Ebiz - Batch 3 Handout

(IS3167) MANAGEMENT AND INNOVATION OF E-BUSINESS (2012 Academic Year)
MR JACK KOH
BATCH 3
8/15/2012
Management & Innovation of E-Business

(IS3167, 2790167 ) Slides (Set-3)
(Lectures 13 to 21)
e-BUSINESS is built on two main infrastructures namely the economic infrastructure and the technology infrastructure. Lectures 13/14 present the economic infrastructure represented by the transaction cost theory.
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Lect13/14: EBIZ - Mgt & Innovation eBusiness(by JackKoh)
In transaction cost theory (TCM), we are largely interested in the cost of transacting rather than the transaction itself.
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A transaction (or exchange) is defined as the transfer of property rights comprising of UAIT properties from the seller to the buyer
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Transaction costs (Ronald Coase, 1937) can be viewed as the economic equivalent of friction in physical systems: the greater the friction in the physical system, the more impeded the movement (exchange of goods & services); by the same token, the higher the transaction costs.
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TRUST exists
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Transacting Mistrust
parties will optimize .
exists in the forms of
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During the transaction life cycle (TLC): Search stage Contract stage Control stage

(Various frictions exist in these stages)
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Search stage: frictions of uncertainty and bounded rationality (no opportunistic cost here) involved externalities.
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Contract stage: frictions of uncertainty, bounded rationality, opportunistic behaviour, asset specificity, and small numbers. Cost of bargaining, finding the right price/qty/quality, due diligence of vendors , the writing, finalising of contract terms are majors activities here.
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Control (aka regulation) stage: frictions of uncertainty, bounded rationality, opportunistic behaviour, small numbers, asset specificity. Activities include the execution and monitoring of the contract terms.
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Turn
to Notes, page 100 the stages for the 2 screen-
Discuss
dumps
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How is ICT a mediating technology and an intermediary?
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In the transaction cost model, ICT is seen as a factor that can decrease the costs of transacting, thus improving the functioning of the market. The logic behind this argument is that the lower the transaction costs, the more efficient the market will be.
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reduce
transaction costs by eliminating the need for intermediaries changes the role of intermediaries in matching supply and demand. reduce search costs, contracting cost, control and regulation costs through facilitating the exchange of information between economic agents
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Intermediation, disintermediation, and reintermediation (another form of new intermediary). I am so confused regarding how it leads to reducing transaction costs. I understand that e-business/e-commerce facilitates disintermediation....then you have the transaction brokers which are intermediary brokers (i thought ecommerce facilitates DISintermediation?) , and they aid in reducing transaction costs....then there is the search engines which are intermediaries that support in lowering of TC, and then (mentioned by Dr Antonio), ITunes are facilitating disintermediation.....
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also known as information brokers Infomediary is an agent who works with the customer to capture profiles about the customers, helps them to manage those profiles and maximize their value and helps the customer to protect that information from access by vendors. two types of infomediaries

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increase information processing costs owing to information overload? Hence, infomediaries become relevant and useful. global connectivity and availability leads to a high tendency to look beyond local sources thus increasing complexity leading to higher search, contracting, control cost
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Is
a compact set of concepts and a unifying language to analyse and interpret a variety of micro and macro phenomena, such as vertical integration between firms, employment contracts
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based on a sophisticated but still narrow view of the agent as economic man, who maximises utility despite the limits of their rationality. a static, comparative view of why different economic institutions exist, develop or decay.
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End of Lectures 13-14
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Identify examples of infomediaries that you regularly use or have come across do not just copy the ones listed by Chaffey (2011). What roles do these infomediaries play? How important are those roles to e-business? Consider the impact of online grocery shopping on the value chain. Does it disintermediate? Or has it brought forth new intermediaries (or infomediaries)? Identify examples of where ICT does not disintermediate the value chain. Why is this so? In the context of a B2B transaction, what are the main classes of information processing costs? Give specific examples of each of these costs, using the example of a shop buying Christmas trees from a supplier. When, and how, might they be incurred in this case?
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5. 6.
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How can transaction cost theory explain disintermediation and infomediation? Outline the myths that circulated during the dot.com boom. Which of these do you believe were completely unfounded, and could never become a reality? Consider this problem: if coordination costs encompass both transaction costs and information processing costs, could information technology raise coordination costs despite reducing the transaction costs? Discuss in detail how this might occur, justifying your answer with examples. It has often been argued that information and communications technology (ICT) is disintermediating electronic marketplaces Infomediaries are however increasing in electronic markets. Discus with examples.(SG Exam sample)
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9.
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Transaction costs can be described as frictions in the market. How can ICT (information and communications technology) reduce these frictions? Discuss the theoretical model of transaction costs and explain how and why ICT can reduce or increase transaction costs. (2011) Describe the phases of the transaction lifecycle. Critically analyse, using examples, how ICT can reduce the transaction costs associated to ONE of these phases.(2012 prelim)
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e-BUSINESS is built on two main infrastructures namely the economic infrastructure and the technology infrastructure. Lecture 16 present the technology infrastructure represented by Web 2.0 & ICT technology
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Web 2.0 is a concept that takes the network as a platform for information sharing, interoperability, user-centered design, and collaboration on the World Wide Web. A Web 2.0 site allows users to interact and collaborate with each other in a social media dialogue as creators and prosumers of user-generated content in a virtual community, in contrast to websites where users are limited to the passive viewing of content that was created for them.
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Google AdSense Flickr BitTorrent Napster Wikipedia blogging search engine optimization cost per click wikis tagging ("folksonomy") syndication
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treat Network platform as residing externally to users PC major shift from passive consumption to active participation by users facilitate business harnessing of collective intelligence of users active participation by users also means the collected data is constantly be reviewed and updated improved software tools and cloud computing facilitate same apps execution on many various devices.
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5.
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Provides an important form of social marketing Embraces social communities is the next step of information revolution
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Promote
collaboration Promote participation How are these achieved?
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Some Pros are free flow of information, communication at minimal cost, content has no expiry dates Some Cons are information leakage , loss of employee productivity, high level of dependency of the Internet
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Lecture is to provide you with a brief introduction to the information and communications technology (ICT) underlying e-business careful not to become obsessed or blinded by technological detail. Only key concepts expected in this course !
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Open up exciting opportunities for communication, collaboration and markets. Various types of networks: LANs, WANs, intranets, extranets. Why firewall?
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WWW not = the Internet WWW = web browser = URL = HTTP = Web1.0 or Web2.0 Facilitates the devt of client-server network and P2P network

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Designed as peer2peer network architecture seen as an external network platform of the local machine. Involves delivering hosted services over the Internet Three types : Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS)and Software-as-aService (SaaS).
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todays mobile phones are effectively operate like network computers Mobile phone mobile commerce (MCommerce) Type of applications Limitations
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extranets are used to coordinate and manage supply chains with firewalls EDI RFID automatic identification of stock items Enterprise Information system (ERP) Ebusiness security Cloud?
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Purposes of securing data transmission Cryptography TLS and SSL protocols

