the digital firm
TRANSCRIPT
c h a p t e r
44THE DIGITAL FIRM:THE DIGITAL FIRM:
ELECTRONIC COMMERCE ELECTRONIC COMMERCE & &
ELECTRONIC BUSINESSELECTRONIC BUSINESS
LEARNING OBJECTIVESLEARNING OBJECTIVES
• EXPLAIN HOW INTERNET EXPLAIN HOW INTERNET TRANSFORMS BUSINESSTRANSFORMS BUSINESS
• COMPARE CATEGORIES OF COMPARE CATEGORIES OF ELECTRONIC COMMERCEELECTRONIC COMMERCE
• EVALUATE PRINCIPAL EVALUATE PRINCIPAL ELECTRONIC PAYMENTELECTRONIC PAYMENT SYSTEMSSYSTEMS
**
LEARNING OBJECTIVESLEARNING OBJECTIVES
• DEMONSTRATE HOW INTERNET DEMONSTRATE HOW INTERNET TECHNOLOGY SUPPORTS TECHNOLOGY SUPPORTS ELECTRONIC BUSINESS, SUPPLY ELECTRONIC BUSINESS, SUPPLY CHAIN MANAGEMENTCHAIN MANAGEMENT
• EXAMINE CHALLENGES OF EXAMINE CHALLENGES OF INTERNET TO BUSINESSINTERNET TO BUSINESS
& SOCIETY & SOCIETY
**
MANAGEMENT CHALLENGESMANAGEMENT CHALLENGES
• EMERGING DIGITAL FIRMEMERGING DIGITAL FIRM
• ELECTRONIC COMMERCEELECTRONIC COMMERCE
• ELECTRONIC BUSINESSELECTRONIC BUSINESS
• CHALLENGES & OPPORTUNITIESCHALLENGES & OPPORTUNITIES
**
MANAGEMENT CHALLENGESMANAGEMENT CHALLENGES
1. ELECTRONIC COMMERCE & 1. ELECTRONIC COMMERCE & ELECTRONIC BUSINESS ELECTRONIC BUSINESS REQUIRE NEW MIND SETREQUIRE NEW MIND SET
2. FINDING SUCCESSFUL 2. FINDING SUCCESSFUL INTERNET BUSINESS MODELINTERNET BUSINESS MODEL
**
INTERNET TECHNOLOGY & INTERNET TECHNOLOGY & THE DIGITAL FIRMTHE DIGITAL FIRM
• INFORMATION TECHNOLOGY INFORMATION TECHNOLOGY INFRASTRUCTURE:INFRASTRUCTURE: Information flows Information flows seamlessly throughoutseamlessly throughout
• DIRECT COMMUNICATION BETWEEN DIRECT COMMUNICATION BETWEEN TRADING PARTNERS:TRADING PARTNERS: DISINTERMEDIATIONDISINTERMEDIATION removes removes intermediate layers streamlines processintermediate layers streamlines process
**
INTERNET TECHNOLOGY & INTERNET TECHNOLOGY & THE DIGITAL FIRMTHE DIGITAL FIRM
• VENDORS CAN PROVIDE VENDORS CAN PROVIDE INFORMATION 24 HOURS A DAYINFORMATION 24 HOURS A DAY
• CAN EXTEND DISTRIBUTION CAN EXTEND DISTRIBUTION CHANNELSCHANNELS
• CAN REDUCE TRANSACTION CAN REDUCE TRANSACTION COSTSCOSTS
**
INTERNET TECHNOLOGY & INTERNET TECHNOLOGY & THE DIGITAL FIRMTHE DIGITAL FIRM
• REDUCES REDUCES INFORMATION ASYMMETRYINFORMATION ASYMMETRY:: Asymmetry exists when one party has Asymmetry exists when one party has more information than othermore information than other
• INCREASES INCREASES RICHNESSRICHNESS:: Depth & detail Depth & detail of informationof information
• INCREASES INCREASES REACHREACH:: Number of people Number of people contactedcontacted
**
INTERNET BUSINESS MODELSINTERNET BUSINESS MODELS
• VIRTUAL STOREFRONT:VIRTUAL STOREFRONT: Sells goods, Sells goods, services on-lineservices on-line
• MARKETPLACE CONCENTRATOR:MARKETPLACE CONCENTRATOR: Concentrates information from Concentrates information from several providersseveral providers
• ON-LINE EXCHANGE:ON-LINE EXCHANGE: Bid-ask Bid-ask system, multiple buyers, sellerssystem, multiple buyers, sellers
**
• INFORMATION BROKER:INFORMATION BROKER: Provide info Provide info on products, pricing, etc.on products, pricing, etc.
