is 425 enterprise information lecture 6 summer i 2005-2006
Post on 22-Dec-2015
219 views
TRANSCRIPT
IS 425
Enterprise Information LECTURE 6
Summer I 2005-2006
IS425 Winter 2005-2006 Session 6 2
Agenda
Exercise Debate E-Commerce and E-Business Systems Next Week : Quiz/homework #3
IS425 Winter 2005-2006 Session 6 3
Exercise You are the IT steering committee that will decide which hospital
project to fund.
From last weeks readings and lecture detail the steps that you would take in determining which hospital project to do.
Based on the previous session readings and lecture:
1. What two questions would you ask to find out which one should be implemented?
2. How would you use the prioritization tiers decision tree?
3. How would you use the prioritizing potential benefit tree?
4. What is the major problem with lagging indicators when developing new software?
IS425 Winter 2005-2006 Session 6 4
Debate
How should team tasks be divided? Debater Research Report writing Arguments
IS425 Winter 2005-2006 Session 6 5
Growth of the Internet
Dot com bust begins
IS425 Winter 2005-2006 Session 6 6
eCommerce Will Penetrate Business and Consumer Markets
IS425 Winter 2005-2006 Session 6 7
Types of E-Commerce
Business-to-Consumer (B2C): Internet Purchasing, knowledge, entertainment, other
Intra-Organizational: Intranets (B2E) Business intelligence, enterprise portal, workgroup
communications, corporate digital library, sales force productivity, workflow, datawarehousing
Business-to-Business (B2B): Extranets Supply chain management, Customer relationship
Mgt; exchange
Consumer-to-Consumer (C2C) Peer-to-Peer
IS425 Winter 2005-2006 Session 6 8
US eCommerce: The First Five Years
1997 to 2002: explosive growth Spurred by consumers and VC support for dot-come and
traditional retailer, a raging economy Online shopping households grew from 5m to 36.5m;
online sales from $2.4b to 72.1b Consumers continued shopping online for convenience,
selection, and deals, especially travel, consumer electronics, and PCs
CAGR of 97%
Source: Forrester Research
IS425 Winter 2005-2006 Session 6 9
US eCommerce: The Next Five Years
2002 to 2007: consistent, rapid growth By 2007, households shopping online will
increase by 26.4 m and grow to 63m, or 2/3 of all US households
Sales will grow from $72.1b in 2002 to $217.8b in 2007
CAGR of 25%; 8% of total retail sales
Source: Forrester Research
IS425 Winter 2005-2006 Session 6 10
The e-Commerce Value Chain
Attract Act React Interact
Get and keepcustomer interest
Turn interest into orders
Manage orders Service customers
AdvertisingMarketing
channelsmedia
CatalogSales
staticdynamic
Order capturePaymentFulfillment
goods
Customer serviceOrder tracking
IS425 Winter 2005-2006 Session 6 11
React
Act
Attract
Interact
The e-Commerce Value Cycle
IS425 Winter 2005-2006 Session 6 12
Attract Customers (Marketing)
Purpose Build brand awareness, attract customers, and entice
them to buy Merchandizing Methods
Advertising Coupons Sales and Promotions Frequent buyer programs 1:1 marketing
IS425 Winter 2005-2006 Session 6 13
Interact with Customers (Sales)
Purpose Turn interest into orders Catalog, Product and Service
Techniques Registration with Internet search engines Hyperlinks Onsite product search Product and price comparison Dynamic vs. static contents Pricing
IS425 Winter 2005-2006 Session 6 14
Act on Customer Instructions (Order Management)
Purpose: Manage order and shopping experience Order Processing:
Shopping cart and order aggregation Order validation; Application of coupons or discounts Cross selling Calculation of sales, taxes, shipping and delivery charges, rolled-up
order Payment: handle multiple payment methods (cash, credit,
credit cards, debit cards) Act – Fulfillment
Delivering the goods ordered to their destination Transmission of order information to warehouse, packing or
order assembly for shipping, shipping and delivery
IS425 Winter 2005-2006 Session 6 15
React to Inquiries (Service) Purpose: customer satisfaction, experience, and
repeat visits Methods
24X7 service capacity Proactive and Immediate feedback – voice and
email Access to status information Self-help (FAQ) Multi-language support
IS425 Winter 2005-2006 Session 6 16
Value Proposition for Customers Transform customer relationship from supplier-
centered to customer-centered values self service, 1:1; choices; delivery to customer location;
customer needs; choice of service hours
Displace traditional source of values Physical vs. digital value (information) Economies of scale vs economy of scope Mass produced vs mass customized Information vs. knowledge value Distribution as constraints vs. enabler Local vs. global
IS425 Winter 2005-2006 Session 6 17
Value Proposition for Firms
Ability to reach a global market Reduced marketing and selling expense Increased efficiency of operation Ability to target consumers more precisely Ability to convey more accurate product and
availability information
IS425 Winter 2005-2006 Session 6 18
B2C Business Models: Generating Revenues
Merchant Model virtual merchants Click & Brick Multi-Channel Shopping Malls
Advertising Model Horizontal portal Vertical portal Personalized portal
Intermediary (Brokerage) Buy/sell fulfillment Buyer/demand
aggregator Virtual mall Hypermediary (financial
settlement) Auction broker Reverse auction
IS425 Winter 2005-2006 Session 6 19
B2B E-Commerce
Global B2B revenues to grow from $282 billion in 2000, to $4.3 trillion by 2005, the bulk of B2B transactions will be made in the US.
