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 Doing Business in the Digital
Economy
‡ The O

 

 is an economy based on digital
technologies.
‡ Also called the c
 
  the    or
the
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‡ Digital infrastructures provide a



 over
which people and organizations interact communicate
collaborate and search for information.
‡ The digital revolution accelerates EC (electronic
Commerce) by providing competitive advantage to
organizations and enabling innovations
 cnternet Economy Driving Forces
‡ Changing customer demands
‡ Globalization
‡ cnternet ubiquity
‡ New technology
‡ New marketplace and intermediacies
Defining e-Business
A broader definition of EC that
includes not just the buying and
selling of goods and services but
also servicing customers
collaborating with business
partners and conducting
electronic transactions within an
organization
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The online exchange of goods services
and money among firms and between
firms and their customers
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cnformation
Dissemination
Transaction
cntegration
Support

Jorld Jide Jeb

Collaboration cnteractive
Communication
Mass
Customization
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‡ A relatively economical mechanism to disseminate
information globally to compete in new markets 24/7
‡   Electronic company brochures
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‡ Jeb technologies allow Jebsites to integrate with
corporate database to provide real-time information
‡   checking bank balances

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‡ The ability to tailor products and services to meet a
customers particular needs
‡  : Configuring a PC online
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‡ Build customer loyalty by providing immediate feedback
to/and from the customer demonstrating responsiveness
‡   Customer support through email and chat






‡ A mechanism allowing users to interact share and
store information and tools for specific purposes
‡   Product R&D site with tools storage etc.

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‡ Provides way for buyers and sellers to conduct
business online without human assistance
‡   Buy a book online
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‡ Removal of the intermediary (middleman) in a sale.
‡ Companies can sell directly to customers (retail or
wholesale) without assistance using the cnternet


  

 
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    (Middleman) or

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Sell Direct - Disintermediation


‡ Airlines selling directly to flyers without a travel
agent or customer service representative
  

 
  
  



  


 come in one of the following
three types. All require a sound business models to
be successful
  
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‡ Operate a firm solely in traditional physical
markets
‡ Approach business activities traditionally
by operating physical locations (e.g.
stores offices manufacturing plants)
 
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‡ Operate a firm in physical locations and has
added an EC component to their business
‡ Requires maximization of business
opportunities in both the physical and virtual
environments
‡ This strategy requires a significant investment
in systems and space
  



‡ Business transactions are only conducted
virtually
‡ Can require significant expertise and
investment in technology and systems staff
‡ There are many different revenue models
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‡ 

 enable
two or more firms to
use the cnternet to
do business together
‡ They are an
excellent use of "
to allow companies
to achieve a positive
return on their tech
investments
  

 
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‡ The
 
 of electronic business 
 between
business 
  (e.g. purchase order)
‡ Typically used by large organizations«     
‡ The internet has opened this technology to   
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‡ EDc transactions are  

 
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and then transmitted to the receiver by a 
‡ % OO O
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& providers are private
network operators that provide guaranteed delivery

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‡ Document types and formats are universally standardized
‡ Two standards exist: ANSc X.12 and UN/EDcFACT
 

 
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‡ Extranets are   networks that provide customers
suppliers and employees with access to 
 systems
‡ Have replaced c for    allowing them to
participate in "
 directly



  

‡ cmproves
    and  of communications
reducing 
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‡ Allows  
 management of O
 
 allowing single
updates which are then   to all interested parties
‡ Uses standard web 



 allowing disparate computing
platforms to 
 
without additional investments
‡ Easy to use requires little training
‡ Used to 


transactions reducing cost and cycle time
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Supply Chain
Management
Procurement Real-Time
Portals cnfo Access

Exchanges

Distribution
Collaboration
Portals
Enterprise
Portals
 

 



  
 

‡ Used to 
supply and manufacturing



between 

  and  
‡ The extranet contains features allowing participants to

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‡ Allowing business 
 and 

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‡ This  O  customer service  O by giving all


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‡ Allows companies to respond proactively to marketplace
changes by working directly with suppliers and customers
‡ Allows for 

 development   
 
‡ Allows for 

 

 of the  



turning buyers into supplier relationship managers


  


‡ These are  

 (front doors) combined from

  

 where business partners access
secured 


company 



‡ This provides a  
 


  for information
that comes from a 

of disparate 


‡ Benefits include 
  for business partners
 O O maintenance 

by reduction in total extranets


 



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‡ Allow 

 and 
   to come together
‡ Offer transaction processing industry information best
sourcing info resources and invoicing (e.g. SciQuest.com)
‡ '    made through advertising and transaction fees
 
 



 
  



‡ Designed to automate the
business processes that
occur before during and
after a sales transaction
between a   and
 and
‡ Designed to automate the
business processes that
occur before during and
after a sales transaction
between a 

 
 
  
‡ Portal can be customized ‡ Provides supplier

 to
and  
  O by the update products process
buyer or seller orders service buyers (e.g.
(e.g. Premier.Dell.com) Ford Supplier Portal)
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‡ Used for tagging and tracking physical items
‡ RFcD system uses a
   and 
 to transfer



 to a processing device or '(c


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‡ RFcD is more powerful than bar-code technology because
it does not require visual line-of-sight reading
‡ RFcD

 can be placed  $  (e.g. clothes pets
cars parts store items etc.)
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‡ Deployment is growing rapidly but it is still expensive
‡ There are no clear set of data standards
‡ Global radio frequencies differ between countries
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‡ An 
  
network using Jeb technologies to
   transmit information with the organization.
‡ This  
internal Jeb  
 viewing   to
authorized users within the organization