• TRANSACTION BROKER:TRANSACTION BROKER: Buyers Buyers view rates, terms from various sourcesview rates, terms from various sources
• AUCTION:AUCTION: Electronic clearinghouse Electronic clearinghouse products, prices, change in response to products, prices, change in response to demand demand
**
INTERNET BUSINESS MODELSINTERNET BUSINESS MODELS
• REVERSE AUCTION:REVERSE AUCTION: Buyer sets Buyer sets price, submits to multiple sellersprice, submits to multiple sellers
• AGGREGATOR:AGGREGATOR: Group pools orders Group pools orders for volume discountfor volume discount
• DIGITAL PRODUCT DELIVERY:DIGITAL PRODUCT DELIVERY: Sell, download software, other Sell, download software, other digital productsdigital products
**
INTERNET BUSINESS MODELSINTERNET BUSINESS MODELS
• CONTENT PROVIDER:CONTENT PROVIDER: Creates revenue Creates revenue through providing client for a fee, and through providing client for a fee, and advertisingadvertising
• ON-LINE SERVICE PROVIDER:ON-LINE SERVICE PROVIDER: Provides Provides service, support for hardware, software service, support for hardware, software productsproducts
• VIRTUAL COMMUNITY:VIRTUAL COMMUNITY: Chat room, online Chat room, online meeting placemeeting place
**
INTERNET BUSINESS MODELSINTERNET BUSINESS MODELS
• PORTAL:PORTAL: Initial point of entry to Initial point of entry to Web, specialized content, servicesWeb, specialized content, services
• SYNDICATOR:SYNDICATOR: Aggregate Aggregate information from several sources information from several sources sold to other companiessold to other companies
**
INTERNET BUSINESS MODELSINTERNET BUSINESS MODELS
ELECTRONIC COMMERCEELECTRONIC COMMERCE
• BUSINESS-TO-CONSUMER BUSINESS-TO-CONSUMER (B2C)(B2C)
• BUSINESS-TO-BUSINESS BUSINESS-TO-BUSINESS (B2B)(B2B)
• CONSUMER-TO-CONSUMERCONSUMER-TO-CONSUMER (C2C): (C2C): Individuals use Web for private sales Individuals use Web for private sales or exchangeor exchange
**
BUSINESS-TO-CONSUMERBUSINESS-TO-CONSUMER
• WEB SITES:WEB SITES: Provide information on Provide information on products, services, prices, ordersproducts, services, prices, orders
• CUSTOMER-CENTERED RETAILING:CUSTOMER-CENTERED RETAILING: Closer, yet more cost-effective Closer, yet more cost-effective relationship with customersrelationship with customers
• INFORMATION BROKERS:INFORMATION BROKERS: Comparison Comparison shops to customer’s requirements, shops to customer’s requirements, reintermediationreintermediation
**
BUSINESS-TO-BUSINESS BUSINESS-TO-BUSINESS ELECTRONIC COMMERCEELECTRONIC COMMERCE
AUTOMATION OF PURCHASE, SALE AUTOMATION OF PURCHASE, SALE TRANSACTIONS FROM BUSINESS TO TRANSACTIONS FROM BUSINESS TO BUSINESSBUSINESS
• PROVIDES ALTERNATIVE SOURCESPROVIDES ALTERNATIVE SOURCES• ELECTRONIC HUBS:ELECTRONIC HUBS: Online Online
marketplaces, point-to-point marketplaces, point-to-point connections, integrated informationconnections, integrated information
**
BUSINESS-TO-BUSINESS BUSINESS-TO-BUSINESS ELECTRONIC COMMERCEELECTRONIC COMMERCE
EXCHANGES:EXCHANGES: Commercial on-line Commercial on-line market, many buyers, sellersmarket, many buyers, sellers
• POTENTIAL FOR INTEGRATING POTENTIAL FOR INTEGRATING PRODUCT INFORMATIONPRODUCT INFORMATION
• PROVIDES SERVICE, VALUEPROVIDES SERVICE, VALUE
