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Electronic Business

Course: Information Technology Applications in Business, Grade 11, Open (BTA3O)

Unit: Electronic Business

Topic: The Concept and Operations of Electronic Business

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AgendaDefining e-business 10 min

e-business networks 5 min

Functions of e-business 5 min

Security and Regulations 5 min

e-business tips 10 min

Statistics 5 min

Present State of e-business 5 min

Future of e-business 5 min

In-class activity - shopping online 25 min

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What is e-business?

Technically

e-business is commercial activity conducted over networks linking electronic devices.

Basically

e-business is a cheap way of connecting computers in order to accomplish business tasks.

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Examples of e-business• Purchasing a book on the Internet.• Purchasing an airline ticket on the Internet.• Calling a toll free number to order a video

using the seller’s interactive telephone computer system.

• Faxing an advertisement for solicitation.• Withdrawing funds from a linked bank

machine.• Purchasing an item through a computer

enabled kiosk.• Paying for gas with a credit card at the pump.

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What kind of networks are used for e-business?

Technically• e-business first emerged in the 1960’s on closed networks

as large organizations developed electronic data interchange and banks implemented electronic fund transfers.

• The internet itself was first a closed network established by the U.S. military for security communications.

• Today it has evolved into an open network accessed cheaply by people around the world.

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What kind of networks are used for e-business?

Basically• Small businesses can now climb on board the Internet,

which amounts to a free electronic highway.

• Once connected, you can buy, sell, and connect to people who matter to you quickly and cheaply.

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Functions of e-business

1. Communicate - e-mail

2. Promote

3. Buy and Sell

4. Economy – reduce cost of paper and postage

5. Research – product and company information

6. Effectiveness – fast and cheap

7. Mobility – work out of office and compete globally

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Is e-business secure?• Encryption software can scramble personal information. • Most credit card fraud occurs in traditional environments

where receipts are stolen.

• Bill C-6 will guarantee privacy by establishing principles governing the collection, use and disclosure of personal information.

• However, no business transaction is perfectly secure from potential fraud.

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What regulations apply to e-business?

• All existing laws that apply to traditional commerce apply equally in an electronic environment.

-business incorporation -business name registration -taxation-consumer protection-deceptive advertising-product safety-product standards

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How to shop on the Net

• Know the merchant you’re dealing with.• Look for detailed product/service information.• Read contract terms and conditions - print them.• Ensure the merchant has a secure transaction

system.• Check for quality assurances and guarantees.• Check for refund and complaint policies.• Be cautious against mass market e-mail.

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Avoid !• Any offer that sounds to good to be true.• Any site that asks for personal information prior

to disclosing the offer.• Promises a valuable prize in return for a cheap

purchase.• Any offers that pressure you to send money to

take advantage of a special deal.• Any loan offer that requires you to send money

to secure the loan.• Investment schemes.

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The Forgotten Costs

• Shipping costs• U.S. exchange rate• Duty• Provincial Taxes• Federal Taxes• Usually higher prices

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e-business Global Sales

1999 $ 195B Cdn

ROW2%

Europe19%

Asia12%

Canada5%

US62%

ROW3%

Europe33%

Asia21%

Canada4%

US39%

2004 $ 3.9T Cdn

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Statistics

• Canadians accessing the Internet

2003 64%2002 62%2001 60%1999 49%1998 37%1997 31%1996 23%

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More Statistics

• Canadian households making a purchase via the Internet

1999 5.5%

2000 9.6%

2001 12.7%

2002 15.7%

2003 18.6%

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Even More StatisticsCanadian Internet Sales by Industry

Manufacturing $900mRetail $610mInformation/Cultural $553mAccommodation/Food $430mScientific/Technical $406mFinance/Insurance $320mTransport Warehousing $164mWholesale $156mReal Estate $115mUtilities $16mMining/Oil/Gas $15mHealth Care $10m

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Retailers who have a web site with:

A product or service catalogue 61%

A customer on-line ordering system 32%

A credit-card payment system 27%

Personalization / Membership 22%

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What are consumers buying?

Books 70%Videos and CDs 63%Toys 48%Software 31%Entertainment 29%Apparel 27%Gift Certificates 21%

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The e-tailing Retreat

• Gone! holtrenfrew.com, lasenza.com, birks.com, suzyshier.com, pets.com, toysmart.com, garden.com and babygear.com

• “Stand Alone Pure Plays” e-tailers facing difficulty.

• Goal for “stand alones”? Survive, or look attractive to partners or acquirers in brick and mortar businesses.

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Problems facing e-tailers

• Technical glitches• Initial euphoria over• Prices tend to be more expensive• Shipping costs• Shipping delays• Too expensive to maintain site• Some products don’t fit well

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Future of e-business• Strong for products and services that

can be purchased over the Net. eg. software, banking, airline tickets

• Strong for catalogue retailers.

• For most retailers, the Internet is a information and marketing tool.

• People will always want to touch things before they buy.

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That’s all folks!