E-Commerce Strategies

Kelly Halbert

Verizon E-Business Group

December 2000

Definition: E-Commerce

Any business transaction that takes place via

digital processes over a network

History of E-Commerce

1969 ARPANET 1970s Bitnet and Usenet 1970s Electronic Funds Transfer 1980s EDI 1980s Business Commerce 1992 World Wide Web 2000 E-Commerce is Expanding Exponentially

Types of E-Commerce

Business-to-Business Business-to-Consumer

Why E-Commerce?

Everyone else is doing it Direct-to-Consumer On-line companies perceived as aggressive Customer Satisfaction

E-Commerce Forces

Customer Forces Technological Forces Economic Forces

Business Imperatives

Lower Costs Increased Revenues Increased Speed of Transactions Reduced Inventory Levels

Benefits of E-Commerce

Manage Supply and Value Chains Buy and Sell Products on the Internet Automates business transactions. Cuts customer service cost and improves the

quality of service.

E-Biz Model

Virtual Companies Automated Supply and Value Chains Internal Value Chain

B-B Supply Chain

Internal Value Chain

Infonomics

New World Economy Information

E-Commerce Obstacles

M oney Te ch n o lo gy P e o p le

O b s ta c les

How are Businesses using E-Commerce?

Product Catalogs and Online Buying Purchase Orders Logistics Control Customer Service Call Centers

Transactions and Functions

EDI – Electronic Data Interchange EFT – Electronic Funds Transfer Purchases Marketing Customer Service Inventory Intranet

Key Components of a Digital Nervous System

Hardware Software People Data Procedures

Hardware

Servers Routers Bridges Hubs Switches Gateways

Software

Web Server Software Transaction Server Software Browser Security

E-Commerce Architecture

Myths

Cheap, Easy, and Lucrative Everyone is Doing It Middlemen are Eliminated All Products become Commodities

Risk Management

Project Related Risks Technical Risks Business Risks

Risk Management Alternatives

What are our options and what do those options cost?

What is the risk of not doing something? Outsourcing vs. Insourcing Is the technology proven or new?

Top 10 E-Commerce Failure Risks

Project has unclear mission statement. Project does not have a clear business case. Project specifications are vague. Project is due to be delivered in one big chunk. Project team does not have the experience. Some team members are not committed. Project plan does not include time for holidays, vacations, sick days. Project plan includes no knowledge transfer plan for when consultants

leave. Project schedule was dictated by management without regard to the

amount of work required. Customer, partner, and management expectations are unrealistic.

Cost

Promotional Site = $300,000 Transactional Site = 1 to 3 Million The largest cost associated with e-commerce

is labor because of IT staffing shortage

Measuring Success

Customer Satisfaction Business Partner Satisfaction Number of New Customers Customer Attrition Product Availability

Brand ManagementMoving from Brick-and-Mortar to the Virtual World

Create a cyberbrand that attracts customer loyalty Customer loyalty in cyberspace is much lower than

in the real world Customer retention cost are much higher in

cyberspace Customer acquisition costs are lower in cyberspace

Internet Innovations

Portals – Yahoo! E-Tailing – Amazon Auctions – e-Bay Application Hosting – Application Service

Providers

Portals

Gateway to the Web Search Tool Links News Advertisers

External Service Providers

Internet Service Providers Web Hosting Providers Application Server Providers

Choosing a Partner

Trust Culture Reputation and Image Technology Financial Stability

Independent Software Vendors

ERP Vendors = SAP, Oracle, Peoplesoft Database Software Manufacturers = Oracle Web Software Co = iFront, Mercado Home Productivity = Intuit, Norton

Technical Standards

United Nations’ Electronic Data Interchange for Administration, Commerce, and Transport (UN/EDIFACT).

American National Standards Institute (ANSI)

Tax Issues

State Sales Tax Foreign Taxes

Legal Issues

Since cyberspace doesn’t really exist as a physical place, where should legal issues be resolved.

The electronic trail is not treated with the same respect as a paper trail.

Top 10 Benefits

Greater market share Reduces administrative cost Streamline business processes Improves relationship between business partners and

customers Equal market access for small and large businesses New ways to manage supply and value chains Seamless business operating environment Makes it possible to buy and sell on the Internet Automates business transactions Allows businesses to provide better customer service

Reference

Trepper, Charles, E-Commerce

Strategies, Microsoft Press, 2000.

Thanks

Special Thanks to Chris Jones

For His PowerPoint Assistance