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End of Lecture 16a & 16b
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New technologies facilitate the reorganisation of work and offer new opportunities in terms of where, when and how work is carried out. How do these new forms of organisation impact internal organisational structures as well as relationships between firms?
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With many innovative, advanced electronic technology over the last 2 decades, people work have changed dramatically, but the way their companies are organised lags far behind.
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Outsourcing/Externalization Partnership Core competency Efficient/smart technology like global networks, mobile phone, video conferencing, computers, cloud computing, social networks, Reliable professional services Open source Crowd sourcing
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..current traditional organisational forms would not suffice (although relevant)
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Researchers and practitioners faced with the problems of organisational structure saw the potential of IT, and later e-business, to improve coordination and provide opportunities for new organisational forms. NOFS are often ambiguous, in that some people may not be fulltime members, and they are typically fluid, in that people join and leave as requirements change.
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NOFS are typified by dynamic cross-functional teams of experts set up to solve a particular problem NOFS also stretch outside the focal organisation to encompass external relationships move to the middle where organisations construct structures that are between markets and hierarchies
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1. 2. 3. 4. 5. 6.
Virtual Organisation Virtual teams and off-shoring Teleworking Mobile working Open source Crowd sourcing
E-business offers a significant opportunity for change in both social and organisational structures, in particular regarding how and where work is done and organised.
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technological inflexibility and dependence inter-organisational relationship problems ambiguity Psychological aspects Unclear lines of authority Managerial implications Data / confidential insecurity
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End of Lecture 17
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1. 2.
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In what ways are web 2.0 technologies different to those of the first generation? Discuss, with examples Social networking sites are purely for leisure purposes and companies should ban their use during working hours. Discuss the validity of this statement. What do you understand by the term web 2.0? Briefly describe the various collaborative components of web 2.0 and show how each one exhibits the participative nature of web 2.0. (2011) Why are many companies beginning to use web 2.0 technologies? Give examples of web 2.0 technologies that companies are exploiting (2012)
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Discuss the similarities and differences between the internet and cloud computing. What are the main business opportunities offered by cloud computing? Mobile technologies offer new business opportunities. Discuss, with examples, whether mobile technologies can be a real substitute for traditional wired technologies. A B2B company has found that after an initial surge of interest in its intranet and extranet, usage has declined dramatically. The e-business manager wants to achieve these aims: a) Increase usage, b) Produce more dynamic content, c )Encouraging more clients to order (extranet). What would you suggest?
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Why are organisations increasingly considering new forms of organisation (e.g. network organisations, tele-working)? What are the problems in implementing them? Discuss the benefits and drawbacks of mobile working (2012) What are open source communities in the context of software development? What do they offer in this context? What are the problems in building and maintaining viable open source communities? (2012) Read the essential readings on traditional organisations and open source, and then list all the potential issues that you can think of when two such diverse forms of organisation are encouraged to merge together. Think along the lines of control, communication, structure of both forms, and incentive and sanctions methods.
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E-business security deals with the matter of planning and managing security within and around computer systems.
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Five goals of information systems security Integrity: data are not modified without authorisation Confidentiality : ensuring that only authorised individuals have access Availability: information is available when it is needed Non-repudiation: guaranteeing that someone cannot deny his or her participation in a transaction Authenticity ensuring data & transactions are geniune
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UOL/Ebiz concurs these goals can be achievable through: 1. technological implementations 2. organisational procedures
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Adopt appropriate technical security to the three layers: 1. Computer security layer 2. Network security layer 3. Internet security layer
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1.Covers
the socio-technical dimensions of e-business security to design security with needs of users in mind 2.Cost-saving should not be the major concern 3.Mgt involvement 4.Information security policies well crafted (see ISO) and enforce.
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User authentication technique such as 2FA Data integrity technique such as Check-digit validation
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End of lecture-19
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A new business strategy involves evaluation of all aspects of firms operations and environment, i.e. technologies, economics, and management aspects. For our Ebiz studies, we are not very concern over how to use or implement the new technologies but more so the impact on the economics and management aspects (e.g. resources/budgeting - Marketing, scheduling SCM, procurement, customers - CRM) for a given e-business strategy.
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Chaffey: E-business strategy is a channel strategy The e-business strategy document is often not a long document as it does not contain detailed plans or timelines. Strategies are a result of careful analysis, it defines a position in the marketplace, and aim at gaining a competitive advantage.
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Adding value through improved products or services or from using information to improve customer relationships. Reducing costs through efficiency savings (e.g. reduced inventory within the supply chain). Managing risks Creating a new reality
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Dynamic environment like e-business, where there may be radical changes in: customer tastes and behaviour technology developments capabilities of trading partners availability of resources, especially skills and investment capital legal frameworks (e.g. copyright laws) competitors actions product and service developments especially from new entrants to the market
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End of Lecture-20
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Discuss the role of technology in enforcing information systems security. Explain why more investment in IT does not always lead to more secure information systems. Discuss how and why biometrics can solve many security related IT problems. Explain, with examples, whether there are any shortfalls in biometric security based systems Discuss the main technical and security related problems in internet based e-business activities. Critically discuss with examples (2011). Discuss the main organisational threats to e-business security. Support your answer with examples (2012)
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For each of the above six generic sell-side strategies, identify a good example of a company that has successfully adopted that strategy. Imagine you are a consultant whose job is to design a new B2B strategy in a firm which intends to open a buyer oriented marketplace. Which factors would you consider in advising the firm whether it is worthwhile pursuing such a strategy? Justify your answer theoretically (2012). You have been asked, as a consultant, to begin work on an ebusiness strategy for a new pure-play, online, business-toconsumer retailer. What areas would you examine regarding this strategy? For each area, briefly discuss an issue that you feel is likely to be important in this context (2012).
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Why do companies formulate e-business strategies? Briefly outline how companies usually go about formulating these strategies. What are the main problems involved in e-business strategy formulation? What is an e-business strategy? Which aspects of a companys business should it cover? Who should be involved in its preparation? Justify your answer. How does e-business strategy differ from traditional business strategy?
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Good luck !
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Management & Innovation of E-Business IS3167, 2790167 (2011) (assembled by Jack Koh)
EBIZ Course Material for 2012 (Set-3) Acknowledgment: 1) All text in italics are replicated from the UOL Study Guide, for easy references by students 2) All diagrams are taken from Chaffeys instructor guide Lecture/ Topics (chapter-no refers to the chapter of the UOL study guide) Lesson 1 Chapter-1: Introduction: growth of e-business and strategies (16/9/12) Group Mini-research Assignment: TripAdvisor.com (or Netflix.com or Facebook). Form a group of 2 members (or 3 maximum). Write a research report and post it on the Internet. The report should, at least, explain briefly the nature of its business, and how the 8 key elements of the business model are addressed by them. See www.uol-ebiz.blogspot.com for sample layout-format of report. The leader shall submit their url-link by the start of lecture-4 to Jack Koh (jackkoh@singapore.com cc jackkoh20@gmail.com ). Start-date: Lecture-1 Due/Deadline: Lecture-4 2-3 Chapter-4: Business-to-consumer (B2C) retail systems and strategies 4 Tutorial-1 5 Chapter-6: Business-to-Business (B2B) wholesaler models and strategies Individual Assignment-1: Start-date: lecture-5, Due/Deadline: lecture-7 6 Tutorial-2 7-8 Chapter-5: Marketing for e-business (e-business strategy) Individual Assignment-2: Start-date: lecture-8, Due/ Deadline: lecture-10 9 Tutorial-3 10-11 Chapter-7: Supply Chain Management Individual Open-book Test-1: 2nd half of Lecture-11 12 Tutorial-4 13-14 Chapter-3: Economic theories of e-business (economic infrastructure) 15 Tutorial-5 16 Chapter-8: Web 2.0 in business and society (technical infrastructure) Chapter-2: e-Business, technology & infrastructure (technical infrastructure) 17 Chapter-9: New forms of organisation (Managing Change) 18 Tutorial-6 Individual Open-book Test-2: 2nd half of Lecture-18 19 Chapter-10: Security issues in the digital environment 20 - 21 Chapter -11: Conclusion & implications of e-business strategies Tutorial-7 Appendix-1: Past year Exam & Discussions Appendix-2: How to publish your group report on the Internet Assignment and Test Schedule You are advised to participate in assignments and tests. One of the benefits is these assignments and tests will add credits to your personal testimonial and will greatly facilitate the writing of reference letter for you later on. 1. Group Mini-research Assignment: TripAdvisor.com (or Netflix or Facebook). Form a group of 2 members (or 3 maximum). Write a research report and post it on the Internet. Start-date: Lecture-1 Deadline: Lecture-4 (Participants will receive the Ebiz bible auto-email to them in Mar 2013) 2. Individual Assignment-1: Start-date: lecture-5 Deadline: lecture-7 (Participants will receive the Ebiz bible auto- email to them in Mar 2013) 3. Individual Assignment-2: Start-date: lecture-8 Deadline: lecture-10 (Participants will receive the Ebiz bible auto-email to them in Mar 2013) 4. Individual open-book Test-1: 2nd half of Lecture-11 (sample solution shall be auto emailed to participants later) 5. Individual open-book Test-2: 2nd half of Lecture-18 (sample solution shall be auto emailed to participants later)
Set 3 of 3 sets of Ebiz study notes
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Lecture-13 & 14: Supporting notes SG chapter-3/ Economic theories of e-business (All text in italics are extracts from the UOL Study Guide, for your easy references) (All diagrams are taken from Chaffeys instructor guide) Suggested reading: a) Chaffey, D. E-business and e-commerce management. (Harlow: Financial Times/Prentice Hall, 2009) fourth edition [ISBN 9780273719601] Chapter 2. b) Cordella, A. Transaction costs and information systems: does it add up? Journal of Information Technology 21(3) 2006, pp.195202. http://personal.lse.ac.uk/cordella/Transaction%20costs%20and%20information%20systems.pdf Abstract: Transaction cost theory has often been used to support to support the idea that information and communication technology (ICT) can reduce imperfection in the economic system. Electronic markets and hierarchies have repeatedly been described as solutions to inefficiencies in the organisation of transactions in complex and uncertain settings. Far from criticising this assumption, this paper highlights the limits associated with this application of transaction cost theory that has been prevalent in IS research. Building on the concepts first proposed by Ciborra, the paper argues that information-related problems represent only some of the elements contributing to transaction costs. These costs also emerge due to the interdependencies among the various factors contributing to their growth. The study of the consequences associated with ICT design and implementation, grounded in transaction cost theory, should therefore consider the overall implication ICT has on these interdependences and not only the direct effect it has on information flow, distribution, and management. c) Cordella A. Does information technology always lead to lower transaction costs? http://csrc.lse.ac.uk/asp/aspecis/20010024.pdf Abstract: This paper reconsiders the effect of information technology on transaction costs in view of IT externalities and coordination costs. The aim of the paper is to show that IT has ambivalent (i.e negative) effects on the overall transaction costs. This analysis is based on the idea that IT externalities have both positive and negative effects on coordination and thus transaction costs. Two different strategies to use IT in an organizational setting are identified: one to increase the amount of information available to decision makers thus to reduce the uncertainty and hence transaction costs. The other to reduce the amount of available information to decrease the complexity faced and thus coordination and transaction costs. Finally, the effects of IT externalities impose the awareness that one strategy is not a substitute to the other rather that they can both coexist. d) Malone, T.W., J. Yates and R.I. Benjamin Electronic markets and electronic hierarchies, Communications of the ACM 30(6) 1987, pp.48497 or a copy of the article at website: http://is.esade.edu/faculty/wareham/Teaching/StratNetComp/Readings/Electronic%20Markets%20and%20electronic%2 0Hierarchies.pdf Abstract: By reducing the costs of coordination, information technology will lead to an overall shift toward proportionately more use of markets - rather than hierarchies - to coordinate economic activity. New information technologies are allowing closer integration of adjacent steps on the value-added chain through the development of electronic markets and electronic hierarchies. Although these mechanisms are making both markets and hierarchies more efficient, we argue that they will lead to an overall shift toward proportionately more market coordination. Some firms will be able to benefit directly from this shift by becoming market makers for the new electronic markets. Others will be able to benefit from providing the interconnections to create electronic hierarchies. All firms will be able to benefit from the wider range of options provided by these markets and from the possibilities for closer coordination provided by electronic hierarchies. By the end of this chapter, and having completed the essential reading and activities, you should be able to: explain transaction cost theory and identify the main types of transaction costs analyse the impact of e-business technology on transaction costs explain how and why disintermediation occurs in electronic markets discuss the impact of e-business technology on the organisation of markets with examples from the real world explain the myths that were current during the dot.com boom.
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Introduction e-BUSINESS is built on two main infrastructures namely the economic infrastructure and the technology infrastructure . In lectures 13 and 14 we dealt with the economic infrastructure and in lectures 16 we cover the technology infrastructure. Without these 2 main infrastructures, there would be no e-business commerce. This chapter presents the economic infrastructure represented by the transaction cost theory. What is a transaction? What is cost of transacting? In transaction cost theory, we are largely interested in the cost of transacting rather than the transaction itself. However, we must be aware that the different type of transactions affects the degree of cost of transacting. Can e-Business (through innovative use of IT) removes most or all of these transacting cost so at to make market more attractive? The transaction costs theoretical framework to explain the deployment of and challenges faced by e-business strategies. This framework provides a robust explanation of the basic economics of e-business. On this basis, the chapter discusses how information and communications technology (ICT) can be designed and deployed to reduce the costs of transactions and hence to change the structure and dynamics of markets for products and services exchanged through e-business. The chapter also discusses the theoretical implications of disintermediation and re-intermediation (the changing roles of intermediaries or middle men), according to the economics of transaction costs. The purpose of this chapter is to introduce the most common theories that have informed the management and economics of e-business. The chapter will mainly focus on transaction cost theory and conceptual approaches to intermediation and disintermediation. In order to match the literature on the theories, in this chapter we refer to e-business technology as ICT (information and communication technology) and hence you should treat these terms as being synonymous. The main economic theory you need to understand is the transaction cost model. Examining how markets are organised and how and why ICT can be designed and implemented to facilitate the functioning of market mechanisms, we discuss the fundamental factors that produce electronic markets. We therefore present and discuss a limited version of transaction cost theory, focusing on those factors that affect the exchange of goods and services in a market context. We discuss the circumstances under which ICT can make market mechanisms more efficient. For a more detailed presentation of transaction cost theory, you can refer to Ciborra (1993) and Williamson (1985). Cordella (2006) presents a useful discussion of the application of transaction cost theory to information systems and we recommend that you read this article. The basic assumption of transaction cost theory is that economic agents (buyers and sellers) face costs to make the exchange of goods and services possible (see Picot et al., 1997). These costs are not necessarily reflected in the price at which goods and services are exchanged. These costs, called transaction costs, are mostly related to information processing costs: not all the information needed by buyers and sellers about the object of the exchange is available; it is costly to process the available information, etc. We identify the different types of information processing costs that individuals face, namely search costs, contracting costs and control costs. We also elaborate on how ICT might contribute to lower transaction costs, which, in turn, makes the exchange of goods and services more efficient, and therefore improves the overall efficiency of the economic system within which these exchanges take place.
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After introducing the basic elements of transaction costs, we discuss how ICT can affect the roles of the different economic agents involved in the exchange of goods and services. Disintermediation is a typical example: this is the process by which the number of economic agents involved in an exchange (i.e. resellers, wholesalers and mediators) is reduced. Disintermediation typically occurs because ICT does for free what intermediaries do for a fee. Following the transaction costs argument, ICT provides better opportunities to process information related to the exchange, reducing the need for support for buyers and sellers in managing the essential information needed for the exchange. ICT therefore reduces the need for third party services and hence the costs faced by buyers and sellers. The first reason why disintermediation occurs is therefore rooted in transaction cost theory. Moreover, building on Picot et al. (1997), we discuss how and when ICT-led disintermediation occurs What is a transaction? A transaction (or exchange) is defined as the transfer of property rights [Picot/Dietl,Reichwald/ Wigand], whereas property rights are the rights of individuals to the use, make alteration, income (make profit) and transfer (UAIT) of resources [DeAlessi,/Franck]. A transaction is contract carried out between separate entities often involving the exchange of items of value, such as information, goods, services and money. Today, transactions not only refer to the obvious cases of buying and selling, but also day-to-day emotional interactions, not necessarily commercial like informal gift exchanges, etc. Take an elementary unit of analysis the transaction or exchange between at least two individuals, we can appraise management information systems in terms of the reasons why transactions use and produce information. If we consider the organization as a network of exchanges and contracts between and among members, both co-operation and conflict can be taken into account because individuals might withhold information while they are in the process of exchange. The transaction-cost theory introduces the hypothesis of opportunistic behaviour according to which organization members might distort the use of information to achieve their individual goals. Human beings are not capable of listing down all aspects of complexity and uncertainty accurately nor ascertain an exact true price. Take the transactions of the sales of a table and a musical CD. We need to examine the exploit of the property rights. In both cases, the new owner could use it, make alteration, make an income out of it, or transfer the ownership. The sale of the table is likely done through a traditional marketplace. The table is physically limited in form and the new owner, in exercising his ownership rights of the property, would likely be constricted when trying to vary its form or structure. However, the transaction of the musical CD is different. The transaction has a greater opportunity of being exposed to opportunistic behavior e.g. it can be burn to produce more copies, musically mixed to produce a new musical version, duped as video background music, etc. In other words, it could be altered take on many other different market forms. This results in increased complexity and uncertainty giving rise to further opportunism, and bounded rationality. Contracting Parties In the ideal typical world of perfectly competitive markets where all contracting parties are deemed to possess all the information required to make fully informed rational choices (about past, present and future contingencies), they are indifferent between market and organizational co-ordination. It is when information is incomplete (and in practice it nearly always is) that the choice is pertinent for contracting parties.
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A complete contract is defined as one where all the relevant information (i.e. all possible contingencies, past, present and future) are covered by both the contracting parties.
A diagram below will help appreciate the possible distribution scenario of relevant information between contracting parties call them A and B. Imperfect market Both A and B will have their own private information. This leads to information asymmetry between the 2 actors. Their common knowledge of the product lies in the overlapped circles. But both actors are unaware of the information, represented by the space between the rectangle and the circles to attain complete information. perfect market Both actors will have access to same information in market Q. So how will A or B improve their information space?
Rectangle = complete information
Bs private information (asymmetric information) Common information
Information not access by both A&B
What is the cost of transaction? The cost of transacting refers to the cost of incurred to conduct a transaction such as administration cost, IT processing cost, information cost, transportation, manpower, coordination cost, storage, lost, replacement, insurance, damages, currency exchanges, legal expenses, correspondences and visitations to intermediaries cost. Such cost are incurred from the time the buyer takes an interest in a product or service until the time the product or service is satisfactory acquired by the buyer. The cost of transacting is not the cost of product or service itself. The transacting cost adds to the final selling price of the product or service. The cost of transacting rises with the level of opportunistic behaviours and mistrust associated between the transacting parties. Transaction costs (Ronald Coase, 1937) can be viewed as the economic equivalent of friction in physical systems: the greater the friction in the physical system, the more impeded the movement (exchange of goods & services); by the same token, the higher the transaction costs. Costless transaction is impossible and can only take place in an ideal world, where there are no frictions, impediments or barriers. Where exchanges involved external parties, market uncertainty, processing, contractual obligations and other market-level frictions normally get more complex. There are many reasons and factors of cost. Whereas, in an exchange or transaction involving only actors within the organization, says the planning department placed a work order to the production floor, the processes are regulated by rules and internal systems. Opportunism and mistrust are not real concerns here. The internal processes are not as complex as issuing the purchase order to an external provider where the cost of transacting can be costly, and hence the reason that some firm takes to internalization (or vertical integration) to save cost and minimize complexity. The transaction cost model Transaction Cost Theory was first introduced by Ronald Coase [1937]. Coase used it to develop a theoretical framework for predicting when certain economic tasks would be performed by firms (internal), and when they would be performed on the market (external). Coase spoke of the cost of using the market mechanism for exchanging goods and services. Set 3 of 3 sets of Ebiz study notes Page 91/ 154
In the transaction cost model, markets are viewed as organisational structures which coordinate buyers and sellers by matching the reciprocal expectation related to the price-quantity/quality relationship. The transaction (exchange) is therefore coordinated on the basis of a contractual arrangement which specifies buyers and sellers, the object of the exchange and the price at which the transaction will take place. If you take as the elementary unit of analysis the transaction or exchange between at least two individuals, you can envisage the information-related problems that create uncertainty regarding the object of the exchange and the relationship between price and quantity/quality, which is fundamental to the decision of the two parties to engage in the transaction. Looking at the transaction as the unit of analysis, we can identify how and where ICTs can be used to facilitate access to this information and why ICT can be used to reduce the transaction costs. If you consider the market as a network of exchanges and contracts between buyers and sellers,both cooperation and conflict should be taken into account because individuals might withhold information during the process of exchange. This in fact can generate extra profits and higher revenues for either buyers or sellers. Every business activity is characterised by a certain amount of uncertainty and this may stem from the task, the technology or the environment. However, the transaction cost framework considers another, rather distinct, form of uncertainty, namely behavioural or strategic uncertainty, which has its origins in the conflict of interests that exists between buyers and sellers. The information that buyers or sellers receive or gather may well be unreliable, with the result that they have to undertake excessive information processing in order to evaluate its reliability. The fact that information is obtained from human sources means that it cannot be trusted a priori (i.e as facts). In fact, humans can exploit the use of information to obtain extra profit. This strategic consideration is due to the fact that interdependent strategic intents are affecting the exchange and use of available information. Buyers and sellers cannot be seen as solo chess players whose only opponents are the technology, a random environment or random nature. Put differently, in order to pursue individual interests, buyers and sellers are willing to manipulate, omit or even distort information to gain extra value from the exchange. In so doing, they pollute the information setting within which the exchange takes place. Needless to say, this generates the need to invest in sophisticated solutions to double check information. Buyers and sellers cannot trust the information that is exchanged, so they have to invest in solutions that reduce the risk of becoming exposed to polluted information. This leads to an increase in transaction costs, which explains the design of information systems that aim to make more reliable and transparent the information exchanged between buyers and sellers. As we discuss below, specific intermediaries infomediaries become highly relevant to facilitating transactions in situations where complex information settings make it difficult for buyers and sellers to finalise the exchange. Types of transaction costs The transaction cost model assumes that the market is a bundle of transactions or exchanges between individuals who behave so as to optimise their revenues from the exchange. The transaction cost model defines this behaviour as opportunistic. As noted above, transactions entail costs in terms of resources that need to be deployed to complete an exchange of goods or services between the parties (i.e. buyers and sellers). Hence, transaction costs reflect the imperfections of the market mechanism in allocating resources on the basis of the pricequantity relationship. There is always some information-related problem that makes it difficult, and therefore expensive, to finalise the transaction.
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You may view transaction costs as the economic equivalent of friction in physical systems: the higher the friction in a physical system, the more the systems movement is impeded. By the same token, the higher the transaction costs, the lower the degree of economic activity occurring in the market. Costless transactions only take place in an ideal world where there are no friction, impediments or barriers to the immediate perception of the equity of the exchange (i.e. perfect knowledge of the price-quantity/quality relationship). Factors that may contribute to the cost of a transaction in the real world can be identified as follows: Searching for the product or service in question, as well as for the true price at which the sale/purchase ought to take place. There are two types of search costs: (1) the costs associated with searching for the actual product or service, and (2) the costs involved in determining the best price at which the product or service could be bought. Carefully crafting the contract that regulates the exchange, so as to avoid later claims. Monitoring its execution so as to pinpoint responsibilities and penalties if modifications have to be made to the original contract. Finally, checking the reputation of the partners in order to minimise subsequent surprises related to the undiscovered properties of the transaction. These costs are generally defined as the costs of gathering information, evaluating alternative options, negotiating and contracting. They are the consequences of the complexity and uncertainty of the economic system. Uncertainty and complexity can be related to either human behaviour or environmental or unpredictable events. More specifically, we may group the information-processing costs related to transacting through negotiation of an exchange into four main classes: search costs: the costs necessary to set up the minimal social unit for the exchange (i.e. identify the party with which one wishes to conduct the transaction) contracting costs: the costs related to the negotiation of the terms of the trade and drawing up the contract which regulates the exchange control costs and regulation costs: these costs relate to the implementation of the contract under conditions of uncertainty, the policing of deviations from the contract terms and the enforcement of sanctions to restore conditions suitable to the terms agreed. Each of these affects a segment of the transaction lifecycle, which can be divided into three stages: search contracting control/regulation.