Compound annual growth rate (CAGR) of 73% in US, 91% in Europe, and 109% in Asia
lower costs, shorter cycle time, quicker response, and global markets
IS425 Winter 2005-2006 Session 6 20
B2B Models
Firm-based Models Sell-side (1-to-many), Cisco Buy-side (many-to-1) , GE
Many-to-Many Marketplaces – Exchange and catalog models
Vertical vs. Horizontal Marketplaces Virtual Service Industries in B2B
Travel, Real estate, electronic payments, online financing and online trading, Logistics
IS425 Winter 2005-2006 Session 6 21
Sell Side: 1:Meg. Cisco
Buy Side: M:1e.g., GE
Public or Private Marketplaces M:MCatalogs (Newark in One) Exchanges, Houstonstreet
Buyers Sellers/suppliers
Sellerssuppliers
Buyers
IS425 Winter 2005-2006 Session 6 22
Firm-based modelSell side B2B: One to Many
Delivers a Web-based, private-trading sales channel over an extranet to business customers
The seller can be a manufacturer, or a distributor Architecture similar to B2C Similar technology Sell by electronic catalogues, auction, or by contract Differences in commerce value chain
IS425 Winter 2005-2006 Session 6 23
Firm-based Model: Direct sale form Catalogue
Benefits Reduced order processing
costs Speeds the ordering cycle Reduce errors in ordering and
product configuration Reduced buyers’ search costs Customize products Different prices to different
customers (personalization, customization)
Improve service levels for low-volume customers
Provide higher-quality information for customers
Limitations Channel conflicts with
existing distribution systems
EDI (if used) is costly and could limit the participation
IS425 Winter 2005-2006 Session 6 24
B2B Value Proposition
Reduced cost of selling Reduced order processing costs Improved service levels for low-volume
customers Higher quality information for customers Accurate information
IS425 Winter 2005-2006 Session 6 25
B2B Commerce Value Chain--different from B2C
Attract: Advertising & Marketing merchandising and
branding become a p referred vendor
Interact: Catalogs Searching capability for
large electronic catalog Customized catalogs --
special part number and pricing
Security Requirements
Act: Order Processing Approval & Workflow Delegation
Act: Payment Purchase Order,
Procurement Cards, EFT Act: Fulfillment
Predefined ship-to address and order aggregation
React: Customer Service Training, Software
maintenance, tech support
IS425 Winter 2005-2006 Session 6 26
Firm-Based Model: Buy-Side: Many to one, E-Procurement
Two types of purchases (what are purchased) Direct materials: production materials go directly
to the manufacture or assembly of a product or the creation of a service. Their use is scheduled, purchased in volume at pre-negotiated price
Indirect materials: used in maintenance, repairs, and operations (MRO), nonproduction materials
IS425 Winter 2005-2006 Session 6 27
Traditional EDI vs. Internet Enabled EDI (VAI)
Standardized transfer of electronic documentation (Two Standards: ANSI x.12 vs. EDIFACT)
Manage supply and distribution relationships; application or transaction based; emphasize efficiency (purchase orders and invoices)
Limitations: Costly; Proprietary VANs Participation sometimes through coercion and pressure Compatibility issue limited impact on process change
VAI: Common standards; Flat pricing; Security Easy/cheap access; Infrastructure
IS425 Winter 2005-2006 Session 6 28
Why XML is Successful
XML is a text format, can be processed by text-oriented tools
Extensible to specific an industry or domain Neutral, an open source tool Easy to implement Interoperable across different platforms
IS425 Winter 2005-2006 Session 6 29
XML and B2B Improve compatibility between disparate systems Allows parties to exchange structured data over the
Internet. XML tags define the meaning of data (catalogue) and business processes
XML also supports Unicode that enables the display and exchange of most of the world's written languages.
Benefits: Reduce costs, competitive advantage, strengthen relationships with trading partners (processes)
Simplifies application architecture—a uniform framework
IS425 Winter 2005-2006 Session 6 30
Internal and External Process Enablement
IS425 Winter 2005-2006 Session 6 31
E-Commerce Application Building Blocks
IS425 Winter 2005-2006 Session 6 32
Sell-Side E-Commerce Systems
IS425 Winter 2005-2006 Session 6 33
Examples of e-Commerce Web Site Engineering
http://condor.depaul.edu/~schan/455home/ECTgallery.htm
IS425 Winter 2005-2006 Session 6 34
Question: EDI is electronic data interchange –
Uses traditional record format to record transactions between firms
Has standards the X.25 for example Has been around since 1970’s Used to transmit transactions between
suppliers/customers Expensive to implement and maintain
Will XML / Web Services take over from EDI?