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A project report on e business

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A project report on e business

  2. 2. DEPARTMENT OF MANAGEMENT CERTIFICATE This is to certify that the dissertation/project entitled ______________________________ submitted by Mr. /Ms. ___________________ bearing Pin No._______________ on this ___ day of ______ 20__ in partial fulfilment of the requirements for the award of the Degree of Master of Management Studies of University of Mumbai, is a bonafide work to the best of my/our knowledge and may be placed before the Examination Board for their consideration. _____________________ ____________________ Mr. / Mrs. _______________ Mr. / Mrs. _______________ Internal Examiner External Examiner ______________________ _________________ Mr Nishant Kaushik_______________ Mr. _______________ Dean-Academics Director
  3. 3. Certificate of Undertaking I Pramod Verma hereby declare that project entitled “Report on E-Business “ Undertaken at Alamuri Ratnamala Institute of Engineering and Technology by Pramod Verma Seat No. _______ in partial fulfillment of Master of Management Studies (Management) degree (Semester III) Examination, is my original work and the Project has nor formed the basis for the award of any degree, associate ship, fellowship or any other similar titles, either in Mumbai University or any other University of India. ( Pramod Verma)
  4. 4. REPORT ON E-BUSINESS 4 ACKNOWLEDGEMENT I express my sincere thanks to my project guide of prof. “Mahendra Nagle”. Coordinator at ARMIET college for M.M.S section who has been guiding Force to my project “Report on E-Business ”. I am also thankful to my all professors to their Support and encouragement in finding out the appropriate data for this Project report, without their thankless support and efforts, making this support would have been impossible for me. I would also thanks the whole respondent who Provide me the best knowledge and for their help and cooperation Throughout the project. Pramod Verma
  5. 5. REPORT ON E-BUSINESS 5 EXECUTIVE SUMMARY OF E-BUSINESSES In looking over the challenges identified above, one certainly could ask, “So what is really different about e-business?” Overall, the answer that firms have faced most of the challenges identified in the past, and that this simply represents the latest iteration of these challenges. Organizations have faced the challenge of integrating autonomous businesses. A Considerable literature has grown up around all of the problems in managing projects. Any technology-based firm must deal with developing people skills among their Technical managers, be they engineers, financial analysts, or software developers. Managing across generations is certainly not a new issue. And both the job churn and the ensuing talent shortage are inherent in any technological revolution. Thus, again, what’s new? We argue that two factors distinguish managing people in an e-business today from managing in a brick and mortar business. The first factor distinguishing e-business from traditional business is the complexity of the problem. What seems different about managing e-businesses today stems from the Interaction of facing all of these challenges simultaneously. While organizations may have faced each of these challenges before, they have probably never faced so many challenges at the same time.
  6. 6. REPORT ON E-BUSINESS 6 This creates a level of complexity seldom experienced before. A second, more important set of factors was noted explicitly by the respondents. In fact, when pressed on these issues, respondents agreed as to the distinctiveness of two of the challenges: Uncertainty and speed. Virtually every person we interviewed first noted that the biggest change in moving to e- business is the speed. Things happen so much more quickly, Requiring faster organizational response than they had ever faced before. Second, while fewer noted it specifically, the uncertainty challenge was at least implicit if not explicit. They noted the concern with not knowing for sure how to manage in the present environment that was accentuated by uncertainty regarding what might happen next. It seems that the combination of uncertainty regarding the way in which certain factors will change in the future with the People in the E- Business WP 00-11 increasing speed at which they will change presents the most formidable management challenge unique to an e-business. Thus, managing an e-business today requires dealing with an unusual amount of complexity, uncertainty, and dynamicity. This certainly requires a new paradigm for organizing in terms of how the structure, processes, and people of the firm are managed. However, before discussing this new paradigm, we will first examine the different evolutionary paths taken by different e-business.