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Therefore, transaction cost frictions occur in transactions (exchanges). Being able to realise their impacts, firm can exploit and use them to compete effectively in e-business operations. These frictions occur during various stages of the transaction cost, such as - Search stage: frictions of uncertainty and bounded rationality (no opportunistic cost here) involved externalities. - Contract stage: frictions of uncertainty, bounded rationality, opportunistic behaviour, asset specificity, and small numbers. Cost of bargaining, finding the right price/qty/quality, due diligence of vendors , the writing, finalising of contract terms are majors activities here. - Control (regulation) stage: frictions of uncertainty, bounded rationality, opportunistic behaviour, small numbers. Asset specificity. Activities include the execution and monitoring of the contract terms. We can expand the activities in Coases transaction life cycle, thus Stage-1: Cost of searching for buyers and sellers (vendors) Searching, collecting, collating product information during procurement Comparing prices of product and services during the procurement process Marketing of services and products Stage-2: Cost of selection of partner and writing the contract Due diligence investigations: Research the background, reliability, dependability and tenure of partners Evaluation of reputation of partner Selection of partner Drafting the terms of contract Negotiate terms of contract Securing and writing the contract Stage-3: Cost of monitoring and enforcing the contract Sales order processing: capturing, monitor, supervising and allocating Delivery and transportation of goods Customer services Feedbacks Back-end processes with back-end partners. IT processing and coordination cost. Monitoring and enforcing contract. Control and regulation costs - costs relate to the implementation of the contract (supply, storage, replacement, payment, etc) under conditions of uncertainty, the policing of deviations from the contract terms and the enforcement of penalty to restore conditions suitable to the terms agreed upon The diagram below summarise where frictions may occur during the transaction and between transacting partners: - Asset specificity - Uncertainty - Small numbers
- bounded rationality - opportunism
- bounded rationality - opportunism
Transaction Partner A
Transaction Partner B
Bounded Rationality: "The capacity of the human mind for formulating and solving complex problems is very small compared with the size of the problems whose solution is required for objectively rational behavior in the real world -or even for a reasonable approximation to such objective rationality." Hence, individual turns to their past experiences, exposures, tried & tested methods and this has a limiting effect on getting the best value from the transaction.
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All human as decision makers has limited cognitive capabilities, and bounded rationality increases with incomplete information in imperfect market [Simon, 1957; Selten, 1998]. In short, bounded rationality refers to an individuals limited memory capacity, limited experience and inability to achieve maximal value on the information available. This constitutes increased cost, particularly in the area of search (as in the examples of manual checking on airline arrivals or checking the best value of a netbook at a IT-fair or Sim Lim Square), contract, and monitoring and control costs. Individual, limited by bounded rationality and being unfamiliar with the market or not knowing what to look for, may be actually conducting excessive searches and be overwhelmed with both TC relevant and irrelevant information. The graph shows that the more imperfect the market, bounded Imperfect Mkt rationality will increase. The same bounded rationality limits the individual ability to negotiate and draft an elaborate contract which can end up with higher cost eventually. Thus, humans are inclined to Bounded Rationality make erroneous decisions. Error constitutes increase search, contract and control costs. Opportunism: Opportunism describes the human self-interest in taking actions, including cheating, lying and infringing contracts [Williamson]. Satisfying one ego rather than monetary gain, like Nick Lesson rampaging trading and subsequent destruction of Barings Bank, is another example of opportunism. Refers to the suggestion (widely associated with transaction cost analysis) that a decision-maker may unconditionally seek his/her self-interests, and that such behavior cannot necessarily be predicted. This proposition extends the simple self-interest seeking assumption to include "self-interest seeking with guile" thereby making allowance for strategic behavior (Williamson, 1975). Some examples are strategic manipulation of information or misrepresentation of intentions; false or empty, i.e. self-disbelieved, threats or promises (Goffman, 1969), has profound implications for choosing between alternative contractual relationships. Opportunistic behavior contrasts with stewardship behavior that involves a trust relation in which the word of the party can be taken as his bond. In a way, trust is informal rules. Formal rules, controls (i.e. hierarchy form) can help in reducing cost. Opportunism increases contract, and control costs. Trust will lower contract, and control costs. The opposite is altruistic behavior which TC does not take into consideration. Uncertainty : Uncertainty is embodied in any kind of future action. Uncertainty feeds opportunism. Uncertainty is reference to the lack of knowledge (ignorance) about the state of the environment or other d ecision variables. Uncertainty about the future, uncertainty about other places, events, structures and other phenomena. Risk is reference to the consequences of uncertainty, such as regret often expressed in terms of probabilities of such consequences. Uncertainty then reduced to uncertainty about actual occurrence and, possibly, about the reliability of probabilities. It shall be suggested that "complexity" (at a point in time) and "instability" (over Info Quality time) are two different root causes of uncertainty and (following Lawrence & Lorsch) that these two attributes of decision environments lead to o poor quality of information, increases information asymmetry. The graph shows the reverse is true in reducing information asymmetry and uncertainty. Uncertainty o leads & lags in the economy resulting in delays in in formation feedback, and o a lack of causal understanding o and thereby contribute to the individual's uncertainty and can be identified as more immediate "causes" for uncertainty The higher the uncertainty the impact of increasing cost, particularly in search, contract and control costs.
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Asset Specificity : Asset specificity terms the significance of certain assets that support a specific transaction. These are assets which cannot be transferred to or used within other transactions [Williamson]. The BBQ pit is high use asset specificity since it cannot be use in other forms (as a chair, a table?). Refers to the relative lack of transferability of assets intended for use in a given transaction to other uses i.e. assets which cannot be transferred to or used within other transactions (U.A.I.T). All specialized equipment has high asset specificity . Highly specific assets represent sunk costs that have relatively little value beyond their use in the context of the specific transaction. Asset specificity is a major theme of transaction cost based economic analysis for a very basic reason. The more committed one becomes to a transaction, the more one stands to lose from unforeseen events and the possibility that contracting partners may find it in their interests to renegotiate more favorable terms from you given that you have committed (or sunk) assets the various forms of asset specificity make transacting parties fearful of making a commitment that might later prove to be 'one way'. The other dimensions of transaction costs are more closely tied to the importance of informational availability. Williamson has suggested six main types of asset specificity. o Site specificity transactions that are specifically bound to a certain location. But the Internet facilitates tr ansfers across countries easily leading to the question of copyrights between countries with different legalities. E.g. Sales of audio CDs mean for uses only in USA. o Physical asset specificity e.g. digital content, a table o Human asset specificity e.g. special skills for contract worker in middle of Timbaktu o Dedicated assets e.g. special tool for mega casino o Brand names e.g. Sony, BMW o Temporal specificity: time dependent asset. Value expires after limited time. E.g. perishable goods and auction items High asset specificity requires strong contracts or internalization to combat the threat of opportunism. Here is an example of the small subcontractors locating and investing next to the handful of 2 or 3 customers who could potentially turn to alternative suppliers because of non-value maximizing reasons (supplier = site and physical asset specificity). The most popular example for the consequences of assets specificity has been the relationship between General Motors and Fisher Body between 1919 and 1926. After a 10 year contractual agreement was signed in 1919, GM's demand for closed-body cars increased to extent that it became unhappy with the contractual price provisions and "urged Fisher to locate its body plants adjacent to GM assembly plants, thereby to realize transportation and inventory economies (for GM)." [Williamson]. Finally, Fisher Body was merged (internalized) into GM in 1926 after Fisher had resisted GM's locational demands. As R.Coase recalls, "I was told [by GM officials] that the main reason for the acquisition was to make sure that the body plants were located next to General Motors assembly plants." [R.H.Coase, "The Nature of the Firm: Origin", Williamson & Winter. High asset specificity increases contract cost, and possibly control co st. Small numbers: Small numbers is about monopolistic conditions where there are few suppliers. So, they are more susceptible to opportunism. The firm can control and raise prices, in small numbers (small increases), and the customers are unlikely to go somewhere else. Cases of Singapores NETS, StarHubs cablevision and SMRT. NETS Fee Hike. Case of unfair monopoly? (TODAY, 5/6/07) IT MAY seemed, at first, not to affect your pocket directly. But when the Network for Electronic Transfers (Nets) raises its levy on businesses offering it as a mode of payment, the increased burden on retailers could lead to higher prices for consumers, warned the Consumers Association of Singapore (Case). At a press conference yesterday, Case president Yeo Guat Kwang minced no words in calling the three- to fourfold increase by Nets unacceptable and monopolistic.
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The watchdog is even considering the possibility of bringing the matter up to the Competition Commission Singapore, the statutory board monitoring fair competition here. About 80 per cent of HDB retail outlets accept Nets and no other debit cards or credit cards, said Mr Yeo. Even government agencies accept Nets as a mode of payment. He added: They have been given this monopolistic mode of operation becau se we see this as a basic infrastructure, to provide a basic mode of payment for all Singaporeans. So, they cant just come out and tell Singaporeans now I see this as ... a commercial decision. Nets chief executive officer Poh Mui Hoon said Nets needed to respond effectively to competition, by paying the interchange fee card-issuers expect from facilities like Nets. Elsewhere in the world, domestic debit networks similar to Nets have been overtaken by international debit networks offering higher returns to card-issuers, Ms Poh added. But Mr Yeo disagreed with the justifications. They should consider other cost -saving methods (rather than increase the levy), he pointed out. And what happens when other debit and credit cards adjust their fees upward? Will Nets do the same?And it is not as if retailers can simply stop offering Nets as a mode of payment, even if they want to. With small numbers (few suppliers), the contract cost will be likely be high as contracting parties resort to establishing a strong negotiation in the contractual terms, with customers trying to hold down price & quality. Low search cost applies asit is futile to search for alternative suppliers in a monopolistic market, as there is only one or very few suppliers. In t he above NETs situation, the retailers may bear the additional charges (owing to competition) and will incur more cost both in the transaction and negotiating the contract terms. Small numbers also refer to situation where customers allowed themselves to be victims of the service provider because they have complete trust in the provider. In such cases, the providers manipulate the situation by raising small increases in prices. The customers are likely to accept the small number increases and continue to use the services of the same provider.
With small numbers, sourcing and searching for new sources will unlikely score any success. In such monopolistic condition, it would be futile to search, so the search cost is likely to be low or of no consequences from the customer, retailer or middlemans perspective. Within a country where there is a very limited number of available suppliers, investing in IT to expand search facilities will not help. BUT in today context, the world is the very connected. Already in place are effective infrastructure (IT externalities) such as the Internet, connected industries, public distributed databases where the world is becoming a "w/o boundaries" - a dot community. Search extending to other new suppliers in other countries is very viable. Outsourcing is another viable solution. This extended search, with some IT investment, will increase search cost but has the effect of diminishing the conditions associated with "small numbers". Again, it also depends on asset specificity factor. Small numbers in some assets may remain entrenched.
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Externalities In economics, an externality is a cost or benefit from an economic transaction that parties "external" to the transaction receive. Externalities can be either positive, when an external benefit is generated, or negative, when an external cost is imposed upon others. It is a form of indirect or side effects though not necessarily an unintended consequence. Example of positive externalities: a) A beekeeper keeps the bees for their honey. A positive side effect or externality associated with his activity is the pollination of surrounding crops by the bees. The value generated by the pollination may be more important than the value of the harvested honey. The negative effect for neighbours is the bees come and watch TV with them, and sometimes stink their children, so they have to put up with some kind of screens (costs) on their doors and windows to keep the bees out. b) A neighbour planting an extensively attractive garden may provide positive benefits to his immediate neighbours and others living in the immediate vicinity, and even financial benefits in the form of increased property values to property owners. c) The government will build an MRT station near/in an estate. Houses around it will benefit both economically and practically positive externalities. Examples of negative externalities: a) Pollution by a firm in the course of its production which causes nuisance or harm to others b) A public transportation resource (such as roads, rail tracks) laid across the estate, imposing congestion, noise, and dust. c) Centralise all crematoriam & wake activities in Upper Thomson area. IT related externalities: a) Networks of Information can unintentionally lead to information overload (a negative externality) where executives are overwhelmed with too much information and do not know how to use them effectively. Thus increasing cost! To correct the situation, more IT processing will be required to analyse, collate, summarise into relevant concise effective information. More cost! b) We can also said that the IT investment may have a negative impact on transaction cost (although, the original objective of the investment was to reduce transaction cost!) as seen in (a) above with more coordination effort. c) Starhub cable network is a costly investment for starhub. But it provides an IT externality factor for competition -"competitor push" and "technology pull. If a Video Company decide to exploit this externalities (technology pull) to provide a new service of VOD, its implementation cost to hook on to Starhub cable is minimal, but it can cause a negative externality on its competitors who do nothing or show indifferent to this competitor push d) Investment in wired network is affected with new implementation of WIFI and WIMAX technology
Quick check Actually, Ronald coases transaction life cycle has 4 stages. The last stage on Maintenance is not of concern for the purpose of the study in our course. Which stages of transaction are these screen referring to?
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1.
Source: Ctrip.com. Hotel-room availability check
2.
Source: Ctrip financial Report
3.
TripAdvisor. Reviews posted by past hotel guests
Information technology as a mediating technology In the transaction cost model, we may conceive of information technology as a mediating technology because it mediates the transactions or exchanges between the parties. Information technology can reduce the costs of transacting (i.e. the information costs) because it enables more information to be communicated in the same amount of time.
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Ciborra, Malone and Picot (1997) argue that information technology can be used to reduce transaction costs in different economic organizations. This argument is based on the idea of using information technology to make more information available to decision makers, thus contributing to the reduction of uncertainty. Accordingly, the information problem that jeopardizes market efficiency can be fixed by supporting the system with information technology. Information technology can be used to reduce the cost associated with transactions. Accordingly to Malone, three different effects of IT on the exchange process can be identified: o o o Communication effect: increase information per unit of time Electronic integration effect: easier linkage between buyer and seller Electronic brokerage effect: the contracting process between seller and buyer becomes more efficient and effective
These effects increase the smoothness of the information flow so that, supported by IT, people involved in the economic system, both market and hierarchy, can better use the existing information and deal better with the uncertainty they have to face. Transaction Cost
Market or Hierarchy For the same cost, more uncertainty may be dealt with in the e-market
e-Market or e-hierarchy
uncertainty In the transaction-cost model, information technology is seen as a factor that can decrease the costs of transacting, thus improving the functioning of the market or leading to market-like forms of organization. Market-like form of organizing involves exploitation of intermediaries. The hierarchy form of organizing entails internalizing external processes and reduction of intermediaries. The effect is thus providing the enterprise more bureaucratic control over the transactions and processes. Recall that the logic behind this argument is that the lower the transaction costs, the more suitable the market as a form of organizing. In other words, markets as opposed to bureaucracies entail transaction costs, while bureaucracies replace transactions with hierarchical decision-making, thus entailing a higher amount of managerial costs (agency cost) rather than transaction costs. The more one uses information technology, the lower the transaction costs and, therefore, the more efficient the market as an allocation mechanism. However, we should consider that the increased amount of information being communicated in the same time unit might increase the information processing costs that the transacting parties need to endure, information technology does not necessarily lead to lower transaction costs. In the transaction cost model, information technology is seen as a factor that can decrease the costs of transacting, thus improving the functioning of the market or sustaining market-like forms of organisation. The logic behind this argument is that the lower the transaction costs, the more efficient the market will be. The more you use information technology, the lower the transaction costs and, therefore, the more efficient the market will be as an allocation mechanism.
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Strength & Weaknesses of TC economics The strength of the transaction cost perspective is that it offers a compact set of concepts and a unifying language to analyse and interpret a variety of micro and macro phenomena, such as vertical integration between firms, employment contracts and internal labour relations, anti-trust laws and interventions, and even the emergence and failure of economic institutions. Nevertheless, it has two major limitations. First, transaction cost economics is based on a sophisticated but still narrow view of the agent as economic man, who maximises utility despite the limits of their rationality. Therefore altruistic behaviour, for example, is beyond its scope. See video of economist Milton Friedmans arguments of capitalism over altruistic economics. Second, the approach presents a static, comparative view of why different economic institutions exist, develop or decay. Transaction cost economics suggests that, for a given level of uncertainty and trust between the parties, there are usually a limited number of governance structures that are efficient and will survive in the long run. When circumstances change, an efficient governance structure must adapt swiftly or it will be swept away by competition. The approach is silent, however, on the forces that make certain economic organisations stickier than others. In sum, transaction cost economics seems to assume an implicit notion of frictionless change. It ignores the widespread role of transition costs in socio-economic organisations undergoing continuous change. ICT and disintermediation Traditionally, disintermediation in this context has been seen to occur when ICT implementations enable economic agents to bypass third parties and directly engage in economic activities with their counterparties. In the context of the web, it has come to signify the disappearance of a wide variety of middlemen, or intermediaries, and the creation of an enhanced sales network in which customers deal directly with service providers. The result is supposed to be a frictionless economic environment that reduces both inefficiencies and transaction costs. Understanding the impact of e-commerce on intermediaries requires an appreciation that: ICT supports many business activities and, as a result, it can lead to changes in market configurations; in particular, it changes the role of intermediaries in matching supply and demand. ICT can reduce transaction costs by eliminating the need for intermediaries that used to make the transaction possible: disintermediation occurs because ICT does for free what an intermediary does for a fee. Chaffeys Chapter-2 demonstrates the costs saved in a conventional producer-wholesaler-retailer-consumer value chain by, first, disintermediating (eliminating) the wholesaler and then, secondly, disintermediating both the wholesaler and the retailer. In the latter case, the price to the consumer becomes the same as that charged originally by the producer to the wholesaler and is less than half the old price that the retailer charged the consumer. This happens because ICT can reduce search costs, contracting cost, control and regulation costs through facilitating the exchange of information between economic agents (described by Malone et al., 1987 as electronic communication effects) and because it makes it easier to match buyers and sellers (Malones electronic brokerage effects). There are therefore valid economic incentives for both producers and consumers to bypass intermediaries and push them out of the value chain. Intermediaries add significant costs to the value chain and, by suppressing them, the profit margins of producers can increase while at the same time offering lower prices to consumers. Advanced uses of ICT and the evolution of electronic marketplaces have reduced the transaction costs for producers, thus enabling them to internalise activities that had to be served by intermediaries in a traditional market. This has created the opportunity to distribute profits within the
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value system by driving the intermediaries to extinction. Under such a scenario, producers can benefit from increasing their profit margins and passing part of their savings to consumers who thus enjoy lower prices and greater choice. An email from a student: Intermediation, disintermediation, and reintermediation (another form of new intermediary). I am so confused regarding how it leads to reducing transaction costs pertaining to E-Business. I understand that e-business/e-commerce facilitates disintermediation....then you have the transaction brokers which are intermediary brokers (i thought ecommerce facilitates DISintermediation?) , and they aid in reducing transaction costs....then there is the search engines which are intermediaries that support in lowering of TC, and then (mentioned by Dr Antonio), I-Tunes are facilitating disintermediation..... Jacks answer: Disintermediate = removes intermediaries (in manual physical market place, often has long line of intermediate parties) Intermediary = act as middleman between 2 parties. If you do everything yourself, then there is no need for any intermediary to help you. BUT is this really possible? if you take a taxi to go to the a tour agent, who calls a wholesaler agent to book hotel room from a Taiwan hotel... in this physical manual approach, you use three intermediaries to get to the Taiwan hotel room. But, if you now use online B2C Asiaroom.com to book the Taiwan hotel, you use only one intermediary i.e. B2C AsiaRoom.com, (an IT e-business) acting as the intermediary. In this case there is also disintermediation. Search engines act as an intermediary replacing physical intermediaries like taking a taxi (an intermediary) all over town to many shops (intermediaries) searching for the right item. iTunes dis-intermediates because you can now buy directly from the manufacturer of the song titles instead of going through the supply chain involving retails and wholesalers. iTunes shop happens to be the only intermediary now. Infomediaries and Intermediaries Intermediaries are profoundly affected by the adoption and diffusion of ICT(same as IT) in markets. ICT changes the way in which information is accessed and therefore allows agents to bypass traditional intermediaries to execute transactions. It must, however, be noted that a new form of intermediation is emerging alongside the wide adoption of ICT. Electronic markets are characterised by a very rich information setting which, in certain circumstances, makes it difficult to find the right information needed by the agents. If you are looking for information on a specific product, you will find it difficult to identify the right website to support your search without the use of a search engine such as Google. Search engines are intermediaries which reduce the cost of gaining access to and using information. These intermediaries, given the nature of their task, are defined as information brokers or infomediaries (Hagel and Rayport, 1997). The term infomediary was coined by John Hagel in his 1996 article entitled "The Coming Battle for Customer Information" in the Harvard Business Review and book Netgain: expanding markets through virtual communities (review: Hagel does a great job of explaining the opportunities in creating "Virtual Communities". Virtual communities are described as areas where a group of users sharing common interests gather to learn about and discuss information. These communities create an information source that shifts power from the vendors to the customers. Longer term, vendors can capitalize on this community by selling directly to the community members, and more importantly by using the customer interaction to create word-of-mouth advertising. Who are you more likely to trust: another user of the product or some sleazy salesman? The infomediary opportunity is a later stage of development of virtual communities. The notion was that virtual communities as an economic enterprise provide a very powerful way of building trust with customers and to increasingly take the customer's side in terms of facilitating transactions online. Amazon.com is trying to create a community as well as trying to be an infomediary). Source: http://web.archive.org/web/20080505092926/http://www.onewwworld.com/hagel.html
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Hence, Infomediary is a Web site that gathers and organizes large amounts of data and acts as an intermediary between those who want the information and those who supply the information. Informediary is an agent who works with the customer to capture profiles about the customers, helps them to manage those profiles and maximize their value and helps the customer to protect that information from access by vendors. The infomediary maximizes the value of the information by being helpful to the customer in locating products and services that are most relevant to the customer based on who they are and what their preferences are. It can also be in the form of providing portions of the profile to selected vendors at the request of the customer. There are two types of infomediaries: 1. Consumer-oriented infomediary is a third-party provider of unbiased information. It does not promote or try to sell specific products in preference over other products. It simply offer consumers a place to gather information about specific products and companies before they make purchasing decisions. It does not act on behalf of any vendors. 2. Vendor-oriented infomediary is one that provides vendors with consumer information that will help the vendor develop and market products. The infomediary collects the personal information from the buyers and markets that data to businesses. Infomediaries operate on the assumption that personal information is the property of the individual described, not necessarily the property of the one who gathers it. The infomediary business model recognizes that there is value in this personal data and the infomediary seeks to act as a trusted agent, providing the opportunity and means for clients to monetize and profit from their own information profiles. Why would people want to give such information away? The whole notion is around this value exchange. Hagel argued that customers are willing to provide information about themselves if they can be assured about two things: One is that they'll get some tangible value in return, and second, that the information won't later be misused in some way. Hagel foresees many portal-type sites trying to double as infomediaries. In some respects, they have a natural opportunity to target the infomediary business in the sense that they've established themselves as a natural place for users of a network to come and locate resources. Examples of infomediaries: AllAdvantage was an Internet advertising company that positioned itself as the worlds first vendor-oriented "infomediary" by paying its users/members a portion of the advertising revenue generated by their online viewing habits. It grew to more than 12 million members in its first 18 months of operation. Companies like ComputerNet and BizRate, who are helping customers evaluate different vendors based partly on information about who the customer is. Some of the financial service intermediaries like Intuit and E*Trade are providing analytic tools that will tell the customer, "If you help me understand what your needs are, say in terms of retirement planning, we'll help you decide what products are most relevant to you and then help you locate those products." Chaffey (2011) Chapter-2 discusses the role of these new intermediaries and describes in detail their different forms and business models. You should refer to Chaffeys book pg 69/Table 2.5, where he distinguishes the various types of portal and electronic marketplace. Here we discuss in greater detail the reason why the importance of these intermediaries is increasing in the digital economy while, in the same context, traditional intermediaries are becoming disintermediated.
