1

E-Business |Paper P3 | Sir MAK E-business

The transformation of key business processes through the use of internet technologies

E-commerce
If there is a financial transaction involved with the electronic process using internet technologies it is e-commerce. For e.g. online shopping Aspects of e-commerce 1. 2. 3. 4. 5. Electronic ordering of goods Online payments Electronic funds transfer Commercial auctions Direct consumer marketing and after sales services

Benefits of E-business
Increase revenue Reduce costs Channel efficiency for e.g. online distribution Gain visibility Control and automate customer and partner facing operations

E-commerce is divided into four main categories B2B B2C C2B C2C business to business business to consumer consumer to business consumer to consumer

Changes in the channel structures due to e-business and e-commerce

Disintermediation
The removal of intermediaries in a supply chain that formerly linked a company to its customers for e.g. using internet to sell rather wholesalers, distributors, retailers etc

Re-intermediation
Establishing new intermediary roles in place of older intermediaries For e.g. 1. 2. 3. 4. Search engines Portals E-tailers Malls

E-Business |Paper P3 | Sir MAK

5. 6. 7. 8. Auction sites Publisher web sites Forums Financial intermediaries

Countermediation
The creation of a new intermediary by an established company in order to compete via ebusiness with established intermediaries for e.g. companies opening their own retail stores Business models for e-commerce (RAPPA) 1. Brokerage model those that bring buyers and sellers together 2. Advertising model to provide business advertising 3. Infomediary model collecting data about consumers and their purchasing habits and selling the data 4. Merchant model selling goods and services as traditional retail 5. Manufacturer model direct selling by the creator 6. Community model --- users investing on website

Supply chain
Supply chain encompasses all activities necessary for transformation of goods from raw materials till its consumption by final consumers Push model supply chain Production based on sales forecasting Leads to over stocking or shortage High product obsolescence Low reliance on IT support

Pull model supply chain Production based on customers request (e.g. JIT) Reduced overstocking or shortage Reduced product obsolescence Focus on customer service High reliance on IT (communication, integration)

Impact of IT on value chain Inbound logistics: 1. Inventory management softwares 2. Just in Time 3. Bar coding

E-Business |Paper P3 | Sir MAK

Outbound logistics: 1. 2. 3. 4. Ordering and sales system Electronic point of sale E commerce Electronic fund transfers

Operations: 1. Process control software 2. Computer Aided Manufacturing software 3. robotics Marketing and sales: 1. E-marketing 2. Customer relationship management software After sales services: 1. Customer complaints tracking softwares Procurement: 1. E-procurement 2. Supplier databases 3. Emails Technology: 1. Computer Aided Design 2. Robotics 3. R&D software HR: 1. Intranet 2. E-training 3. E-attendance Firm infrastructure: 1. MIS 2. Expert system 3. Data warehousing and mining

E-Business |Paper P3 | Sir MAK

Impacts of technology on supply chain

E-procurement (upstream supply chain)
E-procurement means purchases through internet technologies Done through emails, websites, extranets etc. Advantages: 1. 2. 3. 4. Faster Wider choice Reduced stock levels Cheaper

Disadvantages: 1. 2. 3. 4. Limited suppliers using internet Risk of unauthorized purchase Data security Privacy, fraud, unreliable

CRM (Downstream supply chain)

The following are the main ways in which e-business can affect an organisations relationship with its customers. Tiein/ switching costs. A good ebusiness arrangement can make customers reluctant to switch supplier. For example, time and effort might have gone into automating most of a customers purchase transactions. If this works well, not only would customers not want to switch away from an efficient process, but there would be expense and disruption if they did. Ecommerce can lead to disintermediation. In this process intermediate organisations (middlemen) can be taken out of the supply chain. The process of reintermediation is also found, i.e. new intermediaries are introduced to the value chain, or at least to some aspects of it. Countermediation is where established firms create their own new intermediaries to compete with established intermediaries. Continual updates products, prices, news. Easy, fast, cheap, twoway communication. User communities. The users of some complex products, such as software, set up user communities where members help each other and where pressure on the product supplier can be organised. Strong user communities are valued by their members and the organisation would be wise to look at the comments and queries on the bulletin boards. Tracking customer internet activity and buyer habits. Every click on a website can be recorded and analysed. Customer preferences can be acted on. Customers can specify precisely the features they might want in their product.

E-Business |Paper P3 | Sir MAK E-Marketing

Marketing using electronic technology

E-Business |Paper P3 | Sir MAK

E-marketing and 6 Is

E-Business |Paper P3 | Sir MAK

E-Business |Paper P3 | Sir MAK

Customer Relationships Management CRM