**
ELECTRONIC COMMERCE PAYMENT SYSTEMSELECTRONIC COMMERCE PAYMENT SYSTEMS
SYSTEM DESCRIPTION
CREDIT CARDS SECURE SITE PRESERVES INFORMATION
ELECTRONIC CASH DIGITAL CURRENCY USED FOR MICROPAYMENTS
PERSON-TO-PERSON SEND MONEY TO SITES UNABLE TO USE CREDIT CARDS
DIGITAL WALLET SOFTWARE STORES CREDIT CARD INFORMATION
ELECTRONIC CHECK CHECK WITH ENCRIPTED DIGITAL SIGNATURE
SMART CARD MICROCHIP STORES ELECTRONIC CASH
ELECTRONIC BILL PAYMENT ELECTRONIC FUNDS TRANSFER
INTRANETS AND INTRANETS AND ELECTRONIC BUSINESSELECTRONIC BUSINESS
• BENEFITSBENEFITS
• FUNCTIONAL APPLICATIONSFUNCTIONAL APPLICATIONS
• SUPPLY CHAIN MANAGEMENTSUPPLY CHAIN MANAGEMENT
**
BENEFITS OF INTRANETS:BENEFITS OF INTRANETS:
• CONNECTIVITYCONNECTIVITY
• CAN BE TIED TO LEGACY SYSTEM & CAN BE TIED TO LEGACY SYSTEM & TRANSACTION PROCESSINGTRANSACTION PROCESSING
• INTERACTIVE APPLICATIONS INTERACTIVE APPLICATIONS WITH TEXT, AUDIO, VIDEOWITH TEXT, AUDIO, VIDEO
• SCALABLE TO LARGER OR SCALABLE TO LARGER OR SMALLER SYSTEMS AS REQUIREDSMALLER SYSTEMS AS REQUIRED
**
BENEFITS OF INTRANETS:BENEFITS OF INTRANETS:
• EASY TO USE BROWSER INTERFACEEASY TO USE BROWSER INTERFACE
• LOW START-UP COSTSLOW START-UP COSTS
• RICH, RESPONSIVE INFORMATION RICH, RESPONSIVE INFORMATION ENVIRONMENTENVIRONMENT
• REDUCED INFORMATION REDUCED INFORMATION DISTRIBUTION COSTSDISTRIBUTION COSTS
**
FUNCTIONAL APPLICATIONS:FUNCTIONAL APPLICATIONS:
• FINANCE & ACCOUNTINGFINANCE & ACCOUNTING
• HUMAN RESOURCESHUMAN RESOURCES
• SALES & MARKETINGSALES & MARKETING
• MANUFACTURING & PRODUCTIONMANUFACTURING & PRODUCTION
**
FINANCE & ACCOUNTING:FINANCE & ACCOUNTING:
• GENERAL LEDGER REPORTINGGENERAL LEDGER REPORTING
• PROJECT COSTINGPROJECT COSTING
• ANNUAL REPORTSANNUAL REPORTS
• BUDGETINGBUDGETING
**
HUMAN RESOURCES:HUMAN RESOURCES:
• CORPORATE POLICIESCORPORATE POLICIES
• EMPLOYEE SAVINGS PLANSEMPLOYEE SAVINGS PLANS
• BENEFITS ENROLLMENTBENEFITS ENROLLMENT
• ON-LINE TRAININGON-LINE TRAINING
• JOB POSTINGJOB POSTING
**
SALES & MARKETING:SALES & MARKETING:
• COMPETITOR ANALYSISCOMPETITOR ANALYSIS
• PRICE UPDATESPRICE UPDATES
• PROMOTIONAL CAMPAIGNSPROMOTIONAL CAMPAIGNS
• SALES PRESENTATIONSSALES PRESENTATIONS
• SALES CONTRACTSSALES CONTRACTS
**
MANUFACTURING & PRODUCTIONMANUFACTURING & PRODUCTION::
• QUALITY MEASUREMENTSQUALITY MEASUREMENTS
• MAINTENANCE SCHEDULESMAINTENANCE SCHEDULES
• DESIGN SPECIFICATIONSDESIGN SPECIFICATIONS
• MACHINE OUTPUTMACHINE OUTPUT
• ORDER TRACKINGORDER TRACKING
**
SHIPPINGSHIPPING INVENTORYINVENTORY
PLANNING & PLANNING & FORECASTINGFORECASTING
ORDER ORDER PROCESSINGPROCESSING
PRODUCTIONPRODUCTION
PROCUREMENTPROCUREMENT
ACCOUNTINGACCOUNTING
SUPPLIERSSUPPLIERSCUSTOMERSCUSTOMERS
LOGISTICS LOGISTICS SERVICESSERVICES
DISTRIBUTORSDISTRIBUTORS
INTRANETINTRANETINTRANET
SUPPLY-CHAIN MANAGEMENTSUPPLY-CHAIN MANAGEMENT
CHALLENGES & OPPORTUNITIESCHALLENGES & OPPORTUNITIES
• UNPROVEN BUSINESS MODELSUNPROVEN BUSINESS MODELS
• BUSINESS PROCESS CHANGE BUSINESS PROCESS CHANGE REQUIREMENTSREQUIREMENTS
• CHANNEL CONFLICTSCHANNEL CONFLICTS
• LEGAL ISSUESLEGAL ISSUES
• SECURITY & PRIVACYSECURITY & PRIVACY
**
c h a p t e r
44THE DIGITAL FIRM:THE DIGITAL FIRM:
ELECTRONIC COMMERCE ELECTRONIC COMMERCE & &
ELECTRONIC BUSINESSELECTRONIC BUSINESS