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In the previous section, we discussed how ICT can reduce transaction costs by reducing search, contracting and control costs. However, we also argued that ICT can lead to situations where the increased amount of information being
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communicated might increase the information processing costs that the transacting parties need to endure. This is the context where infomediaries become very important and gain business opportunities. ICT in fact generates new transaction costs which have to be borne by the economic agents in the e-business context. These new transaction costs are generated by the increasing amount of information that has to be processed to conclude a transaction. In e-business the number of buyers and sellers is normally greater than in the traditional market. Buyers can buy from any digital seller so that place and time boundaries become irrelevant. Similarly, sellers can access buyers located all around the world. This increases the search, contracting and control costs. Thus, many potential buyers and sellers have to match their interests, negotiate the terms of the exchange and enforce forms of control in order to be sure that what has been agreed upon is effectively exchanged. ICT therefore has a twofold effect. On one side, ICT reduces the need for traditional intermediaries but, on the other hand, it creates opportunities for new intermediaries such as infomediaries. It is in fact possible for specific intermediaries to reduce transaction costs facilitating the exchange, retrieval and processing of the information needed to exchange goods and services in electronic markets. These intermediaries act as infomediaries (information intermediaries) as they intermediate the exchange, use of and access to information. By reducing the information costs they provide valuable support to electronic markets. Infomediaries are therefore a new type of intermediary which is very important in e-business as they make it possible to manage the rich information environment within which electronic transactions take place.Without infomediaries, it would be too complex to manage transactions in digital markets: the search, contracting and control costs would become too high. Infomediaries reduce the transaction costs created by the increased volume of information produced in the digital economy. Infomediaries are therefore specific intermediaries which help to reduce specific transaction costs typically found within ebusiness. Case study Chaffey (2011) in Chapter 2 includes a short interview pg 97 lastminute.com. This is a good description of who set up lastminute.com, why and how. It tells of the vagaries involved in setting up a new venture but, of more interest here, it also discusses transaction value. Lastminute.com was an inspirational idea that reduced transaction costs for consumers while at the same time providing an avenue of revenue for supplier companies that was not possible before intermediaries like lastminute.com. Read the case study and then flip to Table 2.5 in Chaffey. Skim through the various intermediary types listed in the table and think through where you would place lastminute.com and why. Is it a search engine if yes, then what sort? Or do you think it is more a marketplace? Does it help you to compare prices? Look at the examples provided in the same table by Chaffey to give you some help. It might help to think about what service and value this site brought to its customers: was it simply lower prices or some other added value? Myths of the dot.com boom While transaction cost theory provides a real insight into the way that markets changed as a result of the introduction of ebusiness, you should be careful not to use it in an excessively deterministic way. Like all economic theories, transaction cost theory has certain assumptions built into it and those assumptions may not always hold in the real world. It is surprisingly easy to exaggerate the predictive power of any theory.
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People, especially consumers, do not always behave like economic man and they do not always change their behaviour to adopt beneficial innovations immediately. Moreover, if you look elsewhere in economics, you will find various examples of manias or speculative bubbles where investors force up the price of shares in a particular company or sector way past their real value. A good example of this is the dot.com boom of the late 1990s when e-business was touted to revolutionise whole industries overnight case of static, comparative view of Transaction cost economics. Howcroft (2001) provides a very good analysis of this phenomenon and you should read her paper carefully. In particular, she highlights certain myths that were prevalent at the time of the boom. These were: the myth of the new economy the myth of success the myth of the entrepreneurial geek the myth of the level playing field the myth of innovation the myth of the virtual the myth of the online shopping experience. Looking back now, it is very easy to poke fun at some of the myths; for example, the myth of the level playing field. Large companies will always have more resources to plough into their websites than smaller firms. On the other hand, the myth of the online shopping experience is less laughable, as the years go by and B2C e-business becomes more widely accepted. Conclusion This chapter provides the theoretical background to the study of many aspects of e-business. It ties in with the ideas of transaction cost economics and disintermediation to provide an analytical framework for the study of the economic impact of ICT on markets. The chapter explains, from a macro level perspective, the impact of ICT on the value chain and explains how and why disintermediation occurs. It will be clear as you work through the rest of this subject guide that these concepts underpin many e-business strategies.
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Lecture-15/ Tutorial-5 Questions: 1) Identify examples of infomediaries that you regularly use or have come across do not just copy the ones listed by Chaffey (2011). What roles do these infomediaries play? How important are those roles to e-business? 2) Consider the impact of online grocery shopping on the value chain. Does it disintermediate? Or has it brought forth new intermediaries (or infomediaries)? 3) Identify examples of where ICT does not disintermediate the value chain. Why is this so? 4) In the context of a B2B transaction, what are the main classes of information processing costs? Give specific examples of each of these costs, using the example of a shop buying Christmas trees from a supplier. When, and how, might they be incurred in this case? 5) How can transaction cost theory explain disintermediation and infomediation? 6) Outline the myths that circulated during the dot.com boom. Which of these do you believe were completely unfounded, and could never become a reality? 7) Consider this problem: if coordination costs encompass both transaction costs and information processing costs, could information technology raise coordination costs despite reducing the transaction costs? Discuss in detail how this might occur, justifying your answer with examples. 8) It has often been argued that information and communications technology (ICT) is disintermediating electronic marketplaces Infomediaries are however increasing in electronic markets. Discus with examples.(SG Exam sample)
9) Transaction costs can be described as frictions in the market. How can ICT (information and communications technology) reduce these frictions? Discuss the theoretical model of transaction costs and explain how and why ICT can reduce or increase transaction costs. (2011) 10) Describe the phases of the transaction lifecycle. Critically analyse, using examples, how ICT can reduce the transaction costs associated to ONE of these phases.(2012 prelim)
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Lecture-16a: Supporting notes - SG Chapter8/ Web 2.0 in business and society & Lecture-16b: SG Chapter2/ eBusiness, technology & infrastructure Essential reading: Chaffey, D. E-business and e-commerce management. (Harlow: Financial Times/ Prentice Hall, 2011) fourth edition Chapter 1, pp.2426. UK Govts Businesslink resource: http://www.businesslink.gov.uk/bdotg/action/layer?r.l1=1073861197&r.l2=1074448623&r.s=tl&topicId=1081903314 Wikipedia article on Web 2.0: http://en.wikipedia.org/wiki/Web_2.0 In lectures 16a & 16b, we shall cover the other half of the supporting infrastructure of e-business, that is, the technology infrastructure (comprising of Web2.0 and the other general e-business technology) Aims of the SG chapter -8/ Lecture-16a The aims of this chapter are to introduce the concept of a new phase of the web: web 2.0, to explain how it facilitates increased participation and collaboration among users, to explore the application of web 2.0 in business organisations and to critically analyse the business case for the use of web 2.0 by organisations. At the time of writing (2010), web 2.0 is seen as an exciting new technological development with considerable social and business implications. Doubtless, as individuals and organisations mould the technology through repeated use, it will mature and lose much of its initial excitement. Nevertheless, web 2.0 is a qualitative step-change in e-business that deserves detailed study. Key concepts are: characteristics of web 2.0 collaborative components including blogs, social networking sites, wikis, content-sharing sites, user tagging and mash-ups monetisation of web 2.0, including business models the use of web 2.0 by businesses the promises and risks for businesses Learning outcomes By the end of this chapter, and having completed the essential reading and activities, you should be able to: explain the differences between web 1.0 and web 2.0 describe and use the main components of web 2.0 explain how web 2.0 facilitates collaboration and participation among users discuss the potential benefits and risks that web 2.0 offers to business organisations. Introduction One of the most exciting recent developments in e-business is the emergence of what is termed web 2.0. It is seen as the second generation of the web and, as such, a stepwise enhancement of earlier ways of doing e-business. Web 2.0 is a concept that takes the network as a platform for information sharing, interoperability, user-centered design, and collaboration on the World Wide Web. A Web 2.0 site allows users to interact and collaborate with each other in a social media dialogue as creators and prosumers ( producer/consumer) of user-generated content in a virtual community, in contrast to websites where users (consumers) are limited to the passive viewing of content that was created for them. Simply said Web 2.0 is the next level of the Internet in which online users become participants rather than mere viewers. Whereas web 1.0 design emphasised transactions and simple access to information, web 2.0 stresses user interaction and large-scale participation. Pioneering websites, such as Facebook, YouTube and Twitter, are being valued in billions of dollars, but have yet to show a profit, leading pessimists to fear a repeat of the dot.com boom (and eventual bust).
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Is web 2.0 the real thing or is it yet another case of technology hype? In Chapter-2 we briefly explored some of the technologies, such as Javascript and AJAX programming (e.g. Google maps - an implementation example), which make developments in web 2.0 possible. In this chapter we will examine further the emergence of the concept of web 2.0, the most popular applications and their business prospects, as at 2010. The term web 2.0 was famously first used at a conference in 2004 by technologist Tim OReilly to describe new developments in web technology see OReilly (2007) http://oreilly.com/pub/a/web2/archive/what-is-web20.html?page=1 for a good introduction to web 2.0. Below maps are taken from this website:
Web 1.0 DoubleClick Ofoto Akamai mp3.com Britannica Online personal websites evite domain name speculation page views screen scraping publishing content management systems directories (taxonomy) stickiness The list went on and on. . . . .
--> --> --> --> --> --> --> --> --> --> --> --> --> -->
Web 2.0 Google AdSense Flickr BitTorrent Napster Wikipedia blogging upcoming.org and EVDB search engine optimization cost per click web services participation wikis tagging ("folksonomy") syndication
How is Web2.0 important to business? These developments have had significant implications for the use of the web within e-business. Some of these changes include: Understanding the network as a platform rather than just a bunch of connections. Instead of being a relatively dumb network linking the computers of users and companies, web 2.0 can be understood as a general-purpose computer application, or platform, which resides externally to users machines. This means that data and applications are stored out there rather than locally. Harnessing the collective intelligence of users. This platform, which is cheap and easy to use, together with users growing familiarity with the web, has led to a major shift from passive consumption to active participation by users. Instead of just retrieving information or purchasing items from online catalogues, users actively provide content (such as text and video) and interact socially using the web. One could argue that the first glimmers of this trend were apparent in web 1.0 sites such as eBay, Napster, dating sites and multi-user games, but it was web 2.0 that brought about a massive increase in participation. Data is what matters. The incredible increase in user participation means that data (or content) has become increasingly important, as individual users actively generate and retrieve the data that are central to much of their Set 3 of 3 sets of Ebiz study notes Page 111/ 154
social interaction and communication. Improved software tools. With much of the intelligence and processing held centrally, users are freed from the tyrannies of the software release cycle, where they had to spend much time and effort updating their wares. The new lightweight programming models similarly make fewer demands on users machines but still provide a rich user experience. Furthermore, they do this above the level of a single device, such that the same (or very similar) application runs on laptops, personal digital assistants (PDAs) and mobile phones.
These developments have been driven by a variety of people, with varying motivations: web evangelists who wanted to see the web escape the grasp of the rather staid and conservative large corporations entrepreneurs attracted by the potential for profit developers eager to make their mark with the new technologies users who were keen to explore attractive (more or less) free applications and services conventional firms keen to explore new markets and new collaboration mechanisms. Source: http://agamutzweb.com/why-is-web-20-important-to-your-business/ As you are aware, Web 2.0 is a phrase coined by the OReilly Media in 2004 which refers to a perceived secondgeneration of Web-based services such as social networking sites, wikis, communication tools and the like, which helps to emphasize online collaboration and sharing among its users. One of the things that strikes me is how quickly things change on the internet. Web 2.0 is less than four years old and yet is really one of the most important forms of marketing that every internet business must implement. Today people are Set 3 of 3 sets of Ebiz study notes Page 112/ 154
Web2.0 changing the way they surf the internet. With social communities popping up all over the place, people like to be a part of something and get their information out in the latest, most fashionable way. If your business is not involved in marketing itself in some way to social communities, you are missing out on valuable traffic. When people show up to a website or a blog they want to be entertained. Think about that and what it means to your business. No longer can you just throw up a web page with a bunch of useless information in a couple of Google ads and say you are in business. Now Web 2.0 marketing means being interactive with your customers and your visitors. You entertain them by making your page appealing to them. Certainly useful content is important but so are things such as graphics, audio, video, polls, and more. If you are not really sure how to do this, go and take a look at what some of your competitors are doing. You will quickly see a successful website using Web 2.0 and how they have adapted their marketing strategy to todays social marketplace compared to a website that is still living in the dark ages, so to speak. Another thing you need to do is to learn everything you can about Web 2.0 marketing and how you can apply it to your business to make it more successful. The internet is an ever changing world in which you need to stay informed and up to date on the latest changes in this fascinating industry of social marketing. Another source argues that The extent of the information revolution can only be compared to inventions of speaking, writing and printing in the past, which are all major achievements that allowed new ways of sharing thoughts and ideas between people. Web 2.0 is the next step of this information revolution, and to understand why it's so important, we have to observe all the significant applications it represents. This will hopefully give us a better insight into the potential they bring to our personal and professional lives, besides their impact on the whole humanity which we still perhaps don't fully comprehend. Read details in http://stritar.net/Post/Why_Web_2-0_Is_So_Important.aspx Web 2.0 as a convenient shorthand for the collaborative, community oriented web where collective intelligence is harnessed and content is created by the many rather than the few . Users participate in an open fashion using technology that facilitates participation for those who are not serious coders in contrast to the static web of a few years ago . Read details in http://software.intel.com/en-us/blogs/2006/07/11/why-is-web-20-important/ Collaborative components of web 2.0. The key hallmark of web 2.0 is collaboration and participation, which is facilitated by various applications or collaborative components. These include blogs, social networking sites, wikis, widgets and sites that permit content-sharing, among others. Blogs. Short for web logs, blogs are personal pages containing diaries and opinions on topical issues. Blogs are often focused on a single topic, and can be interlinked with comments and other threads. Blog hosting sites are abundant and publishing is simple and free. The predecessors of blogs are the internet forums and bulletin boards that originated in the 1990s. There are about 100 million active blogs, and around 200 million dead ones. It is estimated that 120,000 new blogs are created daily, a large number of which are spam blogs; that is, blogs with fake content or articles that are used to trick search engines and attract users who generate ad revenue by mistakenly visiting these sites. And it is not just individuals who are using blogs. There are corporate blogs as well, in which businesses attempt to have conversations with customers, making it more than just a marketing or public relations effort. These blogs are seen as a way to connect directly with dedicated or interested customers. An important dimension of blogs is that they offer a fascinating alternative to mass media. No longer is the public dependent upon conventional news media that may be highly consolidated and owned by large corporations or governments.
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Blogs give individuals and small groups the opportunity to publish their own news items, free from heavy-handed editorial control. This provides an opportunity for whistle-blowing (e.g. reporting instances of corruption or misconduct encountered first-hand) and, as such, represents a rare opportunity for free speech. However, this can be taken too far and can degenerate into defamation and propaganda. Nevertheless, blogs are often the first media to break news, when bloggers report on events that are just starting (e.g. earthquakes, riots) where the blogger is on the scene long before professional journalists arrive. Some blogs, such as the Huffington Post (www.huffingtonpost.com), have built up a huge international following, based on their style of reporting and opinions, and are accepted as a reliable and valuable part of the news media landscape. Social networking sites. Currently led by Facebook with 850 million members (as at 30/6/2012 source: US SEC filing http://www.sec.gov/Archives/edgar/data/1326801/000119312512325997/d371464d10q.htm#tx371464_14 ), these sites have become phenomenally popular among users of all ages. They allow users to share profiles among friends and colleagues, enable messaging and provide a platform for embedding music and videos, among a growing number of other features. Early social networking sites (e.g. SixDegrees.com and Friendster) struggled to attract loyal users and determine appropriate business models. Indeed, the early history of social networking sites was fairly dismal. These problems have not gone away entirely, but success stories such as MySpace and Facebook are encouraging both entrepreneurs and investors. Indeed, Facebook is now the second most popular website on the internet (after Google). If it were a nation, Facebook would be the worlds third most populous country, after China and India. Boyd and Ellison (2008) provide a good discussion of social networking sites, together with a comprehensive review of the literature in the area. In addition to the conventional social networking sites that mostly aim to facilitate the normal social life of individuals, there are more specialised variations. These include virtual worlds, such as Second Life, where individuals and companies can act out an alternative reality. Somewhat more prosaic are sites such as LinkedIn that leverage career development and recruitment. Smith and McKeen (2008) explore the notion of social computing at greater length. A recent variant of social networking is micro-blogging, best exemplified by sites such as Twitter. These sites function similarly to blogs but limit the number of characters that people are allowed to use to communicate their messages. The point is to broadcast messages concisely and to large numbers of followers. There is a lot of promise for marketing and offering special deals through such sites (see below). At the time of writing Twitter was described by the Guardian newspaper as the hottest internet startup on the planet. Introduced in late 2006, by 2009 it boasted 35 million users and yet employed only 52 staff. It allows individuals to follow their favourite celebrities (e.g. Stephen Fry, Oprah Winfrey) and, like blogs, it is also useful for breaking news, an d featured strongly in the 2008 US election and the 2009 riots in Tehran. Companies that were experimenting with marketing applications in 2009 included retailers French Connection and ASOS, while the UK central government was providing 26 Twitter feeds and 1.1 million people were following the feed from 10 Downing Street. One of the most interesting and enticing current problems for social networking sites is how to monetise them (i.e. how to make a profit from the huge numbers of people taking advantage of their free services). There are a number of difficult questions related to the profitability of social networking technologies that managers of these sites are currently facing: How can they make money without alienating users through excessive advertising? Is there a way to balance users privacy with the tendency to use their personal information for targeted advertising? The failure of Facebooks Beacon recommendation marketing system speaks to this issue of balance. Is advertising the only way to turn a profit?
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What sort of investments should be made to upgrade sites to keep them attractive to users? For example, MySpace lost users and, consequently, advertising revenues after it failed to upgrade its site properly. Various business models have been put forward to try to solve the monetisation problem. These include: clever, more focused marketing and advertising, including affiliate marketing taking a commission on sales of goods and services charging developers to load applications onto sites selling software as a service offering premium services and using the proceeds from these to subsidise free users (e.g. the Googlemail strategy) selling users data to other companies interested in profiling and selling to them these sites hold massive amounts of user data which could be quite valuable (e.g. Facebook manages more than 25 terabytes of user data every day, which is equivalent to 1,000 times the volume of post delivered daily by the US Postal Service). Of course, there are huge privacy questions surrounding the resale of these data. However, there are other issues in social networking. If these sites become the new public square, what does this mean for individuals (and, to a lesser extent, firms)? What sort of an impression should we, as individuals, give online? To our friends, we may wish to appear devil-maycare party people, but to future employers we may wish to appear more serious (Zimmer (2008) explores the privacy issues further). It is too early to comment on the highs and lows of creating and maintaining online social relationships. To date, it appears that social networking sites tend to support conventional offline friendships. In addition to privacy issues, mentioned above, there are the issues of fakesters (people who maintain totally inaccurate profiles) and online bullying. While fairly harmless for most adults, these can be problematic for younger, more vulnerable users. Wikis. Wikis are websites that facilitate the simple creation and editing of any number of connected web pages. Their most popular use is for collaborative and community websites. They constitute the notion of crowdsourcing whereby users can contribute and share their knowledge of a topic or issue. Wikipedia, the online open source encyclopedia, is the most well known wiki but there are many more, often highly specialised, wikis. Their success relies on design principles including openness, incremental development, convergence of ideas and the interlinking of topics, as well as the overriding need for quality control of input through careful editing to ensure that the credibility of a site is maintained. Content-sharing sites. Content-sharing sites allow web users to share content such as photos and videos. In addition, users can tag content, provide feedback on the quality of information, and rate it as well. Sites such as Flickr and YouTube are prime examples of these types of sites. YouTube in particular is very popular, attracting large numbers of visitors, but it has yet to find a viable business model, even though it was acquired by Google for $1.65 billion in 2006. It requires careful control of user contributions to avoid content that is pornographic, defamatory, harassing or illegal in terms of copyright. Related to the legal content-sharing sites are the mostly illegal peer-to-peer networks or file-sharing sites. These highly decentralised networks comprise nodes that share processing and storage and are mostly associated with sharing music and video files (e.g. KaZaa, Pirate Bay,Gnutella). They are constantly prosecuted for copyright violation by music and film companies. User tagging, rating and reviewing. While web 2.0 embodies user participation and collaboration, this is not limited to the contribution of complete articles, music files or videos. Just as important are the reviews and feedback that users give on products, services and opinions. These provide useful indications to firms (such as Amazon and various restaurant and travel sites) and consumers. They are the views of ordinary people and merit a place beside the opinions of expert critics.
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In addition to giving ratings, users can also categorise (tag) items regarding their content and share these tags through sites such as del.icio. us (Delicious (formerly del.icio.us) is a social bookmarking web service for storing, sharing, and discovering web bookmarks) , producing folksonomies (or social classifications, A folksonomy is a system of classification derived from the practice and method of collaboratively creating and managing tags to annotate and categorize content ). Again, this is the voice of ordinary people classifying products, articles, events or services in a way that may be very different to that of an expert. Mashups. A mashup, in web development, is a web page, or web application, that uses and combines data, presentation or functionality from two or more sources to create new services . Mashups combine data from more than one source to produce something new, typically a new information service. They are facilitated by standard application programming interfaces (APIs), common to web 2.0. Examples often involve maps, typically extracted from Google Maps, on which data is then superimposed. An example is chicagocrime.org, which shows how crime is distributed across the city of Chicago. The iGuide travel site takes data from seven sources to provide an interactive travel guide, including maps and photos as well as extensive information on flights, hotels and places to visit. The latest example is the mashup of Nokia maps with coupon locations. Open source development. This is the collaborative development of content (especially software)with a view to making it freely available. This movement began before the introduction of web 2.0 but is certainly facilitated by the collaborative tools and motivations of web 2.0. We examine this phenomenon in detail in SG Chapter 9/Change.
The above diagram (reproduced with permission from www.futureexploration.net) is a depiction of web 2.0 in terms of its inputs (mostly from users), mechanisms and the outcomes that emerge, as well as the building blocks in the outer circle: standards, participation, decentralisation, identity, user control, modularity and openness Business interest in web 2.0. While you and your friends may be avid users of web 2.0, especially social networking sites, and regard them as entertaining leisure tools, commercial companies are also very interested in web 2.0 developments Set 3 of 3 sets of Ebiz study notes Page 116/ 154
and not for leisure pursuits. They regard social networking sites, with their large numbers of influential, well-educated users, as excellent potential marketing and public relations channels. Hence, they are keen to get their products and messages out there. Similarly, such sites offer good potential for informal networking with current and future trading partners. These sites are also potentially valuable for internal team building, in terms of building up a modern and cohesive esprit decorps, which is particularly relevant for teams that are spread throughout the world and lack physical contact. These issues are discussed further in SG Chapter 9. Finally, social networking sites offer companies potential opportunities for recruitment (e.g. the LinkedIn site,mentioned above). Wikis offer companies a convenient mechanism for sharing knowledge with their trading partners (both customers and suppliers) and hence offer the prospect of enhancing these relationships in an efficient and cheap fashion. While complex negotiations and urgent problems will probably always be the preserve of conventional meetings or dinners, wikis offer a handy medium for everyday collaboration. They are particularly valuable where, for example, a customer is beta-testing some new software and the supplier and customer need to work closely together to iron out any bugs. Blogs also offer a new communication channel for external public relations and internal morale-boosting and cultural shaping. For example, a staid old company that wishes to update its image, or change its sleepy organisational culture to an energetic can-do culture, may well switch its press releases and internal newsletters to a blog format. If they are attractively produced and written in a lively fashion, they could represent a (relatively cheap) first step towards changing the company. Employees outside the public relations function may be paid specifically to produce favourable blogs. Similarly, user-generated content and open source development are of great interest to companies that are searching for cheap and innovative content or further development. Enterprise 2.0? Enterprise 2.0 aims to help employees, customers and suppliers collaborate, share, and organize information via Web 2.0 technologies. Andrew McAfee (book titled Enterprise 2.0, 100 pages of book summary@website: http://books.google.com.sg/books?hl=en&lr=&id=Gqz3UF5FbI0C&oi=fnd&pg=PR9&dq=enterprise+2.0&ots=U1m2ZX9R vE&sig=PfB90dD1KmKY5oflhxM4v-jKhDo&redir_esc=y#v=onepage&q=enterprise%202.0&f=false describes Enterprise 2.0 as "the use of emergent social software platforms within companies, or collaborative tools between companies and their partners or customers". Enterprise 2.0 is a push toward integrating the social and collaborative tools of Web 2.0 into the office environment. Daniel Nations from about.com wrote: In the traditional corporate environment, information flows through an ordered path. Information is passed down the chain from the top to the bottom, and suggestions made from the bottom flow toward the top. Enterprise 2.0 changes this structured order and creates controlled chaos. In an Enterprise 2.0 structure, information flows laterally as well as up and down. In essence, it cuts the chains that hold back collaboration in a traditional office environment. This is one reason why Enterprise 2.0 can be a tough sell to management. Order is a manager's best friend, so knowingly unleashing chaos runs counter to their instincts. (see: http://webtrends.about.com/od/office20/a/enterprise-20.htm) Enterprise 2.0 tools make it easier to share and organize information. Tagging and rating provide a straightforward way to find content and make judgments about what to look at. Blogs and wikis are natural collaboration and communication platforms. Social network tools help staff find the right individual or group of people. Enterprise 2.0 has the potential to provide knowledge and content management in a surprisingly cheap and easy fashion using Web-based tools. At the time of writing the SG, large companies such as General Electric, Procter & Gamble, Shell and Airbus are said to be integrating social networking into their corporate strategies in a trend described as Enterprise 2.0. Organisations are using these technologies to encourage internal and external communication and collaboration, to increase productivity, spur innovation and enhance value.