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‡ cmproved information access to authorized user
‡ cmproved timeliness and accuracy of information
‡ Global reach allowing employees access from anywhere
‡ Cross-platform integration
‡ Low cost deployment
‡ Positive return on investment
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Collaboration Training

cntranet Hub

Online Entry of Application

cnformation cntegration

Real-time Access
To cnformation
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‡ Provides
    to a host of
  



including course catalogs registration content (video
slides other materials) and evaluation
‡ Provides significant    in 
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and

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‡ Allows for 



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from disparate systems into a  
 


 
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‡ Allows employees access to real-time system information.
‡ This  O  

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‡ Allows for O  
online 
to 
   routine
business 
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‡ Provides for significant 

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 from reducing
administrative 

and shifting  
 
functions back to the 
(e.g. updating 401K
selections)






‡ Allows employees to 
 
business 


across


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‡ Allows for 

 development   
 
‡ Allows employees to stay abreast of current projects
corporate and market conditions
   


 
 

 
 
Online retailing or

  
provides many
consumer O

 over
 O

 business



 but there are also
drawbacks
  


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w
  unlimited choices are available
w  commerce can be conducted from anywhere
w   lower prices driven by higher turns/lower costs
  


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  the time lag between the time of purchase and receipt
w   lacks sensory experience of touch smell etc.

   online shopping lacks the social interaction of malls
 


  



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Jeb sites that Jeb sites that are Jeb sites that
globally integrated with allow customers
disseminate only corporate to enter orders
static information databases to and make
about the extract and payments
company and its display the directly online
products appropriate (e.g. buying a
available 24/7. information for a book)
(e.g. Electronic customer request.
Brochure) (e.g. displaying a
bank balance)
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Providing visitors with something they can find nowhere else
leads to success. Hard to find goods are popular on the Jeb

' "!  

  

   

Successful firms have Jeb sites that are nice to look at. People
are more likely to visit stay at and return to a site that looks
good

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Users are less likely to stay at or return to a site if they have
trouble finding things navigating the links or have to wait for
screens
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People use web sites that provide useful information and links
or free goods and services

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Companies must draw or pull visitors to their website by: 1)
publish address on company materials; 2) register with a
search engine; advertise on other commerce sites e.g. Yahoo
(very expensive)

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A firm can track the path that user take though the site and
information about date time etc. and use this information to
improve the site
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irtual Sells physical goods or services online. Amazon.com
Storefront Virtual
Vineyards

cnformation Provide product pricing and availability information. travelocity

Brokers Some facilitate transaction.

Transaction Buyers can view rates and returns but the primary E*trade
Brokers business activity in to complete the transaction. Ameritrade

Electronic Provide auction-like settings for products where price Auction.metaljun

clearinghouses and availability are constantly changing sometimes in ction.com
response to customer actions.
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Reverse Consumers submit a bid to multiple sellers to Priceline.com
Auction buy good and services at a buyer-specified
price.
Digital Sell and deliver software multimedia and Build-a-card Photodisc
product other digital products over the internet Sonicnet
delivery
Content Created revenue by providing content the Jall Street Journal
provider customer may pay to access the content or interactive quote.com tripod
revenue may be generated by selling
advertising space or by having advertisers
pay for placement in an organized listing in a
searchable database
On-line Provide service and support for hardware and Cyber Media
service software users.
provider


   
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Benefits to Organizations
‡ Global Reach ‡ Lower Communication
‡ Cost Reduction Costs
‡ Supply Chain ‡ Efficient Procurement
cmprovements ‡ cmproved Customer
‡ Extended Hours Relations
‡ Customization ‡ Up-to-Date Company
Material
‡ New Business Models
‡ Vendors¶ Specialization
‡ Rapid Time-to-Market
   


Benefits to Consumers
‡ Ubiquity ‡ cnstant Delivery
‡ More Products and ‡ cnformation Availability
Services ‡ Participation in Auctions
‡ Customized Products ‡ Electronic Communities
and Services
‡ Cheaper Products and
Services
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‡ Unproved business models
‡ Channel Conflicts
‡ Technology Hurdles
‡ Legal cssues
‡ Security and Privacy
   

   




‡ CRM
‡ ERP
‡ SCM
‡ KM
‡ e-Markets
   ' )   

‡ cdentify/measure quantifiable business
objectives
‡ Ensure organisational/operational flexibility
‡ Rethink entire company supply chains
‡ Transform the company to a process-
centric one
‡ Define business processes
‡ Understand security requirements
   ' )   

‡ Align business organizations with a flexible
cT architecture
‡ Establish standards
    



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‡ E-Auctioning
‡ E-Banking
‡ E-Commerce
‡ E-Directories
‡ E-Engineering
‡ E-Gambling
‡ E-Learning
‡ E-Mailing
‡ E-Marketing
‡ E-Operational Resources Management
‡ E-Supply
‡ E-Trading