This document discusses various topics related to e-business including: - The differences between e-business, e-commerce, and traditional business. E-business encompasses more than just online selling. - The rise and fall of the dot-com economy in the late 1990s, and the importance of fundamentals like profits. - Successful hybrid "bricks and clicks" models that combine online and offline strengths. - The phases of e-business development and need for ongoing investment to fully integrate online capabilities. - Potential benefits of e-business like increased revenues, reduced costs, improved customer retention and brand. - Growth of online insurance and financial advice, with advice expected to remain primarily human-assisted.

1. e-Business

2.  e-Business vs e-Commerce vs Internet
 What makes e-Business different from business?
 The rise and fall of the dot.com economy
 Successful models for e-Business
 The drivers of benefit for e-Business applications
 The value of Brand with e-Businesses
 The potential for e-Business in Insurance and high
quality on-line Financial Advice

3. E-Business:E-Business:
Improving businessImproving business
performance through low cost andperformance through low cost and
open connectivity:open connectivity:
• New technologies in the value chainNew technologies in the value chain
• Connecting value chains across businessesConnecting value chains across businesses
in order to :in order to :
• Improve service/reduce costsImprove service/reduce costs
• Open new channelsOpen new channels
• Transform competitive landscapesTransform competitive landscapes
E-CommerceE-Commerce:
• marketing
• selling
• buying of products and
services on the Internet
e-Business vs e-Commerce
e-Business is more than selling and marketing online!

4. ImplementImplement
OpportunityOpportunity
AnalysisAnalysis
Re-Re-
AssessAssess
Understand BusinessUnderstand Business
ImplementationImplementation
PlanningPlanning
‘‘Traditional’:Traditional’: ImplementImplement
OpportunityOpportunity
AnalysisAnalysis
Re-Re-
AssessAssess
Understand Electronic BusinessUnderstand Electronic Business
ImplementationImplementation
PlanningPlanning
‘‘E-Business’:E-Business’:
Definitions of the future are ‘fuzzy’
Permanent and unpredictable change in the
business and technology environment
Time to market and speed are major competitive factors
Continuous learning & fast adaptation is required
Characteristics of an “Electronic Business
journey”:
Definitions are clear
No change in the business and technology
environment
High time pressure
Continuous learning
Traditional business organization
‘develop step by step’:
e-Business vs Business
E-Business is not a project - but rather a journey that requires vision and non-linear procedures

5. Experimentation and Learning
Supplier network Customer network
Customer
service
Outbound
logistics
Sales
Marketing
Product
development
Inbound
logistics
Production
Procurement
Being a
Connected EnterpriseEmerging e-Strategy
Short Strategy Formulation loops
Continuous experimentation through specific Solutions
Prototyping
awareness
learning
learning

6. 1997-1999 - e-Business Mania Strikes!
 E-Business becomes a major economic force
 NASDAQ hits 5,000
 Venture capital in abundance
 Focus on new economy, new business models, growth
potential
 no attention to traditional fundamentals
 bricks and mortar viewed as liability
 Traditional businesses shake in their boots at the threat
of new non-traditional nimble bold competitors
 Dot.Com start-ups in every field
 Dot.Com multi-millionaires made over night

7. B2Band B2C - Huge Potential
The Projected Canadian
Electronic Commerce
Market
0
20
40
60
80
100
1997
1998
1999
2000
2001
2002
2003
Source: IDC
Cdn$Billion
Business to Consumer
Business to Business
The Projected US
Electronic Commerce
Market
0
200
400
600
800
1997
1998
1999
2000
2001
2002
2003
Source: IDC
US$Billion
Business to Consumer
Business to Business

8. Online Retail Sales - Likewise!
Growth of Online Retail Sales (US)
$0
$5,000
$10,000
$15,000
$20,000
$25,000
1997 2001
Source: Forrestor
$USMM
Books & Music
Travel
Entertainment
Ticket Event Sale
PC Hardware & Software
Apparel & Footware
Financial Services
CAGR
42.9%
53.7%
44.9%
124.3%
73.5%
83.4%
63.0%

9. 2000 - The Dot.ComBubble Bursts!
 The Demise of Dot Com Retailers. Weak financials, intense competition, and
investor flight will drive many of today's online retailers out of business in 2000.
Those that survive must refocus funding on building hard assets to achieve scale,
service, and speed.
 Wall Street will run out of patience. Financial markets exasperated with non-existent
online profits will turn a deaf ear to persistent "investment mode" rhetoric and soundly
punish merchants who bleed red ink. Recent stock disasters like Value America and
eToys -- whose market caps as of January 11, 2000, are down $3.1 billion and $7.7
billion respectively from 1999 highs -- serve as bad omens for online stores that lack a
unique approach or technology.
 The revenge of the brick-and-mortars will begin. The narrowing of the playing field
in 2000 will rationalize but not resolve online retail competition. It will usher in a new
era characterized by a few large players that exploit deep customer relationships and a
presence across multiple channels to entrench themselves. To measure their success,
these firms will ditch new economy platitudes in favor of unfashionable old metrics
like margins, profits, and customer retention costs.
ForresterResearch, 1999/2000