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However, this is not entirely straightforward as some companies face huge cultural obstacles. It is often difficult for business leaders to accept the openness and free-flow of information that these technologies make possible. However, some argue that, sooner or later, organisations will be forced to accept at least some of the technologies and think strategically about how they can restructure work, knowledge sharing and expertise. Web 2.0 promises, risks, advantages and disadvantages Using these technologies in an organisation normally requires certain adaptations. Companies seek the immediacy and easeof-use that web 2.0 technologies provide, while redesigning them to offer functionality such as audit capabilities and access and version controls. However, web 2.0 technologies also embody serious risks, which companies need to consider before deciding to adopt them. These risks or disadvantages include: leakage of sensitive or confidential company data on a social networking site or blog fines that accompany data losses or breaches of confidentiality reduction in employee productivity if the technologies are used for pleasure rather than work purposes. heavily dependent on the Internet, and unthinkable disaster if the Internet fails for days. besieged by unwanted advertisements and marketing media (spams) Some advantages are - Information will flow freely, and people can express their ideas without fear of repression. Web 2.0 would make the Internet a true democratic system, a digital democracy. Web 2.0 allows population to correspond and spread ideas with each other rather than receiving the information from a single source. - information or social content can be pulled or placed at different places and further personalizing it to meet up the requirements of an individual user. instead of reading information from one source, you can receive information from various sources, allowing better and understanding decision. - Web 2.0 tools, users can communicate around the world with a nominal cost or no cost. - Web 2.0 communities are used for driving product feedback and targeting valuable marketing resources - the content and information has no expiry dates (also can be a disadvantage !) - up-todate, current and relevant content - facilitates creativity in developing content G Andrew Pages book, 2009,The power and promise of Web2.0 Tools gives an idea of the promises of web2.0. Read: http://gandrewpage.academia.edu/GAndrewPage/Papers/174929/The_Power_and_Promise_of_Web_2.0
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Lecture 16b: Supporting notes SG Chapter 2/ E-business technology and Infrastructure Essential reading Chaffey, D. E-business and e-commerce management. (Harlow: Financial Times/Prentice Hall, 2009) fourth edition [ISBN 9780273719601] Chapter 3. In lectures 16a & 16b, we shall cover the other half of the supporting infrastructure of e-business, that is, the technology infrastructure (comprising of Web2.0 and the other general e-business technology) Aims of the SG chapter-2 The main aim of this chapter is to provide you with a brief introduction to the information and communications technology (ICT) underlying e-business. While it is essential to build up a basic conceptual foundation in the technology, in order to appreciate the technological possibilities and constraints, you should be careful not to become obsessed or blinded by technological detail. Technology is but one of the essential components of e-business. Key concepts in this area are: networks and the internet networking standards the web web 2.0 (as discussed earlier as part of Lecture-16a) peer-to-peer networks cloud computing mobile computing and m-commerce technologies for supply chain management security technologies for e-business. Learning outcomes By the end of this chapter, and having completed the essential reading and activities, you should be able to: identify the different types of networks and explain their functions, as well as discussing the importance of network standards explain the structure and functioning of the web (in conce ptual terms), including the technologies underpinning web 2.0 discuss the concepts underlying cloud computing and mobile computing and explain how these relate to the internet explain the principles of the ICTs that are used to support supply chain management describe the (software) technologies that provide the security function in e-business systems. Introduction to e-business technology This chapter explores the technical aspects of e-business technology,including standards (widely accepted norms or requirements that establish technical criteria and processes, often set by industry bodies), protocols (rules used by computers to communicate across a network), platforms (hardware or software frameworks that allow software to run), architectures (designs of information systems) and communications infrastructures (such as computer and mobile phone networks). We provide some descriptions of the key concepts and terms which you are expected to know and understand; however, you do not need to describe these in your examination unless you are explicitly asked to do so. Networks and the Internet Individual computers consist of both hardware (input devices, output devices, memory and central processing units) and software (operating systems, utilities and applications). These form the bases of all computing activities. Connecting computers together involves forming networks. Networks are what make e-business so interesting: they open up exciting opportunities for communication, collaboration and markets. There are several types of networks. Some important ones include: local area networks (LANs) a network covering a small physical area,such as a small office wide area networks (WANs) a network that covers a broad geographical area
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virtual private networks (VPNs) commonly used to secure communications through the public internet internetworking (e.g. intranets, extranets and the internet). Note that these network types are not mutually exclusive. For example, the Internet is both a WAN (because it spans the globe) and an internetwork (because of the protocols it uses). Intranets are private networks that operate within organisations. These are used by businesses that want to restrict access to important or sensitive information. Intranets also aim to simplify access to information for employees. Chaffey (2011) states that Intranets are used extensively for supporting the sell-side of e-commerce from within the marketing function. They are also used to support the core supply chain management activities. See Chaffey (2011 , pg 105) for the advantages associated with a marketing intranet and other usages of intranet (Chaffey, 2011, pg 106-107) . Buy-side e-commerce refers to transactions to procure resources needed by an organization from its suppliers. Buy-side e-commerce strategy is about maximizing operational efficiencies while improving customer service quality. Sell-side e-commerce refers to transactions involved with selling products to an organizations customers . Sell-side e-commerce is a channel strategy Extranets extend beyond the boundaries of companies to include suppliers, customers and other collaborators. Extranets are used extensively to support supply chain management (see SG Chapter 7). Particularly interesting for this course is the internet, a so-called network of networks, which enables communication between millions of computers worldwide. As Chaffey (2011) explains, the internet can be understood as a large client/server system. The business benefits of extranet is explained in Chaffey (2011, pg 109) Client computers provide the interface to human users and perform local processing think of your personal computer at home. Servers, on the other hand, are computers dedicated to providing services across the network. Email is an example of a service commonly delivered by servers. Firewalls (which are either be software-based or hardware-based and are used to help keep a network secure. The primary objective is to control the incoming and outgoing network traffic based on a predetermined rule set) can be used to protect the security of information flowing over an intranet or extranet. Firewalls are software on servers where a companys network interfaces with the internet. Firewalls are required to prevent unauthorised users from accessing private networks. We will pick up on the topic of security in SG Chapter 10, for now it is important for you to understand that good information security is more than a technical issue social and organisational aspects are also central to appropriate information security. Networking standards The internet and similar networks are based on a set of technical communications protocols, where a protocol is a highly restricted form of language shared by computers which enables them to communicate with each other. While you are not expected to learn the detail of the technical side of e-business, a basic understanding of certain protocols is necessary in order to appreciate what makes e-business possible and how it is changing. The most important of these protocols are the Transmission Control Protocol (TCP) and the Internet Protocol (IP). These are usually written together as TCP/IP as they operate very closely together. The Transmission Control Protocol layer of TCP/IP breaks files into efficiently sized chunks of data, known as packets. Packets are units of data that are routed between an origin (often a server) and a destination (such as a client) on the internet. The Internet Protocol communicates these chunks of data using a technique known as packet-switching. Once they all arrive at their destination they are reassembled into the original file (by the Transmission Control Protocol). Some important applications of TCP are email, file transfer and the web.
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The web (world wide web) It is important to understand that the internet (the hardware) and the web ( the software) are not the same thing. The web is part of the internet a very important part but theres more to the internet than just the web. The web is based on the Hypertext Markup Language (HTML) standard, which is how we publish information on web pages. HTML has many different functions, including hyperlinks, which allow users to move easily from one document or web page to the next. For users to experience the web, they must have what is known as a web browser installed on their computer. This is a software application that permits them to connect to servers to access and view content online. Web browsers are becoming increasingly important applications because they are seen as being central to the future of the users computing experience. In the past, web browsers were just one of many different software applications, including word processors and media players. However, the move towards what has been termed cloud computing means that activities such as word processing or the creation of databases are done through the browser, on servers in the cloud. We further explore the cloud computing trend (see below). The Hypertext Transfer Protocol (HTTP) is a standard for transferring requests for the delivery of web pages from servers to browsers. The transfer involves sending and receiving packets of data. You will probably be familiar with HTTP from your experiences of surfing online, as all web addresses start with http://. The technical name for web addresses is a Uniform (or universal) Resource Locator (URL). What follows the http:// is known as a domain name. For example, the domain name for the London School of Economics and Political Science is www.lse.ac.uk. Domain names are important because they provide a shortcut to websites online. All domain names map onto what are known as Internet Protocol (IP) addresses. For example, the IP address for the LSE is 158.143.96.8. URL: http://www.lse.ac.uk Domain name: www.lse.ac.uk IP address: 158.143.96.8. You will probably agree that it is much easier to remember your favourite sites domain names than it is to memorise the numerous IP addresses, which is what makes domain name mapping so important. This mapping takes place as part of the Domain Name System (DNS) and is fundamental to the internets architecture. Domain names are also important for companies from a marketing point of view. Many companies view their portfolios of domain names as brand assets. Imagine how many domain names Coca-Cola, a global company with a very recognisable brand, must register in all the different countries in which it operates (e.g. http://www.coca-cola.co.uk; http://www.cocacola.com.sg; http://www.cocacolaindia.com; http://www.coca-cola.com.cn, and so on). Web 2.0 http://www.slideshare.net/howedan/tripadvisor-web-20-applications-case-study Recently there has been much discussion about the emergence of a new version of the web web 2.0. Proponents argue that there are important differences between the original web, first popularised in the 1990s,and web 2.0. The original web was typically composed of static pages, written by a sites owners or administrators, and infrequently updated. In contrast, web 2.0 is said to run on dynamic, user-generated content. It is supposedly more interactive and participatory than the old web, although critics continue to debate these distinctions. The popular site Wikipedia, where users participate and collaborate to generate content, is a notable example of the new wave of websites that rely on user-generated content and governance. Other examples of web 2.0 type technologies include web logs (popularly known as blogs) and social networking sites. As these technologies present interesting opportunities and challenges for business and society, we devote SG Chapter 8 /Lecture 16a to a more comprehensive discussion of web 2.0. At this point, we will just consider the key technical issues.
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From the technical perspective, web 2.0 is different in terms of the extent to which it relies on certain new scripts and technologies. There are two in particular Javascript and Ajax which we note here. (Note that you will not need to know how to use these for this course.. Javascript is a scripting language used in web design to write functions that enhance user interfaces and the dynamics of web pages. Javascript makes pages more interactive by permitting, for example, a web form to validate that the information a user has entered into forms is acceptable before submitting it to a server. Javascript is behind most of the pop-up boxes that we encounter online. Ajax stands for asynchronous JavaScript and XML (dont worry about remembering that) and is a new approach to designing web applications. Ajax is actually a set of technologies, not a single technology, that work together to retrieve data from servers asynchronously (that is, with no timing requirements for the transmission of data). It runs in the background and does not interfere with the display and behaviour of a web page. Whereas a typical web 1.0 page would require you to click a link or submit a form and then wait for a new page to load, Ajax allows users to update content on pages without leaving the page. To give you an idea of how these technologies are being used, web applications such as Googlemail and the photo-sharing site Flickr use Ajax, as does Amazons user-rating system. Another web 2.0 technology that you should be aware of is the widget: a block of executable code that is installed within web pages. Importantly, this code is reusable, often written by third parties, and its content is live and dynamic. Widgets are what make on-screen tools such as clocks, stock market tickers and flight arrival schedules possible. Peer-to-peer networks The traditional internet architecture is the client/server relationship described above, whereby user clients rely on servers to transfer data across networks. However, there are other ways to configure network relationships online. One such innovative architecture is known as peer-to-peer (P2P) networking. P2P networks are composed of users, known as peers, who share their computing resources with other peers, without the involvement of intermediaries such as network hosts or servers. Peers are thus both suppliers and consumers of resources. P2P networks are ad-hoc networks in the sense that new nodes (peers) can be added or existing ones removed without a significant impact on the performance of the network. These architectures are dynamic and distributed. Their distributed nature means that they are more robust than client/server configurations as there is no single point of failure in the system. Figure 2.1 below shows the basic difference between the client/server and peer-to-peer architectures. How do you think each model affects how organisations communicate, operate and coordinate work?
P2P networking was first popularised during the Napster period, when file-sharing first took off, and has yet to lose pace. Napster was originally an online music file-sharing service which operated from June 1999 to July 2001. It was shut down Set 3 of 3 sets of Ebiz study notes Page 122/ 154
over legal claims that it infringed copyright. Its demise led to new, decentralised P2P models for sharing files. The Napster brand was later sold to a file-sharing company offering a pay service. History shows us that these new internet architectures arguably revolutionised the entertainment industry. While the use of peer-to-peer technology as a platform for distributing content such as music and video is very significant to e-business (see SG Chapter 11), we must also consider the other business models and technology applications that can take advantage of peer-to-peer architectures. For example, Skype, the successful start-up company providing a free software application to make voice calls over the internet, runs on a P2P model. It uses P2P networks to transfer its Voice over Internet Protocol (VoIP) data from caller to caller. Cloud computing Related to peer-to-peer networking is the emerging concept of cloud computing. Cloud computing is a general term for anything that involves delivering hosted services over the Internet. These services are broadly divided into three categories: Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS)and Software-as-aService (SaaS). Cloud computing enables users to access and use web applications that reside in vast data centres located around the world instead of on their own personal computer resources. A cloud service has three distinct characteristics that differentiate it from traditional hosting a) It is sold on demand, typically by the minute or the hour; b) it is elastic -- a user can have as much or as little of a service as they want at any given time; and c) the service is fully managed by the provider (the consumer needs nothing but a personal computer and Internet access). A cloud can be private or public. A public cloud sells services to anyone on the Internet. Currently, Amazon Web Services (digital books , music downloads) is the largest public cloud provider. A private cloud is a proprietary network or a data centre that supplies hosted services to a limited number of people. When a service provider uses public cloud resources to create their private cloud, the result is called a virtual private cloud. Private or public, the goal of cloud computing is to provide easy, scalable access to computing resources and IT services. These applications based in the cloud are supposed to benefit from massive on-demand scalability and can be dynamically provisioned to achieve economies of scale, saving businesses money. Importantly, these resources are provided as a service over the internet and are often billed like utilities. In a way, cloud computing resembles previous network architectures. Recall the client/server relationship we covered before. Cloud computing is similar to the client/server architecture in that the cloud consists of a series of high-performance servers that offer content. The difference between client/server models and the cloud computing model is that the software and the data reside on the servers in the cloud, and not on the client machines, as is the case with traditional client/server architectures. The reason for this is that companies offering cloud services believe that users want their information to be accessible from anywhere and available on multiple platforms: mobile phones; across computers at home and at work; and shared with friends, family and colleagues. The idea is to store everything out there so that an employee or work team, for example, can access it whenever and from wherever it is needed. However, with the move to the cloud comes a new set of concerns regarding the possibility of network disruption and data not being available, the security of data that are stored in the cloud, user privacy and others. Many free, web-based email services rely on cloud computing to store users data in the cloud so that they can access it wherever, whenever. Webmail is just the tip of the cloud computing iceberg. What services do you regularly use that employ cloud computing solutions? For a start, think of all the different Google applications that you might use. These are based on
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cloud computing. What others are there? How would you go about finding out where and how their data are stored by the services? Mobile computing and m-commerce So far we have focused on information technologies in terms of personal computers. We typically think of computers as the machines that sit on our desks. However, recent developments in mobile phone technology mean that todays mobile phones are effectively computers. This is interesting because it means that most of us have computers with us wherever we are. This realisation has led analysts to begin exploring the idea of mobile commerce, or m-commerce. There are a wide range of products and services that open up when we begin to treat the mobile phone as a networked computer: Mobile ticketing the replacement of paper tickets with electronic tickets that can be sent to a mobile phone or personal data assistant (PDA) via a text message or short message service (SMS). Mobile vouchers offering discounts to customers directly through their mobile phones. When combined with locationbased services,mobile vouchers can be sent to customers as they pass certain retail areas. Location-based services mobile phone service providers constantly triangulate a users location in a certain area and this location data can be used for marketing purposes (e.g. directing customers to a particular restaurant nearby). Mobile banking using mobile phones to conduct basic banking activities such as transfers, balance checks and payments. Mobile marketing and advertising marketing directly to customers through their mobile phones. Think of some more examples of mobile commerce applications. Are there any limitations to mobile commerce that business should be aware of? Consider the different computing technologies that we as consumers have access to, including desktop computers, laptops, netbooks, e-readers, smart mobile phones, MP3 players and digital cameras, and even recent gizmos such as the iPad. What are the main differences between these various technologies? How did you choose these points of difference? In what ways are these technologies similar to one another? Are we gradually moving towards technological convergence, whereby different gadgets perform the same computing tasks, or are there still important differences between technologies? Remember that our mobile phones are increasingly sophisticated devices, equipped with computer processors, digital cameras and internet capacity. Technologies for supply chain management As well as general-purpose technologies and architectures, e-business technologies are also applied in more specific situations; for example, in supply chain management. When extranets are used to coordinate and manage supply chains (see Chapter 7 of this subject guide), they often involve electronic data interchange (EDI). EDI is a generic term that refers to the structured exchange of data or documents between organisations using information technology. It is a format that predates the internet, with various international technical standards. And despite the current of innovation that has taken place in e-business over the past couple of decades, the EDI format is still widely used by many companies in their supply chain activities. Radio frequency identification (RFID) is a so-called automatic identification technology, which permits the identification of items without direct human intervention. Its predecessor, bar coding technology, relied on line-of-sight transmission of data along the supply chain and often required human beings to intervene in the process. However, by using radio signals, RFID can automate the product identification process, and thus promises many benefits to supply chain management. RFID offers many potential advantages over previous supply chain technologies. For one, by automating the process, it can reduce labour costs. The RFID tags themselves allow significantly larger amounts of data to be stored on the products (e.g. serial number, colour, size, price), leading to better intelligence along the supply chain. Additionally, the tags increase
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inventory visibility for partners and improve response times to customer demands and market trends. RFID also permits asset tracking, which can help reduce shrinkage and, in the case of a product being recalled, allows partners to locate and remove faulty goods quickly. Depending on how it is implemented, RFID can help facilitate item-level tracking, whereby tags are stored in each individual product (as opposed to pallet or case-level tracking). Item-level tracking opens up many opportunities for increased intelligence along the supply chain, for example in terms of theft detection, stock monitoring and product customisation. However, a decision to implement RFID at the item-level must be carefully considered. RFID tags can be expensive,although prices are decreasing as the technology matures. Consider that at any given time, there are thousands if not millions of products moving along the typical supply chain, and you will see that the technology costs can accumulate quickly. The reliability of RFID is also a concern, as certain metals interfere with the radio frequencies used by RFID. Thus, managers in some industries need to understand these technical limitations before choosing RFID for managing supply chains. For example, motorcycles are built with various metal components, and so item-level RFID may prove problematic for their supply chains. Rubee is a similar technology to RFID, with some important differences. Whereas RFID relies on radio signals to transmit data, Rubee uses magnetic signals, enabling it to transmit data through both metal and liquid. This makes Rubee useful for the harsh environments where RFID often fails, for example in warehouses where there are lots of metal structures. However, despite this major advantage, there are disadvantages to using the technology, including slow data transmission speeds and small packet sizes. Its relatively slow speeds make Rubee unsuitable for the warehouse environment where many products are moving rapidly through the building. Nonetheless, it is a technology that businesses are closely watching as a potential supply chain game-changer. The advantages and disadvantages of using RFID or Rubee will always depend on the particular implementation. Organisations have different business objectives which affect their supply chain strategy. If speed or quality of product information is a concern, then perhaps RFID is a good option for supply chain managers. If keeping costs low or minimising information technology investment is a priority, then perhaps RFID is not the best way forward. In such a case, sticking with legacy bar code systems, for example, might make the best business sense. Or perhaps an older EDI-based system is best. At the time of writing this SG (2010), RFID is being introduced into various industries, such as fashion, clothing and fastmoving consumer goods (FMCG), but it is not in general use yet as, for example, some industries are still developing appropriate standards that are essential for communication. A software technology that is particularly important to large organisations, both internally and for communicating along the supply chain, is that of enterprise resource planning (ERP) systems. These are large, complex suites of software that serve to integrate the various common functions (e.g. accounting, production, human resources) and data of an organisation. Considered as internal systems, these are of limited interest to e-business, which is fundamentally inter-organisational. however, using EDI protocols and extranets, the ERP systems of the companies along the supply chain can be connected
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together and hence can talk to each other in order to provide seamless communication between the various departments of different companies. Ciscos supply chain, for example, depends upon interconnected ERPs. Further RFID discussions, please see: http://msdn.microsoft.com/en-us/library/ms954628 ; http://msdn.microsoft.com/enus/library/aa479362.aspx Security technologies for e-business Data security is a top concern for organisations, especially as they continue to invest in new e-business technologies. One important way to secure data is by encrypting it. Based on cryptography, encryption is the process of using algorithms (detailed sets of instructions) to make information unreadable to anyone except those who have special knowledge in the form of a key. This key makes information readable again, through a process called decryption. Encryption can be used to protect data as it moves around networks or while it sits on storage devices. Businesses can use encryption in different ways. Weve already mentioned VPNs, which often use encryption techniques. VPNs work by sending data through tunnels over a shared public infrastructure, such as the internet. Other data cannot enter these tunnels unless they are also appropriately encrypted. VPNs are commonly used by employees of firms who are temporarily away from their home office, for example consultants at a clients site, to gain access to the companys internal networks. Another business application that uses encryption is the digital signature. These are not actually signatures in the normal sense, but rather a way of using mathematical techniques to secure digital messages or documents. Digital signatures provide assurances to the recipient that a message is from a known sender, and that it has not been tampered with. These can be used in financial transactions or other environments where protection against fraud and forgery is important. Transport layer security (TLS) and secure sockets layer (SSL) are protocols for transmitting information privately over the internet. These protocols have many important B2C applications. For example, many websites use them to collect sensitive information such as credit card numbers during online transactions. TLS and SLS use cryptographic techniques to allow client/server applications to communicate data so that the data are impossible to eavesdrop on or tamper with. You might be familiar with these protocols. If youve ever noticed how certain URLs start with https:// then you have experienced SSL in action. We pick up on these security technologies again in SG Chapter 10, where we elaborate on them and also consider how organisational, social, legal and institutional aspects of information security complicate e-business. Conclusion This chapter provides an overview of the main technological architectures for e-business. It describes the basic technological infrastructures which enable network technologies and explains how different protocols enable and support these architectures. Specific emphasis is given to the discussion of supply chain management technologies and to emerging phenomena, such as web 2.0. Security challenges and problems are introduced. This chapter provides an introduction to the background technological knowledge needed to understand more specific aspects of e-business discussed elsewhere in the subject guide.
