceChapter 4: The Digital Firm: Electronic Business and Electronic CommerceELECTRONIC COMMERCE PAYMENT SYSTEMS

Digital Credit Card Secure services for credit card payments – see Chapter 11 for details

Digital Wallet Software that stores credit card info, address etc; e.g. Amazon.com’s 1-Click shopping

Accumulated Balance Payment System

Accumulates micropayments as a debit balance; e.g. Qpass

Digital Cash (e-cash) A stored value digital account enabling instant payments; e.g. eCoin, Mondex smart cards

Peer-to-Peer Payment Digital currency for vendors who do not have pre-arranged payment options; e.g.PayPal

Digital Chequing Electronic cheque with digital signature; e.g. CHEXpedite

Electronic Billing Supports electronic payment of monthly bills; e.g. epost.ca



Chapter 4: The Digital Firm: Electronic Business and Electronic CommerceChapter 4: The Digital Firm: Electronic Business and Electronic CommerceELECTRONIC COMMERCE PAYMENT SYSTEMS








OBJECTIVES




How Intranets Support Electronic Business




Supply Chain Management needs more than an Intranet!How Intranets Support Electronic Business








OBJECTIVES




MANAGEMENT CHALLENGES & OPPORTUNITIES




Current status of E-Business in Canada:Current status of E-Business in Canada:• Internet use per capita – higher than USInternet use per capita – higher than US• E-commerce use per capita or per business E-commerce use per capita or per business

– lower than US– lower than US• E-commerce salesE-commerce sales

– up 27% in 2002 (down from 46% in 2001)– .6% of total revenue– 7 firms stopped using e-commerce in

2002 for every 10 that started• What are the barriers?What are the barriers?





Barriers Reported Barriers Reported (Cdn E-Business Roundtable):

• Products not suited to e-commerce (56%)Products not suited to e-commerce (56%)• Prefer current business model (36%)Prefer current business model (36%)

– E.G. ‘channel conflicts’

• Security concerns (14%)Security concerns (14%)• High costs (12%)High costs (12%)

– HBC - $40M / yr to upgrade web site

• Lack of skills (10%)Lack of skills (10%)• Customers not ready to purchase online Customers not ready to purchase online

(9.6%)(9.6%)





Other Barriers to consider:Other Barriers to consider:• Unproven business modelsUnproven business models

• Business process change requirementsBusiness process change requirements

• Legal issuesLegal issues

• Trust, security and privacyTrust, security and privacy

• Lack of broadband accessLack of broadband access

• False sense of security in retail circlesFalse sense of security in retail circles– previously sheltered from US competitionpreviously sheltered from US competition

• Investment decisions often based on ROIInvestment decisions often based on ROI– appropriate for e-commerce investment?appropriate for e-commerce investment?





Roundtable RecommendationsRoundtable Recommendations– Put all government services onlinePut all government services online

• Canada already leads the world in e-government

• portal at http://www.gc.ca/

– Offer financial incentives to businessesOffer financial incentives to businesses

– Expand the e-business talent poolExpand the e-business talent pool

– Build Canada’s e-business leadership profile Build Canada’s e-business leadership profile internationallyinternationally





Opportunities for Canadian Opportunities for Canadian Leadership:Leadership:

1.1. Network InfrastructureNetwork Infrastructure

2.2. Multimedia NorthMultimedia North

3.3. Global Customer Care CentresGlobal Customer Care Centres

4.4. Remote Service ProviderRemote Service Provider

5.5. Web Tools DeveloperWeb Tools Developer

4.5 STATUS OF CANADIAN E-COMMERCE




THE DIGITAL FIRM:THE DIGITAL FIRM:

ELECTRONIC ELECTRONIC BUSINESS AND BUSINESS AND ELECTRONIC ELECTRONIC COMMERCECOMMERCE

4.1 copyright © 2005 pearson education canada inc. management information systems, second canadian...

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