10. Valuations Plummet
Amazon.com- AMZN
Priceline.com- PCLN
Pets.com- IPET
eBay.com- eBay

11. Same Trend in Canada
1-year trend

12. Learned
Fundamentals important, bottom line important
Traditional bricks and mortar assets can
represent significant competitive strengths
 logistics, inventory, distribution
 choice in terms of customer access
 strength and brand
e-Business becomes an element of overall
business strategy - not the total business strategy
e-Business still widely seen as a way of
transforming business operations and thinking

13. ‘Bricks and Clicks’ - A Hybrid Model
Traditional
“Bricks and Mortar”
Pure Web - Dot.com
“Clicks”
Hybrid
“Bricks and Clicks”
Combines strengths
fromtraditional and
pure Web approaches

14. Emergence of the Hybrid Strategy

15. Phases of e-Business Development
Four stage model in E-Business maturity relates business value to e-business leverage
E-Business Leverage
BusinessValue
Enabler
Driver
Convergence
Transformation
Channel
Over 50% are in the channel
phase of
E-Business development
with a web presence but no
infrastructure tie-in.
Over 50% are in the channel
phase of
E-Business development
with a web presence but no
infrastructure tie-in.
Just under 15% are in the
integration phase.
Connections to suppliers
and customers are fully E-
Business enabled.
Just under 15% are in the
integration phase.
Connections to suppliers
and customers are fully E-
Business enabled.
Brochureware
and buying /selling
Integrate with
customers
and suppliers
Industry transformation,
achieve competitive
advantage
Cross-Industry
Supplier/Customer
convergence
Integration
Source: PricewaterhouseCoopers

16. Phases of e-Business Development

17. The Journey Requires Investment
Significant multi-yearinvestment predicted

18. The Journey Requires Investment
Significant multi-yearinvestment predicted

19. The Benefits of e-Business
 Generate additional Revenues
 New markets
 New products
 New customers
 Reduce Costs (Integration and ‘Collaboration’)
 Process efficiency
 Reduce IT variety and -complexity
 Synergies with other initiatives
 Customer Retention (‘Added Services’ and ‘Virtual Community’)
 Know more about your customers
 Integrated channel management
 Proactive and personalized offerings
 Improve Image / Position Brand
 Applying innovative technologies
 Leadership enterprise
 Address younger customer segments
 Not to miss the boat
 Keeping options open
 Acquire know-how
 Focused investments

20. e-Business and Brand
Research from Mainspring…
 Online financial services customers are initially
motivated by price sensitivity, but that influence
declines as they realize the benefits of convenience
 Brand is more important online than offline
 When researching insurance purchases online, 56% of
customers went straight to name-brand sites as compared
with 32% for aggregation sites.
 When initiating a purchase online, 60% went to name-
brand sites as compared to 32% for aggregation sites.

21. Online Insurance
Growth of Internet-Enabled Insurance
(US)
0
200
400
600
800
1000
1200
1997 1998 1999 2000 2001
Source: Forrestor
US $
MM
Other
Auto
Homeowners
Life

22. When will you offer financial advice online?
0 10 20 30 40 50 60
Now
< 1 year
1 to 2 years
> 3 years
Don't know
%
Source: Forrestor
Why will you offer financial advice online?
0 10 20 30 40 50
Competitive pressures
Help customers make
decisions
Enhance customer
relationships
Customers want online advice
To improve our online
offering
%Source: Forrestor
Online Advice

23. Online Advice vs Face to Face
 Forrester: Few financial companies believe that online advice will
replace the human advisor. Except for a small group of low-end, self-
directed customers, consumers are expected to continue to seek
advice from financial advisors. More than half of our respondents
believe that online advice solutions will never be a compelling
alternative to working with one of their advisors, even as the
technology improves.
 Almost half of financial institutions believe that online advice will
enable advisors to deliver additional value to their customers.
 As automated advice vendors piece together the elements of the new
advice creation process,we believe that use of online advice will
surge.“
 Customers don ’t care about the data-entry and number-crunching
aspect of advising -- they pay for the conversation they have after the
analysis is done. These online solutions will enable our advisors to
spend more time with their customers.” (Insurer)