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Lecture-17: Supporting notes: SG Chapter-9/ New forms of organisation Only those who will risk going too far can possibly find out how far one can go TS Elliot The measure of intelligence is the ability to change - Albert Einstein (But something cant change like sharks cannot stop swimming else they die) Essential reading - Chaffey, D. E-business and e-commerce management. (Harlow: Financial Times/Prentice Hall, 2011) fifth edition [ISBN 9780273 752011] pp. 142, 331-2 - Ljungberg, Jan. Open source movements as a model for organizing, European Journal of Information Systems 9 2000, pp.20816, Abstract: Open source software such as the operating system Linux has in a few years created much attention as an alternative way to develop and distribute software. Open source is to let anyone have access to the source code, so that they can modify it. Open source could be seen as a movement, where communities of highly skilled programmers collectively develop software, often of a quality that outperforms commercial proprietary software. These movements are based on virtual networking on Internet and the web. They are loosely coupled communities kept together by strong common values related to hacker culture. Work seems to be totally distributed, delegated and loosely coupled. The highly skilled members contribute by pride to the collective effort of free software development. In this paper the open source phenomena is investigated from different perspectives. In this paper it is claimed that the open source movements is one key to the understanding of future forms of organizations, knowledge work and business. Read Source for details: read: http://csrc.lse.ac.uk/asp/aspecis/20000077.pdf or http://aisel.aisnet.org/ecis2000/99 - Bughin, J., M. Chui and B. Johnson The next step in open innovation, The McKinsey Quarterly June 2008, pp.19. Abstract: For most companies, innovation is a proprietary activity conducted largely inside the organization in a series of closely managed steps. Over the last decade, however, a few consumer product, fashion, and technology businesses have been opening up the product-development process to new ideas hatched outside their wallsfrom suppliers, independent inventors, and university labs. Executives in a number of companies are now considering the next step in this trend toward more open innovation.1 For one thing, they are looking at ways to delegate more of the management of innovation to networks of suppliers and independent specialists that interact with each other to cocreate products and services. Read source for details: http://www.conceptsl.com/veille/Divers/The%20McKinsey%20-%20The%20next%20step%20in%20open%20innovation.pdf Aims of the chapter The aims of this chapter are to provide a summary of the way in which organisations are changing their structures and using e-business technology and techniques to address the chronic problems that have plagued this area for decades. New technologies facilitate the reorganisation of work and offer new opportunities in terms of where, when and how work is carried out. These new forms of organisation straddle internal organisational structures as well as relationships between firms. Key concepts in this area are: traditional organisational forms and their problems virtual organisations virtual teams and offshoring teleworking and mobile working open source production model problems with new organisational forms. E-Business, the change agent == BPR + MPR ? Learning outcomes By the end of this chapter, and having completed the essential reading and activities, you should be able to: describe traditional organisational forms, such as bureaucratic hierarchies, and the main characteristics of organisations explain the problems of structuring organisations, especially as a result of changing work practices discuss the role technology plays in changing work practices recognise different new organisational forms
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discuss the contribution of e-business technology to changing organisational structures describe how e-business technology can be used to restructure organisations describe virtual organisations and virtual teams, as well as their benefits and drawbacks analyse a new organisational form in terms of its shared principles of membership explain the benefits and drawbacks of off-shoring activities and the role of technology describe tele-working and mobile working, and explain the challenges for the management of these approaches discuss open source production and recognise the contexts in which it is appropriate distinguish between various forms of organising such as mobile work, virtual forums and open source development explain the problems and benefits of the various forms of organising. Introduction to new forms of organisation Organisations and people have been besieged in the last two decades with many innovative, advanced electronic technology. The way people work has changed dramatically, but the way their companies are organised lags far behind . This transformation has been brought about by a variety of changes in the environment in which businesses operate, particularly in communications technology, in the globalization of production and sales, and in the large-scale shift of responsibility to outsiders for what were once considered a company's core functions via outsourcing, joint-ventures and other sorts of alliances that involve a loosening of control over vital inputs. (Details in http://www.economist.com/node/5380483 ) Organisational forms (or structures) have been a chronic problem for companies since the birth of organisations, hundreds of years ago. Every company needs some type of structure to organise its workforce and management, but which structure is the most efficient and the most effective? This is a complex problem, especially for large organisations with huge numbers of staff and multiple functions that span the globe. Similarly, relationships with key external trading partners are not straightforward, as simple market-based relationships have limitations, while joint ventures and other forms of partnership are difficult to organise. As we discussed in SG Chapter 3, new technology and e-business are having an impact in this area, offering new opportunities to change where, when and how work is carried out. Furthermore, for the last 20 years, organisations have been encouraged to focus on their areas of core competence and outsource (to trading partners) many of their previous activities. The General Motors example provides both the pros and cons of traditional and outsourcing firm. In highly competitive and uncertain environments, organisations are under pressure to simultaneously cut costs but also retain sufficient flexibility (or agility) to cope with sudden change. What does this mean for organisational forms? Research conducted by McKinsey (Bryan and Joyce, 2007) suggests that the nature and content of work itself is changing, with a significant move away from both transformational jobs, such as those in extractive industries (e.g. mining and agriculture) and manufacturing, and transactional jobs, like low-level clerical jobs that are easily automatable. More and more people aspire to tacit(i.e. desk-bound, thinking work) jobs, including management, consulting and knowledge work, typically involving complex interactions that require a high degree of judgement. Facilitated by the growth of IT, there has been a huge increase in both the volume and value of interactions such that tacit jobs have been growing three times as fast as general employment and now comprise 40 per cent of the US labour market and 70 per cent of US jobs created since 1998 . In a similar vein, The Economist (2006) finds that organisations themselves have undergone a sea change as the organisation man of traditional bureaucracies has given way to todays networked person. The old command and control mentality of organisations has been replaced by an emphasis on interaction. This can be seen in the way that the long-familiar vertical hierarchies have been swept away and their members regrouped into amorphous (i.e. free forms) teams.
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Yesterdays salary man who sat behind a desk for eight or more hours a day has been replaced by mobile connected knowledge workers who rely on IT, including laptops, mobile phones, Blackberries and video-conferencing, to keep in touch with the organisation. There has also been a growth in professional service firms, such as consultants, lawyers and accountants. In their constant search for innovation, large companies are increasingly pursuing joint ventures with small businesses, individual entrepreneurs and universities or engaging in open source development. All of these developments create a huge demand for information, communication and connectivity. What is the function of an organisational form? Organisations need a structure in order to: create a framework within which the activities and processes of an organisation can be planned, organised, directed and controlled (i.e. similar to management guru Peter Druckers Plan, Organise, Staff, Direct, Control (POSDC)) provide a basis for the division of work and responsibility provide formal reporting relationships, levels of authority and spans of control. In addition, the organisational form serves as a social structure as friendships (and feuds) develop within and between work groups. This is particularly important for individuals in countries where the extended family structure has largely broken down and where people spend much of their time working, such that their workspace becomes their social arena. Traditional organisational forms and their problems For much of the twentieth century, the favoured form for large organisations was the bureaucratic hierarchy, which comprised a complex, multilevel structure where jobs were tightly compartmentalised. They were often based on job functions, such that one arm would be for, say, marketing, another for finance and so on. Such structures, typified by the public sector, were well ordered, in that every manager and employee knew precisely their responsibilities and duties, and to some extent this suits a placid (i.e. free from interruptions) environment. For large multinational companies, these structures would be replicated in different regions of the world, with an extra layer of the same structure at the headquarters. However, they were also very rigid and slow to operate with high overhead costs, as even minor decisions had to be passed a few levels up the hierarchy and collaboration between the various branches of the structure was inefficient and costly. For example, the old monolithic structure of General Motors and this is reflected in figure below, advertising is managed in a separate unit to sales and the rest of marketing and this arrangement reduces interaction between the units, at the cost of both marketing and sales neglecting advertising in their strategies and activities. Such structures are not suited to a dynamic environment as they cannot cope with change. A variant of this form is the strategic business unit, where the hierarchy is broken up into relatively separate (hierarchical) structures, often based on the product line. Marketing and sales division
Marketing groups
sales groups
advertising groups
Small businesses typically start with a highly centralised organisation, such that the founder makes all the decisions (including the colour of the office wallpaper). This is efficient and there are few coordination problems, but, as the company grows, the founder becomes overwhelmed and some form of bureaucracy emerges to spread the management responsibilities.
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The problems of coordination between the different functions in a functional hierarchy became unbearable in many organisations. Functional groups develop little empires and political squabbling for resources often overwhelms attempts at coordination. For example, how can the marketing department market products if they are barely on speaking terms with the production department? One solution, popularised in the 1960s and 1970s, was the matrix organisation, where everyone reported to (at least) two managers. For example, if you worked in advertising for a washing powder for a large multiproduct, fast moving consumer goods (FMCG 1) corporation, you might report to an advertising manager on aspects of company advertising policy and standards, as well as to a product manager for, say, washing powder, on individual promotions as part of the washing powder team see figure below on matrix organisation. Marketing Washing powder Baked beans Cakes Sales Advertising
This aimed to capture the best of both worlds, such that functions, like advertising, could be well managed across the firm but also sufficient attention could be given to individual product lines. However, it is not ideal, especially when the two managers have different priorities and these result in conflicting instructions and confusion. An additional complication for multinational corporations is that the regional dimension has to be added to the functional and the product dimensions, resulting in a complex three dimensional structure. For some industries, like consulting and software development, project teams are often used, such that the project manager has overall control. However, their difficulty is that projects tend to vary in terms of the skills required and hence teams need to be reformed after each project and stability suffers. If your skill is not needed for the next project, you have to sit on the bench until you can join another team. It seems as though each organisational form has its own particular problems, leading to inefficiency, poor coordination and waste. New organisational forms (NOFs) Researchers and practitioners faced with the problems of organisational structure saw the potential of IT, and later ebusiness, to improve coordination and provide opportunities for new organisational forms. Various, slightly different, new organisational forms (NOFS) are described in the literature, including networks, platforms, shamrocks and adhocracies (Miles and Snow, 1992; Rockart and Short, 1991). Such forms are usually based on a smaller, flatter network structure, rather than a hierarchy. NOFS are often ambiguous, in that some people may not be fulltime members, and they are typically fluid, in that people join and leave as requirements change. NOFS are typified by dynamic cross-functional teams of experts set up to solve a particular problem; for example, the launch of a new product line. NOFS also stretch outside the focal organisation to encompass external relationships. These include the appointment of external consultants to an internal team, such that there is a blurring of organisational boundaries as individuals work for a number of separate organisations (e.g. SIM university employs project lecturers rather the traditional fulltime lecturers in most traditional universities) There is also a move to the middle (Holland and Lockett, 1997) where organisations construct structures that are between markets and hierarchies; for example, profit centres involve one part of a company selling services to another part.
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Various partnering strategies, such as outsourcing (e.g. Cisco & Erisson with Flextronics), alliances (e.g. Googles Android with Samsung, HTC), franchising and joint ventures have become popular, where the technology can be used to improve coordination. Within companies, strategies such as the off-shoring of production or research and development involve shifting the activity to another part of the world, often based on cheaper labour costs, and relying on IT to provide coordination. Problems with NOFS (new organisation forms) Although IT and e-business technology offer improved coordination and collaboration, many problems remain: technological inflexibility and dependence inter-organisational relationships especially when problems occur large companies may resort to bullying their smaller partners organisational NOFS offer a certain ambiguity (compared to the traditional bureaucracy), which can be very useful in providing flexibility, but it can also lead to confusion and conflict. Similarly,conventional reward systems and career structures may be sacrificed, leading to frustration and dissatisfaction individual/psychological issues of lost job security, stress, alienation and depersonalisation are common unclear lines of authority with changes in accountability, evaluation and planning respo nsibilities implications for managers NOFS are more difficult to manage than conventional structures. Managers typically suffer from increased role complexity, with the dangers of trying to impose too much or too little control; there is a need for managers to develop new coordinating skills, rather than supervisory ones. data security and confidentiality of document may become an issue over time. Virtual organisations Additional reads: a) Communication processes for virtual organisations by Gerardine DeSanctis, Peter Monge (1998) Abstract: Communication is fundamental to any form of organizing but is preeminent in virtual organizations. Virtual organizations are characterized by (a) highly dynamic processes, (b) contractual relationships among entities, (c) edgeless, permeable boundaries, and (d) reconfigurable structures. Relative to more traditional settings, communication processes that occur in virtual contexts are expected to be rapid, customized, temporary, greater in volume, more formal, and more relationship-based. To glean insight into communication processes for virtual organizations, we draw on the rich body of literature on synchronous and asynchronous electronic organizational communication. The vast set of empirical findings regarding mediated communication can foreshadow how communication will change as firms "go virtual." Six areas of electronic communication research provide implications for the major aspects of virtual organization design: (1) communication volume and efficiency, (2) message understanding, (3) virtual tasks, (4) lateral communication, (5) norms of technology use, and (6) evolutionary effects. see details at http://jcmc.indiana.edu/vol3/issue4/desanctis.html b) Virtual Organisations: Practice & Literature by William W Cooper & Michael L Muench (2000) Abstract: Virtual organisations are defined and identified with an emphasis on electronic technologies that have made possible many of their present capabilities and limitations. The IT age has brought about many changes in the way work is done. Faster and more flexible systems for treating and transmitting information have provided many opportunities for innovations that reduce transaction time or costs and open possibilities for new types and forms of organisations. Details at: http://www.tandfonline.com/doi/abs/10.1207/S15327744JOCE1003_03#preview c) Video on virtual organisations at: http://www.youtube.com/watch?v=GZWRt5C8ANw&feature=related One particular NOF is the virtual organisation, which is a highly dynamic network organisation where the requirements are split from the satisfiers and all are linked through an IT switch (see William Cooper and Michael Muench, 2000). For example, one person detects a need for, say, a new type of software and s/he puts together a virtual organisation of people in different locations who can work together to develop the new software. Such an organisation lacks the traditional organisational attributes in that there is no common workplace, no security of employment and no self-sufficient production line. The members, usually decentralised, market-based e-lancers (electronic freelancers), come together for that
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particular project, remain as long as they are providing a useful function and then leave at the end of the project. Ninetyfive percent of SIM universitys lecturer works fall within this description. The entire project is performed regardless of physical location. The manner in which ICTs are used to create and coordinate a virtual organisation has been explained by Kasper-Fuehrer and Ashkanasy (2004). The relevance of this idea is to understand better ICT as an enabler of such new forms of organising. Shared principles of membership In the absence, or reduction, of traditional workplace attributes, such as a common workplace, NOFS require certain shared principles of membership. According to Rockart and Short (1991), there is a need for shared: goals and priorities decision-making trust, responsibility and accountability technology and culture work and expertise/core competence rewards This is neither easy to achieve nor to sustain, especially when people are simultaneously members of a number of different NOFS. Again, 95% of SIM university lecturers fall under this description. Virtual teams and off-shoring Off-shoring describes the relocation by a company of a business process from one country to another typically an operational process, such as manufacturing, or supporting processes, such as accounting. A virtual team (also known as a geographically dispersed team or distributed team) is a group of individuals who work across time, space and organizational boundaries with links strengthened by webs of communication technology. The rise of globalisation has offered companies attractive opportunities for shifting work overseas, where labour costs are much lower. For example, DBS and Starhub use offshore companies (in Philippines and India) to handle all their customer services calls. Another classic example is software development in India. In many cases, this has been achieved through outsourcing the activity to a separate company but many organisations prefer to keep the activity in-house, albeit on the other side of the world. The latter firms have set up facilities in places like India and taken the activity concerned off-shore. However, it is important to integrate the off-shored activity into the rest of the company, leading to the notion of virtual teams and virtual dispersed working, with some members of a team being in, say, London and others in, say, Bangalore. In the context of off-shoring, the problems of virtual teams refer mostly to: Differing cultures which may involve differing working styles and approaches to learning, authority and deadlines. For example, it appears that Asians have more respect for authority than Europeans do, which can mean that Asians are less likely to question the decisions of managers, for better or worse. Collaboration and coordination while it is relatively straightforward to share explicit knowledge (through documents), assuming there is a common language, the sharing of tacit knowledge (which is not written down) is much more difficult at a distance. Communication deficiency: The biggest disadvantage that any virtual team can suffer from is the lack of efficiency in communication, partly due to constraints in virtual communication mediums Poor leadership and management: Poor leadership can result in the failure of any team Building trust between members of a team thousands of miles apart.
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The issues noted above are exacerbated by the lack of shared physical presence and socialisation. Minor misunderstandings or cultural niceties can often easily be sorted out on the spot in a conventional workplace, but they can build up to major proportions when the only communication is asynchronous across time and space. Example of Afghan and Indian cultures are not easy for western people to fully digest. Excessive dependence upon the technological infrastructure (e.g. the network), in terms of reliability and compatibility. Also, if the documents being exchanged are particularly large, then bandwidth can be problematic. These problems are more likely to be encountered in developing countries than in the west. The conflict in virtual teams that often results from these problems is discussed further in many reports, e.g. 1) by Hinds and Mortensen (2005). Abstract of report: Report elaborated on the results of a field study of 43 teams, 22 collocated and 21 distributed, from a large multinational company. As expected, the distributed teams reported more task and interpersonal conflict than did the collocated teams. Report stated evidence that shared identity moderated the effect of distribution on interpersonal conflict and that shared context moderated the effect of distribution on task conflict. Full report is available at http://www.stanford.edu/~phinds/PDFs/Hinds-Mortensen-OS05.pdf 2) by Bailey (2011). Abstract of report: Since the earliest days of the computer revolution, the lure of the virtual has seduced thinkers, writers, designers, and others with the idea that we might someday accomplish with computers that which we have historically done only physically, thereby potentially allowing us to dispense with the physical. Full report at http://www.stanford.edu/group/WTO/cgi-bin/uploads/2012%20Lure%20of%20the%20Virtual.pdf 3) by a student study research Jacksonville State university. Abstract: The concept of utilizing teams in business is a necessary component of conducting daily operations and addressing changes in the business environment. Moreover, globalization has forced companies to respond, change, and adapt to the ever-increasing volatility of competition in the marketplace. Virtual teams integrate the human element with technology. In our study using an international multi-cultural virtual team experiment between U.S. and Turkish teams, we found cross-cultural relationships, knowledge sharing, technology integration, and time factors to be challenging for communication and end user satisfaction. Lack of cultural training hampered some interactions (report is available on request). Teleworking Wikipedia describes telework (or telecommunicating) as generally refers to any form of substitution of information technologies (such as telecommunications and computers) for work-related travel; moving the work to the workers instead of moving the workers to work. Full discussion by Wiki at http://en.wikipedia.org/wiki/Telecommuting Teleworking, or telecommuting, involves working at home, either full time or part time, and is an idea that has been around for many years, with early pilot projects dating back to 1976. Variants include telecottages,where organisations share a local suburban office space, and remote offices,where firms set up small local branches close to where their employees live. The principle is to use networked IT to send work and information to employees, rather than bringing them in to the office every day. Teleworking has many evident advantages: less time and energy wasted in commuting into city centres reduces traffic related problems like congestion, traffic accident s, greenhouse gases, fuel consumption reduce terrorism targets especially in city centres and improves disaster preparedness reduce spread of illness and diseases improve work prospects of physically challenged workers cost savings by avoiding having to provide each employee with office space increased individual productivity and autonomy less office politics allows parents of young children or carers of the elderly to continue working. In general, tele-working benefits the society in social, economic, environmental and personal aspects.
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For these reasons, tele-working (and mobile working) have become popular in many countries, such that increasing numbers of staff work at home, at least part time. Many companies have introduced hot-desking, where individual offices have been scrapped and staff reserve office space in advance if they intend to come into the office. In some cases, individual offices have been replaced with additional meeting rooms or coffee bars. However, there are various drawbacks to tele-working: motivational depending upon the personality or circumstances of the individual employee, there is a danger of them working too little (due to distractions at home) or working too much (becoming a workaholic) the traditional cultural divide between work and home is lost, such that tele-workers may feel guilty or disoriented by working at home the lack of organisational visibility may dent career prospects without the direct support of the work group, people can become alienated from the organisation and experience feelings of depersonalisation depending on the nature of the work (and the staff), managers may worry about maintaining control over their staff, without direct personal contact practical issues, for example not everyone has suitable accommodation (in terms of space and the correct office furniture) and insurance can be problematic. security issues: corporate data and equipment Mobile working Mobile working is about freedom and simplicity. New technologies are making it easy to access information and work regardless of location. Often, mobile employees are found in the company cafeteria eating lunch while reviewing performance data, in the hallway having an impromptu sales conversation, and in conference rooms two doors down, or across town, or in a different country. The geo-location of a worker has no relationship to the definition of mobile work. Full details at http://www.cobweb.com/pdf/MobileWorkingDTI.pdf The widespread introduction of e-business technology, in the shape of laptops, wireless networks, PDAs, Blackberries, teleconferencing and 3G mobile phones, has dramatically increased the number of potential workplaces, from just the office and the home to the possibility of working anywhere. Many workers, especially consultants and salespeople, have become nomads, working in client sites, hotels and airports and rarely needing to go back to their official offices. Most of the benefits and drawbacks are similar to teleworking but in addition we find: the advantages of being able to work more closely with clients and trading partners. For example sales personnel or staff working at client sites can be in constant contact with firm (be it using a simple video app like Tango-app or WhatApps). the ability to work anytime, anywhere offers a form of flexible freedom at lower cost than tele-working (especially with wifi connectivity) however, work becomes more dependent upon telecommunications, leading to problems when the network is down, as well as the difficulties of real-time communication between different time zones working any time, anywhere can become working all the time, everywhere, leading to excessive stress, alienation and motivational problems as the social life of employees disappears. Open source production Open source development (see Chaffey, Chapter-3 pg142,) has introduced another form of organisation. In this chapter we are more interested in the structure, governance style, and coordination and control habits of open source than the ethical or legal concerns. However, a simple definition of open source is useful open source software is software which brings with it a number of freedoms. The creator of the software must make the source code visible and available so that other interested developers
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(and others) can use, read and modify the code (Perens, 1999). The obligation on the other developers is that if they make any changes to the code base then they too must provide the source code and the other freedoms of visibility to anyone interested in their changed software. The basic principle behind open source is that the more people that can see, read and modify the code the better the software will be, which in turn will benefit all users (for more details see Raymond, 2001). There is a need then to encourage many people to contribute to the code base so that the software grows and becomes more useful to more users. The tricky element of open source production is how to manage a group of people that rarely meet face-to-face, so that they all work on the same software in a productive and gainful manner over time (see Ljungberg, 2000). Most, if not all, of the communication in open source production is carried out via some form of technology, such as discussion forums, email, IRC, etc. The question then becomes: is this really an organisation? If you revisit the ideas discussed above when making sense of virtual organisations and mobile work, you will notice that open source development communities have much in common. Open source communities: communicate via technology come together with the mutual goal of creating some software (technology is the motivating and inspiring factor) have a flatter, decentralised structure have varying hierarchy layers and leadership models ranging from highly democratic to dictatorships seek to control community members via technology such as version control software; but there is also a strong social element to control which is applied through flaming (Flaming is a hostile and insulting interaction between internet users) of developers, ridicule and tough peer review of bug fixes are dynamic and changing where the developers enter and leave the community freely (within the scope of their talent and expertise) are independent of the physical location of developers anyone with skills and bug fixes can contribute (at least in principle) exhibit a culture and work ethic built on reputation and trust relationships. These characteristics provide the workforce with an ability to evolve, be agile and flexible, and can lead to a highly scalable production process that is difficult for traditional organisations to match. However, open source production also has to deal with many issues: Building trust between developers is a long -term phenomenon and is tricky in comparison to a traditional organisation where employees sign contracts and fear being fired if they do anything seriously wrong. Keeping the community together through only technology is not straightforward and can create feelings of alienation in developers who are not part of the core team. The peripheral developers have to work long and hard to be noticed and fit into the community. Promotion is not straightforward in open source production. It is based on merit, trust and long-term expertise building, which must all be done through technical communication. It is the role of technology in open source production and developer promotion that differentiates it (to a large extent) from traditional organisations. Communities are so dynamic that the induction process of open source production needs to match this approach yet it takes a long time for new developers (newbies) to become a part of the community and learn its rules and norms. The most crucial concern of any open source community is to gain a critical mass of developers because, without a workforce that is happy to work on the software, there is no organisation or product. In traditional organisations employees are paid a salary and benefits and have a contract that provides job security but open source developers do not have any of these. Open source developers work for the love of technology, a desire to fix a problem that has bothered them personally or, more recently, as a way to learn new skills (which makes developers more attractive to hire by large traditional organisations).
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Open source development has evolved over time. The fact that it is a dynamic model has helped it to change as problems emerged. Such change has been spurred by increased interest from commercial companies in open source software because there is a promise of cutting costs with low licence costs and the potential for ideas from a large population of developers the ability to harness innovation is strong! We now have traditional companies working with open source communities, thus creating another form of organisation where it becomes more difficult to recognise where the company ends and the community starts. Company employees (salaried) are instructed to help the community develop software and in many cases the open source community members are also given full-time positions in the company. Collaboration is becoming key for communities and companies in order to harness greater innovation (for the companies) and for job security and longevity of the open source project for the open source community. Companies borrow more than just the software of open source communities. An interesting phenomenon is how the open source production model is being emulated by companies to enhance internal circulation of ideas and innovation. Companies like Nokia practise what is known as inner sourcing, which is inspired by the notion of sharing (from open source production)but which is only internal to the company. We speak now of not just code production but the provision of services and goods other than simply software. According to Gartner (2011), more than half of the 517 organizations surveyed by Gartner use open source software (OSS). When the firm first started tracking open source in the enterprise five years ago, only 10% of organizations were using OSS. Decision makers aren't just looking to OSS because it's cheaper - they're also trying to gain competitive advantages through open source. "Nearly one-third of respondents cited benefits of flexibility, increased innovation, shorter development times and faster procurement processes as reasons for adopting OSS solutions," reads the announcement. More than one in five respondents (22%) are using OSS in all departments of the organization, while 46% are using OSS for specific departments. According to the announcement, the top uses for OSS were "data management and integration; and application development, integration, architecture, governance and/or overhaul." Other popular uses were security and compliance, data center modernization and virtualization. Last year, it reported an Accenture survey that found that 40% of organizations planned to migrate mission-critical software to open source within a year. It appears that this might be happening quicker than thought, though Gartner includes non-mission critical deployments in its figures.
This makes open source more widely relevant as the ideas of sharing, governance patterns, control and communication are being translated to areas other than software production. Procter and Gamble (P&G) structured their Connect and Develop method to improve Research and Development (R&D) using ideas of open source, and there are many other examples. Take a look at (http://www.pg.com/connect_develop/pg_innovation/innovation_portal.shtml) the Connect and Develop site for P&G . It is a very interesting mix of showcasing P&G talent but at the same time asking for support and ideas from consumers and users; indeed, anyone and everyone. If you click on Browse P&G Needs you will find a list of products and areas http://www.youtube.com/watch?v=WAH72pRKFR in which this company is looking for external innovations. Watch the videos on this site where different people connected to P&G speak about open innovation and their way of asking for external help. If your innovation is interesting to them then they will license, produce and market it for you. There are other examples of collective production, and pooling of ideas. Undoubtedly you have used Wikipedia at some point in your life. Collective production is inherent in the example of Wikipedia (for more examples see Bughin et al., 2008).
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Crowdsourcing Additional reads: wikipeidias http://en.wikipedia.org/wiki/Crowdsourcing Crowdsourcing is a process that involves outsourcing tasks to a distributed group of people. This process can occur both online and offline. The difference between crowdsourcing and ordinary outsourcing is that a task or problem is outsourced to an undefined public rather than a specific body. As the power of online communities grows ever stronger, it will undoubtedly be useful to look and learn from the experience of others. Here are some examples of crowdsourcing: a) The wiki has been compiled by drawing from a variety of different sources. (crowdsourcing or open source?) b) Microsofts Most Valuable Professionals (MVP) programme the MVP award recognises technical community leaders who voluntarily share their knowledge about microsoft technologies with others c) Ben & Jerrys ice cream feedback on best -selling flavors were born from customer suggestions. Their best concept was the Do the world a flavor competition where fans invented their own variety of ice-cream via the fun online creation station. The results was 10,000 new flavors suggested from US alone. So, why are businesses so interested in crowdsourcing? We know that an engaged community can drive down operating costs by reducing the need for conventional support models. Just as important is that support communities are often able to provide more first-contact resolution (FCR) in the customer service environment. Improvements in FCR can often be attributed to the community unearthing problems and fixes that the company are not aware of. In traditional customer service models this often results in out-of-date knowledge bases, longer more frustrating support calls and ultimately creates more customer frustration and dissatisfaction Conclusion E-business offers a significant opportunity for change in both social and organisational structures, in particular regarding how and where work is done and organised. As such, the technology and associated practices offer tools to address the chronic problem of organisational structure with potentially huge benefits in terms of effectiveness and efficiency. However, despite the promise of healthier organisations, there is also a danger that poorly considered implementation of the technology could lead to fragmented organisations, made up of stressed and alienated individuals. As is often the case with information technology, the technology is relatively neutral and the impact depends overwhelmingly on the significant human and organisational enablers and constraints.
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Lecture-18: Tutorial-6 Questions Q1 to Q4 based on chap-8/Web2.0, Q5-Q6 based on SG chap-2/Technology, the rest are for SG Chap-9/New forms 1. In what ways are web 2.0 technologies different to those of the first generation? Discuss, with examples 2. Social networking sites are purely for leisure purposes and companies should ban their use during working hours. Discuss the validity of this statement. 3. What do you understand by the term web 2.0? Briefly describe the various collaborative components of web 2.0 and show how each one exhibits the participative nature of web 2.0. (2011) 4. Why are many companies beginning to use web 2.0 technologies? Give examples of web 2.0 technologies that companies are exploiting (2012) 5. Discuss the similarities and differences between the internet and cloud computing. What are the main business opportunities offered by cloud computing? Mobile technologies offer new business opportunities. Discuss, with examples, whether mobile technologies can be a real substitute for traditional wired technologies. 6. A B2B company has found that after an initial surge of interest in its intranet and extranet, usage has declined dramatically. The e-business manager wants to achieve these aims: a) Increase usage, b) Produce more dynamic content, c )Encouraging more clients to order (extranet). What would you suggest? 7. Why are organisations increasingly considering new forms of organisation (e.g. network organisations, teleworking)? What are the problems in implementing them? 8. Discuss the benefits and drawbacks of mobile working (2012) 9. What are open source communities in the context of software development? What do they offer in this context? What are the problems in building and maintaining viable open source communities? (2012) 10. Read the essential readings on traditional organisations and open source, and then list all the potential issues that you can think of when two such diverse forms of organisation are encouraged to merge together. Think along the lines of control, communication, structure of both forms, and incentive and sanctions methods. 11. What are the functions (i.e. purposes) of an organisational form (or structure)? Describe the problems inherent in traditional organisational forms. Using one or more examples of new organisational forms, discuss how information & communication technologies (ICTs) are used to address the problems of organisational structure. What problems are often encountered with new organisational forms? (2011) 12. What features and characteristics of virtual communities do you think create an environment where open source production can flourish? Justify your answer.
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Lecture-19: Supporting notes: SG Chapter-10/ Security issues in the digital environment Suggested reading Chaffey, D. E-business and e-commerce management. (Harlow: FT/Prentice Hall, 2011), Chapter 11, pp.62444. West, R. The psychology of security, Abstract: People tend to believe they are less vulnerable to risks than others. People also believe they are less likely to be harmed by consumer products compared to others. It stands to reason that any computer user has the preset belief that they are at less risk of a computer vulnerability than others. Details in http://delta.cs.cinvestav.mx/~francisco/ssi/p34-west.pdf Aims of the chapter The aims of this chapter are to introduce the main concepts of e-business security and, in particular, to explore the distinction between the technical and socio-organisational aspects of security, as well as examining the different goals of ebusiness security. We shall also discuss the role that information security policies play in securing an organisations digital environment and consider the various means of authentication. Key concepts in this chapter include: goals of e-business security technological dimensions of security threats and attacks human and organisational dimensions of security managing e-business security information security policies user authentication. Learning outcomes By the end of this chapter, and having completed the essential reading and activities, you should be able to: identify and explain the major security threats explain security protocols and practices distinguish between technical and human and organisational security threats discuss the strategic nature of security polices distinguish between the various authentication technologies and discuss their strengths and weaknesses. Introduction E-business security deals with the matter of planning and managing security within and around computer systems (i.e. firms operations, customers data, contingency planning) in e-business contexts. It is therefore both a technical and a managerial matter. In fact, to truly understand potential security threats to their businesses, security managers must understand both the technological glitches and threats that might occur, as well as the social and organisational weaknesses that arise. To date, researchers and practitioners have mainly concentrated on the technical aspects of security (such as encryption, firewalls, viruses and data protection), paying less attention to the human component. This is despite all the evidence that shows that the greatest threats to organisations information systems come from within the organisations themselves; that is, as a result of poor policies and practices. We must thus consider people as a key factor in managing e-business security, in addition to the technological factors see also West (2008). E-business security is therefore both a technical and a social issue. This chapter discusses these two dimensions and presents the main instruments and techniques used to manage the complex security environments around and within information systems that make e-business possible. As the problems of e-business security are very similar to those of most large scale information systems, we use the terms e-business and information systems security synonymously in this chapter.
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Five goals of information systems security As with other information systems, the security of e-business deals with five main goals: integrity: guaranteeing that data are not modified without authorisation confidentiality: ensuring that only authorised individuals have access to the information resources being exchanged availability: guaranteeing that information is available when it is needed non-repudiation: guaranteeing that someone cannot deny his or her participation in a transaction (e.g. when a seller falsely denies receiving payment for an eBay transaction) authenticity: ensuring that data and transactions are genuine. To achieve these goals, technological and organisational procedures need to be put into place so that failures are minimised. Technological dimensions From a technological viewpoint, many distinctions can be made when addressing the problem of security. The first and most simple distinction is between the technical layers that are taken into account when the security strategy is designed. There are different ways of layering information security, but for our purposes we can understand information systems security on three levels: the computer security layer, the network security layer and the internet security layer. Their main characteristics are: Computer security layer Securing the computer involves ensuring that machines are installed with up-to-date anti-virus software or hardware. Anti-virus software is software used to prevent, detect and remove malicious software (short form: malware) such as: computer viruses, spywares, worms, trojan horses. However, most antivirus hardware solutions are focus more on e-mail filtering, and some scan all HTTP and FTP traffic. Computer security layer can also involve the regular backing-up of data in the case of data loss or computer failure. Network security layer Company intranets should be secured using appropriate network architectures, including the use of firewalls. A firewall can either be software-based or hardware-based and is used to help keep a network secure. Its primary objective is to control the incoming and outgoing network traffic by analyzing the data packets and determining whether it should be allowed through or not, based on a predetermined rule set. Network architecture refers to the layout of the network, consisting of the hardware, software, connectivity, communication protocols and mode of transmission, such as wired or wireless. Internet security layer Encrypting data as it is sent along the public internet is a fundamental aspect of information security. Encryption is the conversion of data into a form, called a ciphertext, that cannot be easily understood by unauthorized people. Decryption is the process of converting encrypted data back into its original form, so it can be understood. Encryption/decryption is especially important in wireless communications. This is because wireless circuits are easier to tap than their hard-wired counterparts. This also includes the use of digital signatures (which involves a public key, private key and hashing algorithm, see details in http://www.youdzone.com/signature.html) , which are a method of proving that a message is from a particular sender and also that is has not been tampered with in transit. Threats and attacks What can possibly go wrong with the security of e-business firms? Every organisations e-business systems face a number of different threats and potential attacks which can cause serious financial and management issues: Denial of service (DoS) attacks Malicious users flood a system with so many requests that it overloads, breakdown, and fails. These attacks are common, and when a companys site is attacked it can result in reputational harm, along with monetary loss. A famous example of a denial of service attack is the one directed at Georgian government websites in the lead-up to the countrys short-lived war with Russia in 2008. Despite suspicions that the Russian government was behind the attacks, which knocked out the National Bank of Georgias website among others, the identity of the attacker was never
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conclusively determined. Prolexic and AT&T are examples of the worlds largest and most trusted distributed denial of service (DDoS + Dos) mitigation service provider. They have successfully blocked complex DoS and DDoS denial of service attacks. Web page hijacking Fake copies of trusted websites are created and used to redirect web users to malicious websites. A browser hijacker is usually a malicious web browser plug-in that modifies web browser settings in order to change default home, search or error page and redirect a user to undesirable Internet sites. A browser hijacker also can record all web pages the user visits and send gathered information out through a background Internet connection. Practically all browser hijackers are created for commercial, advertising or marketing purposes This technique is commonly used by spammers. IP spoofing - also known as IP address forgery or a host file hijack, is a hijacking technique in which a cracker masquerades as a trusted host to conceal his identity, spoof a Web site, hijack browsers, or gain access to a network. Here's how it works: The hijacker obtains the IP address of a legitimate host and alters packet headers so that the legitimate host appears to be the source. When IP spoofing is used to hijack a browser, a visitor who types in the URL of a legitimate site is taken to a fraudulent Web page created by the hijacker. For example, if the hijacker spoofed the Library of Congress Web site, then any Internet user who typed in the URL www.loc.gov would see spoofed content created by the hijacker. Phishing Trying to fraudulently acquire information such as usernames, passwords and credit card details from users by pretending to be a trustworthy partner (such as a bank, online payment broker, helpdesk, etc.). Phishing emails may contain links to websites that are infected with malware. Phishing is typically carried out by e-mail spoofing or instant messaging (instant messaging (IM) is a form of communication over the Internet, that offers an instantaneous transmission of text-based messages from sender to receiver in push mode) E-mail spoofing is the forgery of an e-mail header so that the message appears to have originated from someone or somewhere other than the actual source. Distributors of spam often use spoofing in an attempt to get recipients to open, and possibly even respond to, their solicitations. Botnets Involves hijacking large numbers of computers connected to the Internet, for the purposes of creating a zombie network that can be used to send spam or propagate viruses. In other words, Botnet a collection of a large number of computers connected to the internet being controlled by a user or automated software and being used for malicious purposes like stealing passwords and launching other kinds of denial of service attacks over the Internet. Malware Stands for malicious software, which is designed to install itself on a computer without the users permission. Malware includes adware (unwanted software that generates advertisements on the computer screen), spyware (which secretly collects information about the user and sends it to other computers), hijackers (which take control of different parts of the web browser, such as the default home page and search bar) and unwanted toolbars in the browser. See http:// arstechnica.com/security/news/2004/11/malware.ars for an extended discussion of malware. Viruses Computer programs that can install themselves on a computer and propagate through a network. Viruses typically have harmful intent, doing damage as they spread by corrupting or deleting files. Worms Similar to viruses, but they can spread without human intervention. These often do damage by consuming network bandwidth. Trojan horse A type of malware that pretends to perform a desirable function but in fact grants system access to unauthorised users. Rootkits Programs that enable backdoor access to a computer, usually without the users knowledge. Another way of looking at threats is in terms of the likelihood that they will actually harm an organisations e-business. That is, not all threats occur as frequently as others. PCtools explains that a rootkit is a type of software designed to hide the fact that an operating system has been compromised, sometimes by replacing vital executables. Rootkits allow viruses and malware to hide in plain sight by disguising as necessary files that your antivir us software will overlook. Rootkits themselves are not harmful; they are simply used to hide malware, bots and worms. Chaffey Chapter 11 presents the most common security breaches in large business organisations. He shows us that infections by viruses or malicious software are a lot less likely than staff misuse of technology, which is another type of security risk. This reaffirms the argument that social factors are just as important to e-business security as technical issues.
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Human and organisational dimensions One of the major concerns regarding technological models of information security is the weak emphasis placed on human, organisational and social factors. For example, while a good encryption system might be in place for employees to secure sensitive data, they might simply ignore it or choose not to use it because it is too cumbersome. As such, these models neglect the socio-technical dimensions of e-business security. E-business systems are, indeed, designed, developed and used by humans. Humans design the systems, operate them and execute their tasks using computers. The problem of security of corporate information systems therefore needs a much more holistic approach to the planning and management of information systems security. It requires consideration of the social context within which the technology is implemented and used for further reading, see Anne Adams and Martina A Sasse (1999) Users are not the enemy in which the authors provides arguments that the user is not the enemy is a response to the widespread authoritarian approach to security that views users as the enemy within, producing clashes between security concerns and users goals and work practices.
All the threats listed above can be severely reduced if users are aware of the risks that they pose and have been properly trained to identify them and act accordingly. However, many companies choose not to provide such training, occasionally because they do not see the immediate benefit. Likewise, at company level, e-business companies often fail to implement secure transaction systems because they are a costly investment. Such short-sightedness can prove very expensive, in terms of both monetary costs and reputational costs. Managing e-business security Security is thus a central managerial challenge for every company that engages in e-business. WHY? Besides actual and potential financial losses, information systems security abuses or breaches can have other very dangerous consequences for businesses, such as negative publicity, competitive disadvantage and even reduced organisational viability. A company struggling with information systems crippled by security problems is not a healthy business and will be seen as an unattractive partner. As e-business makes companies more open to network- and internet-based relationships, it increases the potential threats to internal information systems coming from outside the organisation. When associated with the increased accessibility to computers across the globe, increased computer user sophistication, and the availability of advanced software tools, it becomes clear that there is an increased risk of information systems security abuses accompanying the increased diffusion of information and communication technologies globally. Hence, management needs to pay more attention to information systems security issues. However, this can be challenging to achieve in practice because very often information security is not considered to be a high priority by management. This means that information security policies and strategies need to be seen by managers as being vital to organisations. Such policies and strategies form the basis of protection against the risks associated with security breaches.
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Information security policies Wiki states Information security means protecting information and information systems from unauthorized access, use, disclosure, disruption, modification, perusal, inspection, recording or destruction. The terms information security, computer security and information assurance are frequently used interchangeably . Information Systems are decomposed in three main portions, hardware, software and communications with the purpose to identify and apply information security industry standards An information security policy can be defined as the general guiding statements of the goals to be achieved to guarantee the integrity, confidentiality, availability, non-repudiation and authenticity of data within corporate information systems. This definition is broadly in line with the international standard on information security management (International Standards Organisation (ISO) 27002, 2005), which states that an information security policy document should provide management direction and support for information security. This document typically includes a general description of managements commitment to the implementation, maintenance and improvement of its information security management system. It is backed up by a specification of the general technological and organisational means and procedures put in place to achieve these objectives. The critical role of information security policies in preventing, detecting and responding to security breaches has become increasingly apparent, leading to consensus that such policies must be a central focus of any information systems security plan. There is a growing consensus within both the academic and practitioner communities that a strong information security policy is the best basis for the dissemination and enforcement of the information security strategy within the organisational context. A strong information systems security policy is therefore at the core of every information security management strategy. Following the documentation is provided by ISO (http://www.iso.org/iso/home/standards.htm ) which for most parts are similar to OECD guideline on protection of privacy (details: http://www.oecd.org/internet/interneteconomy/oecdguidelinesontheprotectionofprivacyandtransborderflowsofpersonaldata.ht m . The ISO list of specific issues to be addressed by every information security includes: 1. Personal usage of information systems: The information security policy should clearly articulate all employees rights and responsibilities in their use of the organisations information systems. These users are fundamental to any policy and so they must fully understand how their actions might affect the organisation. 2. Disclosure of information: Information systems increasingly give employees direct access to significant amounts of information much of which may be confidential. The security policy must therefore highlight any restrictions with regard to the disclosure or use of such information. 3. Physical security of infrastructure and information resources: It has been noted that equipment should be physically protected from security threats and environmental hazards. It is therefore important that the policy explicitly articulates how infrastructure and information resources are to be protected. Many organisations produce what are known as disaster recovery plans in order to ensure the security and availability of systems during natural or human-inflicted disasters. 4. Violations and breaches of security: The policy document must indicate the steps that are to be taken to recover from a breach or violation and the requirements for recording such security incidents.These steps might also form part of an overall disaster recovery plan. 5. Prevention of viruses and worms: The rapid proliferation of viruses, worms and trojans presents an increasingly potent threat to the security of corporate information resources. The organisations policy must be clear regarding the application of virus-checking software, the use of attachments and the sharing of information. 6. User access management: It is considered good practice to control users access to information based on sound business and security requirements. The information security policy should therefore provide a clear statement regarding the business requirements needed to control access to systems.
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7. Mobile computing: The use of computers, laptops and mobile technologies away from the traditional working environment must be clearly regulated, as they are more difficult to protect using conventional security controls. The policy must consider practices that should be adopted to ensure that business information is not compromised. 8. Internet access: It is important that the policy explicitly addresses the issue of internet access and restrictions on browsing and other online activities. As we noted in Chapter 8, the increased use of web 2.0 technologies by employees increases the risks to information security. 9. Software development and maintenance: As many security problems can be directly attributed to errors and oversights in the development of information systems, the policy must present guidelines for ensuring that effective security controls and procedures are built into the software of all new systems. 10. Encryption: Encryption is a fundamental aspect as electronic commerce has increased the amount and value of information that is being communicated across public and potentially insecure networks. The organisations requirements for encrypting such information must therefore be clearly addressed in the information security policy. 11. Contingency and continuity planning: It is essential that all organisations have a contingency plan in place to cope with and recover from a significant security breach. The information security policy must specify how such contingency plans are to be written, tested, maintained, revised and, ultimately, implemented. The implementation of the information security policy is itself a very challenging process. The information systems security policy is in fact a statement which needs to become embedded in the daily organisational practice of the business. Very often, a policy is clear, linear and well framed, but the organisation still suffers from security breaches. This is the outcome of more general problems related to the implementation of managerial plans in organisations. Good planning is one thing, but until employees pay attention to policies and incorporate them into their day-today routines, breaches will continue to occur. User authentication Usability & Security by Martina Sasse see slides details in: https://docs.google.com/viewer?a=v&q=cache:YMcSm9PfW6wJ:dimacs.rutgers.edu/Workshops/Tools/slides/sasse.ppt+Ada ms+and+Sasse&hl=en&pid=bl&srcid=ADGEESiidaypgkDcGa5W2Lx42MGMnkrS9fFqL3QsRLkbzdHp9su8ZB1yte_mWJ yWdZs__YxZngs_pxfAxnzzBtTh7cBduhnWKSHl7048kI4IA6wyH7HjzByKkTPYLrn6LMo6SeM65iVa&sig=AHIEtbR6T4 TA0fzVZSRXiE-Z-nuriKq83Q. A major issue for organisations, especially in online environments, is how to control access to certain systems that might contain confidential, privileged or business-sensitive information. This is the authentication problem alluded to in the section on the goals of information systems security. Various technologies exist for authentication. A good way of classifying them is in terms of their relation to the user: 1. authentication with something you possess 2. authentication with something you know 3. authentication with something you are or something you do. The best example of the first type of user-authentication (possession based) is the use of tokens or ID cards by employees. Employees who need to access a private company network are often required to enter a code from a secure token that generates random codes at regular intervals. Likewise, employees trying to access rooms in company buildings where sensitive information is stored on servers are regularly required to authenticate themselves using an access card. The main problem with these technologies is that they are easily lost and can be used by unauthorised agents. Anyone who gains possession of the token or ID card has the right to access the system or facility, which creates a weakness in the authentication process.
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A different logic applies when it comes to passwords, personal identification numbers (PINs) and cryptographic keys. These are things that a person knows, rather than something they physically possess (until they write them down, of course, which they usually are not supposed to do!). Some firms demand very stringent password changes which make it impossible for the customers to remember, except to write them down on papers! For example, iOCBC demands their clients change their password every 3 month without repeating any of the passwords used earlier. The password must contain no adjacent repeating letters or numbers, and must be at least 8 characters long with at least two of them in numbers or alphabetic !! This put off the clients who will eventually migrate to other competitor sites as was the case of the author who migrated to DBSvOnline. We are all familiar with the problems with passwords. They are easily shared and easily forgotten, which introduces risks to the security of the information system. Passwords and PINs work well in many business contexts, such as checking electronic mail, but if security is a top concern, then a more reliable system must be devised. Such a system needs to overcome the weaknesses of passwords and PINs. It must address the practices or mistakes that users make which compromise systems. One way to do this is to combine two or more means of authentication, such as a user token plus a PIN. This is called two-factor authentication. These authentication mechanisms are more secure, but they do not eliminate all the risks that users introduce. A very secure solution is provided by authentication technologies which rely on users unique bodily characteristics. These are known as biometrics. Biometrics can be either physiological (that is, measurements of the body) or behavioural (that is, measurements of a humans actions). Physiological measurements include facial recognition, fingerprinting, handprint recognition, vein pattering, iris patterning and even DNA profiling. Behavioural biometrics include measuring signatures, keystroke dynamics (that is, the uniqueness of someones typing), gait (how someone walks) and speech or voice. Biometrics is a new technology and its e-business application is not yet commonly used. It is, however, expected that in the near future these solutions will become more common. Costs and technical problems still affect the diffusion of these solutions. Data integrity Data is vulnerable to degradation e.g. the loss of quality, particularly during the input phase. Control procedures are needed in order to: prevent errors where possible detect the errors that have not been prevented correct the errors that have been detected One popular data control is the check-digit detect technique used on key fields like student id, citizen id, purchase order-no. Such key fields must possessed 100% data integrity at all time whether during data capture, storage transfers, and event of sabotage. The Singapore national id card number takes the suffix alphabet as the check-digit. It uses a modulo 11, weights = {2,7,6,5,4,3,2} against a check-digit table list of { 1:A,2:B, 3:C, 4:D, 5=E, 6:F, 7:G, 8:H, 9: I, 10:Z, 11: J}. Conclusion This chapter discusses the major aspects associated with security in e-business. The chapter presents and discusses the major security threats. Perhaps the main theme that underlies the whole chapter is the distinction between technological and human and organisational aspects of e-business security.
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Lectures-20 & 21:Supporting notes - SG Chapter11/ Conclusion & implications of e-business strategies Essential reads - Chaffey, D. E-business and e-commerce management. (Harlow: FT/ Prentice Hall, 2011) fifth edition. Chapters 5. - Claudio U. Ciborra: Teams, markets and systems: business innovation and information technology. (Cambridge: Cambridge University Press, 1996) [ISBN 9780521574655] Chapter 1 (Cognitive models of man, organisation and information) and chapter 6 (Transaction-cost analysis of information systems). Abstract: Despite the waves of re-engineering, there is still a gap between the opportunities offered by IT and the progress of the business transformation. New forms of IT offer an increasing variety of network-based applications that range from groupware to electronic commerce, but its applications lack a sound understanding of the link between organisational processes, information and technology. The book provides a new set of concepts and methods to design new forms of business organisation around the latest network infrastructures. IT can indeed be harnessed to shape businesses, and the effectiveness and quality of working life of teams. - European Union on competition anti-trust laws: http://ec.europa.eu/competition/antitrust/overview_en.html Abstract: Competition is a basic mechanism of the market economy and encourages companies to provide consumers products that consumers want. It encourages innovation, and pushes down prices. In order to be effective, competition needs suppliers who are independent of each other, each subject to the competitive pressure exerted by the others. The antitrust area covers two prohibition rules set out in the Treaty on the Functioning of the European Union. The antitrust area covers two prohibition rules set out in the Treaty on the Functioning of the European Union. First, agreements between two or more firms which restrict competition are prohibited by Article 101 of the Treaty, Second, firms in a dominant position may not abuse that position (Article 102 of the Treaty). Preview A new business strategy involves evaluation of all aspects of firms operations and environment, i.e. technologies, economics, and management aspects. For our Ebiz studies, we are not very concern over how to use or implement the new technologies but more so the impact on the economics and management aspects (e.g. resources/budgeting - Marketing, scheduling - SCM, procurement, customers - CRM) for a given e-business strategy. Hence, a discussion of e-business strategy is not complete without the inclusion of the firms marketing, CRM, SCM, and procurement strategies Aims of the chapter The principal aims of this chapter are to summarise the subject guide as a whole and to discuss briefly the implications of ebusiness technology and practice for firms business strategies. In other words, we have argued that e-business is important for commercial companies, in both theory and practice. In many instances, it represents a major change in the way they carry out their business and thus becomes a strategic challenge. This chapter discusses how firms should go about harnessing e-business for their own benefit. It also considers briefly the nature of strategy and presents a number of case studies of actual e-business strategies. Learning outcomes By the end of this chapter, and having completed the essential reading and activities, you should be able to: integrate the previous nine chapters into an all-round understanding of e-business explain how the various components of e-business fit together in the context of a commercial company discuss the nature of strategy explain how companies use a strategy to adopt e-business explain how the underlying economics of e-business is transformed into a strategy discuss examples of e-business strategies. Summary of the subject guide This subject guide has covered a very large amount of territory, from the developments in technology through the underlying economics of exchange to the management challenges of the twenty-first century. In studying this course, you need to build
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up a detailed knowledge of each component, as we have laid them out in each chapter, and also understand how these components fit together in business practice. This section summarises the preceding chapters from the perspective of integrating them together in the context of firms business strategies. It is certainly not a substitute for the detailed study of each chapter and this is only one possible summary. Other summaries could be produced that focus more on theory, societal change, human behaviour or numerous other perspectives. Nevertheless, we have chosen to summarise and integrate on the basis of strategy as this seems relevant to most students. While working through this chapter, you are encouraged to turn back to individual chapters to ensure that you follow, and internalise, the logic of the argument made here. The initial chapter sets out the rules of the game by summarising the learning outcomes of the course and showing you how to approach the material covered by the subject guide, the recommended textbook (Chaffey), the other essential and further reading and the activities contained within the guide. It gives a brief argument for the importance of e-business, based on the short history of the phenomenon, and emphasises the speed and dynamism of the continuing development of the field. Unlike much information technology that has become commoditised and institutionalised, e-business technology and practice is still changing radically as the technology and its users, entrepreneurs and consumers, companies and governments, interact together within various societies. E-business is a multi-faceted phenomenon comprising strong technological, business, management and social dimensions. E-business strategy Chaffey devotes a whole chapter-5 to e-business strategy and you should read it carefully. The first point to note is the nature of a strategy. Chaffey, as shown in his diagram, states that developing an e-business strategy requires a fusion of existing approaches to business, marketing, supply chain management and information systems strategy development. In addition, companies need to apply innovative techniques to achieve competitive advantage with a mentality of innovate or die. Chaffey defines it as the definition of the future direction and actions of a company defined as approaches to achieve specific objectives(pg.241). It is a companys sense of purpose or direction and it should not be confused with a plan. A strategy is at a much higher level than a plan and normally a strategy will lead to a number of plans; the strategy sets the direction for more detailed step-by-step plans. Note that a strategy must contain specific objectives but needs to incorporate
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considerable flexibility in order to cope with a fast-changing environment. A strategy is needed in order to seize opportunities, avoid organisational drift, to ensure a single direction for the company and to reduce uncertainty, conflict and duplication. We are happy to subscribe to Chaffeys definition of e -business strategy as definition of the approach by which applications of internal and external electronic communications can support and influence corporate strategy. Because of the importance and pervasiveness of e-business, the e-business strategy needs to be an integral part of the corporate strategy. Michael Porter exhorts that the key question is not whether to deploy internet technology corporations has no choice if they want to stay competitive but how to deploy it (e-business) It follows that the e-business strategy document is often not a long document as it does not contain detailed plans or timelines. It is the overall direction (the what) whereas the plans set out detailed implementation (the how) of the strategy. When considering an e-business strategy, it is important to highlight the underlying economics of e-business as it is these fundamental aspects that must be leveraged for the company to benefit. It is surprisingly easy to forget these key forces when trying to develop an e-business strategy for a traditional marketplace. As we argue in SG Chapter 4, e-business is all about innovation (in products, services, processes or business models) and being able to translate the underlying, fairly abstract, economics into a feasible strategy that will receive the support of managers, staff, customers, trading partners and investors. Earlier articles that discuss the difficulties of designing strategies that somehow combine business, innovation and information systems include Ciborra (1996), Jarvenpaa and Ives (2009) and Lee and Clark (2009),while Porter (2001) and Porter and Millar (1985) tend to be more optimistic. However, it is important to note that the latter texts were written before e-business became the everyday tool that it is today. The formulation of an e-business strategy, Chaffey presents a strategy process model, which is similar to others in the literature. It breaks down the process of strategy formulation into four stages: 1. strategic analysis (Chaffey, from pg241) 2. objectives (Chaffey, from pg 267) 3. definition (Chaffey, from pg 275) 4. implementation.(Chaffey, from pg 291) Strategic analysis is a systematic evaluation of the current situation, both internally within the company, and externally within the market it is a picture of where we are now. The internal analysis includes a review of the existing e-business resources (including hardware, software and networks, (see diagram on example for a B2B)) and a portfolio analysis of where in the company e-business is, or will be, strategically important. It also incorporates a SWOT (strengths, weaknesses, opportunities and threats) analysis, as well as a review of the human and financial resources available, including skills and organisational structure. The external analysis focuses on competitors and is based on Porter (2001) and analyses the impact of e-business on: the bargaining power of buyers the bargaining power of suppliers the threat of substitute products and services barriers to entry rivalry among existing competitors.
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This includes the threats of new digital products and new business models, as well as the changing (either increasing or decreasing) role and power of intermediaries.
Having analysed the current situation (the as-is), companies should then move on to setting objectives where they want the company to be in the future. This includes defining the vision and mission of the company, and Chaffey (2009) includes examples of vision and mission statements from various well-known firms.
Setting realistic objectives involves an appreciation of how e-business can create business value in this particular company and it is here in particular where an understanding of the underlying economics of e-business comes into play. Chaffey refers particularly to: Adding value through improved products or services or from using information to improve customer relationships. Reducing costs through efficiency savings (e.g. reduced inventory within the supply chain). Managing risks improved information can reduce uncertainty. Creating a new reality through the innovation of new business models, services or processes. The objectives (e.g. increased market share) should be quantified (e.g. market share increases from 5 per cent to 10 per cent) through the use of key performance indicators, which should be closely monitored throughout the implementation of the ebusiness strategy. The third of Chaffeys stages, e-business strategy definition, involves selecting the options (in terms of approaches) that are most likely to achieve the objectives. These include: Determining the e-business channel priorities (i.e. upstream or downstream and avoiding cannibalisation from existing channels). Market and product development deciding which market segments to focus on and which new products to develop. Positioning and differentiation deciding how to differentiate from competitors (e.g. on price, quality or service). Selecting an appropriate business, service and revenue model . Marketplace restructuring this refers to the position of middlemen and may involve disintermediation or infomediation. Set 3 of 3 sets of Ebiz study notes Page 150/ 154
Supply chain management the integration and structure of the supply chain. Internal knowledge management the provision of knowledge and information to staff within the company. Resources and capabilities whether these are already available internally or whether they need to be acquired, perhaps through partnerships or joint ventures with other companies. Finally, the strategy needs to be implemented, which requires drawing up detailed plans in all of the above areas, implementing the plans and carefully monitoring their progress. This is particularly difficult in a dynamic environment like e-business, where there may be radical changes in: customer tastes and behaviour technology developments capabilities of trading partners availability of resources, especially skills and investment capital legal frameworks (e.g. copyright laws) competitors actions product and service developments especially from new entrants to the market. Check out Chaffey chapter-5 pg292, lists eleven critical success factors of e-Business strategy implementation.
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Case studies From the above discussion, you should appreciate the difficulties in formulating an e-business strategy and, furthermore, you should understand why such strategies, no matter how well considered, often fail in practice and/or produce a totally unexpected result. You should now refer back to Chapter 4, where we discuss the case studies of various B2C companies which had to change their initial strategies but did so very successfully (e.g. eBay). The following 2 cases are excellent examples of strategic change, driven by e-business. The first one examines the transformation of the music industry, where the entire industry structure has been changed beyond recognition through the application of e-business technology and practice. The second example refers to the e-business strategy of a large car manufacturer, which failed in its original implementation. Case study 1: The transformation of music retailing through B2C innovation + Activity page (UOL SG page 125) Case study 2: AutoCorp + Activity page (UOL SG pg 127) Conclusion In this chapter, we summarised briefly the preceding chapters of the subject guide and argued that e-business: presents companies with both opportunities and risks is a complex mixture of technological and non -technological issues that interact together to create uncertainty for companies is highly pervasive, affecting entire organisations and their value chains. On this basis, we argued that companies need an e-business strategy and we discussed the nature of such a strategy and the processes that most companies follow to formulate the strategy. We then argued that strategic issues can best be appreciated by referring to case studies.
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Lecture-21: Tutorial-7 Questions (Q1-4 are based on chap-10/security, from Q5 based on chap-11) 1) Discuss the role of technology in enforcing information systems security. Explain why more investment in IT does not always lead to more secure information systems. 2) Discuss how and why biometrics can solve many security related IT problems. Explain, with examples, whether there are any shortfalls in biometric security based systems 3) Discuss the main technical and security related problems in internet based e-business activities. Critically discuss with examples (2011). 4) Discuss the main organisational threats to e-business security. Support your answer with examples (2012) 5) For each of the above six generic sell-side strategies, identify a good example of a company that has successfully adopted that strategy. 6) Imagine you are a consultant whose job is to design a new B2B strategy in a firm which intends to open a buyer oriented marketplace. Which factors would you consider in advising the firm whether it is worthwhile pursuing such a strategy? Justify your answer theoretically (2012). 7) You have been asked, as a consultant, to begin work on an e-business strategy for a new pure-play, online, businessto-consumer retailer. What areas would you examine regarding this strategy? For each area, briefly discuss an issue that you feel is likely to be important in this context (2012). 8) Why do companies formulate e-business strategies? Briefly outline how companies usually go about formulating these strategies. What are the main problems involved in e-business strategy formulation? 9) What is an e-business strategy? Which aspects of a companys business should it cover? Who should be involved in its preparation? Justify your answer. 10) How does e-business strategy differ from traditional business strategy? Note for Q5: Six Generic e-business sell-side strategies Attack e-tailing aggressive competition, usually based on low prices. Defend e-tailing competing on aspects other than price. End-to-end integration optimising the supply chain through using e-business to reduce costs, increase quality and reliability and cut delivery times. Market creation using B2B exchanges within the supply chain to continuously improve the value chain. Customer as designer allowing customers to personalise the product or service through using the technology. Open source value creation using open source production to solve internal shortcomings or problems.
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Management & Innovation of E-Business IS3167, 2790167 (2011)
Appendix-1: Past Exam Papers BSc degrees and Diplomas for Graduates in Economics, Management, Finance and the Social Sciences, the Diplomas in Economics and Social Sciences and Access Route for Ext Students Management and Innovation of e-business 2790167 Zone-A: 10 June 2011 Candidates are required to answer any THREE of the following SIX questions. All questions carry equal marks.
1. Shopping is not the same as procurement. What does this statement mean in the context of e -business?
Discuss the impact this has on business-to-consumer e-business. How can e-business retailers counteract this problem? Illustrate your answer with examples. Effective supply chains depend upon the close integration of companies within the supply chain. Discuss how this has been achieved, making use of examples in your answer. What do you understand by the term web 2.0? Briefly describe the various collaborative components of web 2.0 and show how each one exhibits the participative nature of web 2.0. What are the main strategic reasons to support supplier oriented market or intermediary oriented market strategies in B2B (business-to-business)? Discuss making use of examples in your answer. In the literature, the impact of IT on markets is either seen as a reason for the reduction of the number of intermediaries or as a reason for an increased role played by intermediation in the exchange processes. Discuss. Transaction costs can be described as frictions in the market. How can ICT (information and communications technology) reduce these frictions? Discuss the theoretical model of transaction costs and explain how and why ICT can reduce or increase transaction costs.
2. 3. 4. 5. 6.
2790167 Zone-B: 10 June 2011 Candidates are required to answer any THREE of the following SIX questions. All questions carry equal marks. 1. What is the general online value proposition for business-to-consumer e-business? Illustrate this value proposition by applying it to one particular sector (e.g. books). Describe the problem of channel conflict and cannibalisation. How can retailers alleviate this problem? Uncertainty is often seen as the key problem for supply chain management. Why is this so? What types of uncertainty exist in a typical supply chain and what implications does uncertainty have for the design of a supply chain? What are the functions (i.e. purposes) of an organisational form (or structure)? Describe the problems inherent in traditional organisational forms. Using one or more examples of new organisational forms, discuss how information & communication technologies (ICTs) are used to address the problems of organisational structure. What problems are often encountered with new organisational forms? The impact of ICT on markets has been traditionally described in terms of disintermediation. Why have many authors recently argued in support of the idea that ICT increases the role played by intermediation in the exchange processes. Discuss, making use of examples in your answer. Discuss the main obstacles to B2B (business-to-business) e-commerce. Justify your answer with examples. Discuss the main technical and security related problems in internet based e-business activities. Critically discuss with examples.
2.
3.
4.
5. 6.
Appendices
A1
2790167 Zone-B: 27 Feb 2012 Preliminary Candidates are required to answer any THREE of the following SIX questions. All questions carry equal marks. 1. 2. 3. 4. 5. 6. What is B2B e-business? Discuss with examples the main advantages and risks of this business strategy? Supply chains benefit from cooperation between companies within the supply chain. Discuss how cooperation in supply chain can be facilitated and supported by ICT making use of examples in your answer. Do social networks reduce the costs of customer segmentation? Justify you answer using examples. When do ICT offers new market opportunities for intermediaries? Justify your answer using examples. What are the main security threats of business-to-consumer e-business? Describe the phases of the transaction lifecycle. Critically analyse, using examples, how ICT can reduce the transaction costs associated to ONE of these phases.
2790167 Zone-A: 23 May 2012 Candidates are required to answer any THREE of the following SIX questions. All questions carry equal marks. 1. Imagine you are a consultant whose job is to design a new B2B strategy in a firm which intends to open a buyer oriented marketplace. Which factors would you consider in advising the firm whether it is worthwhile pursuing such a strategy? Justify your answer theoretically. 2. Discuss the main human threats to e-business security. Support your answer with examples 3. Discuss why e-marketing can be considered a threat to privacy. Suggest how this threat can be reduced. 4. Business-to-consumer (B2C) e-business is now some seventeen years old in the more mature markets of Europe and North America. Why does it only account for a relatively small share of total retail sales in these markets? 5. Why are many companies beginning to use web 2.0 technologies? Give examples of web 2.0 technologies that companies are exploiting. 6. Discuss the benefits and drawbacks of mobile working. 2790167 Zone-B: 23 May 2012 Candidates are required to answer any THREE of the following SIX questions. All questions carry equal marks 1. Imagine you are a consultant whose job is to design a new B2B strategy in a firm which intends to open a supplier oriented marketplace. Which factors would you consider in advising the firm whether it is worthwhile pursuing such a strategy? Justify your answer theoretically. 2. Discuss the main organisational threats to e-business security. Support your answer with examples. 3. Online revenue contribution can be considered a key objective of an e-marketing plan. What are the factors that contribute to a companys online revenue? Support your answer with relevant examples. 4. Why is website design an important aspect of business-to-consumer (B2C) e-business? Make use of examples in your answer. 5. Compare and contrast the business models adopted by social networking sites that are free to users. 6. What are open source communities in the context of software development? What do they offer in this context? What are the problems in building and maintaining viable open source communities? Study guides Sample exam Qs 1. Why is supply chain management of growing importance in many industries? What are the problems with traditional supply chain management? Discuss how computer-based information systems are used to address these problems. 2. Companies engaged in business-to-consumer (B2C) e-business need to understand shoppers, technology and their industry. Discuss with examples. 3. What are the characteristics of most new organisational forms? Why are organisations adopting these forms? What are the implications for managers? What is the role of information systems in new organisational forms? Give examples.
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4. You have been asked, as a consultant, to begin work on an e-business strategy for a new pure-play, online, businessto-consumer retailer. What areas would you examine regarding this strategy? For each area, briefly discuss an issue that you feel is likely to be important in this context. 5. It has often been argued that information and communications technology (ICT) is disintermediating electronic marketplaces. Infomediaries are however increasing in electronic markets. Discuss with examples. 6. Transaction costs can be described as frictions in the market. How can ICT reduce these frictions? Discuss the theoretical model of transaction costs and explain how and why ICT can reduce or increase transaction costs.
Appendices
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(IS3167) MANAGEMENT AND INNOVATION OF E-BUSINESS (2012 Academic Year)

Management & Innovation of E-Business

Lect13/14: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

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parties will optimize .

exists in the forms of

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(Various frictions exist in these stages)

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Lect13/14: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

to Notes, page 100 the stages for the 2 screen-

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How is ICT a mediating technology and an intermediary?

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End of Lectures 13-14

Lect13/14: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

Lect 15: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

Lect 15: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

Lecture 16: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

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Lecture 16: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

Lecture 16: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

collaboration Promote participation How are these achieved?

Lecture 16: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

Lecture 16: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

Lecture 16: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

Lecture 16: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

Lecture 16: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

Lecture 16: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

Lecture 16: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

Lecture 16: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

Purposes of securing data transmission Cryptography TLS and SSL protocols

Lecture 16: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

End of Lecture 16a & 16b

Lecture 16: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

Lecture 17: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

Lecture 17: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

Lecture 17: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

..current traditional organisational forms would not suffice (although relevant)

Lecture 17: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

Lecture 17: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

Lecture 17: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

Lecture 17: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

Lecture 17: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

Lecture 19: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

Lecture 19: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

Lecture 19: EBIZ - Mgt & Innovation eBusiness(by JackKoh)

Lecture 19: EBIZ - Mgt & Innovation eBusiness(by JackKoh)