  9. 9. REPORT ON E-BUSINESS 9 INTRODUCTION AND RESEARCH METHODOLOGY INTRODUCTION: This turn towards Internet based technologies generated a new status quo in the business world. E-business was defined by IBM back in 1997, as “the transformation of key business processes through the use of Internet technologies”. According to Chaffey (2002), e-business is described as “all the electronically mediated information exchanges, both within an organization and with external stakeholders, supporting the range of business processes.” E-Business enables an enterprise to spread its wings to the global customer. To extend the sales platform to a futuristic dimension, business houses have incorporated software that can run on platforms offered by the World Wide Web. E-business has now penetrated into consumer goods and other production and service based industries. IPSR solutions' Web Application Division has proven expertise in creating customised solutions that can manage web based Business Logistics perfectly. The following chart explains our service platforms.
  10. 10. REPORT ON E-BUSINESS 10 SHORT HISTORY OF E-BUSINESS Despite the fact that e-business is a relatively new trend in the business sector, its brief history is filled with controversial events. The rapid growth of the popularity of the Web from 1995 was accompanied by a highly profitable period for e-business companies. Setting up a fully functional e-Business website was very easy and cost efficient and at that time it was thought to guarantee success and profits (O’Connor and Galvin, 1998; Janenko, 2003). The number of e-businesses kept growing in an attempt for everybody to have a share from the profit pie. On the turn of the century, their number reached its peak and their profit opportunities and potential financial growth was capped. This led to the huge stock market collapse of many e-business companies which is known as dot.com bust. After a five year period where companies had to revaluated their strategic approach towards e-commerce, growth of e-businesses started to increase again, reaching double digit level through the current period.
  11. 11. REPORT ON E-BUSINESS 11 LIMITATIONS OF E-BUSINESS SYSTEM:- The limitations of e-business can be classified as technological and non- technological. TECHNICAL LIMITATIONS OF ELECTRONIC OMMERCE:  Lack of sufficient system is standards, reliability, security and communication protocols  Not enough telecommunication bandwidth  "The software development tools are still evolving and changing rapidly"  Integrating the Internet and electronic commerce software with current databases and applications difficultly  Additional cost to request special Web servers and other infrastructures, in addition to the network servers  Possible problems of interoperability, that means some e-business software or applications does not fit with some hardware, or is incompatible with some operating systems or other components
  12. 12. REPORT ON E-BUSINESS 12 NON-TECHNICAL LIMITATIONS:  Lack of feel and touch online  Many complicated legal issues  Rapidly changing and evolving e-business  Lack of support services  Insufficiently large enough number of sellers and buyers  Breakdown of human relationships  Inconvenient and expensive accessibility to the Internet
  13. 13. REPORT ON E-BUSINESS 13 OBJECTIVE OF E-BUSINESS:-  Improve service.  Save time. -Time taken by customers. -Elapsed time for process.  Reduce process errors.  Reduce the cost of core service provision.  Free staff to provide value added services.  Improve morale -give people the tools and time they need
  14. 14. REPORT ON E-BUSINESS 14 ADVANTAGES:- The benefits of implementing E-Business tools is not so much in the use of technology, as in the streamlining of business processes and the ease in finding new markets. Some of the advantages include:  quicker and easier communications.  strengthened marketing capabilities and reach  increased hours of operation (a website provides 24 hour 7 day information to existing and potential customers)  access to broader information through research  reducing the cost of doing business by lowering transaction costs and increasing efficient methods for payment, such as using online banking and reducing stationery and postage costs.  the opportunities to adopt new business models and develop tailored customer support.
  15. 15. REPORT ON E-BUSINESS 15 SCOPE AND FOCUS OF THE REPORT:- The scope of E-Business is as wide as an ocean & there by the implementation hurdles. When one thinks of the Electronic Business even through final goal remains the same as that of the traditional business, but the way in which they function in order to improve the performance is different. As information sharing is the major part of the corporate industries, networking has given boost to E-Business. This change in view-point has opened door for new opportunities. Nationalized and Private banks agrees that adopting e-business as a strategy is one of the important steps the banks has taken in its development due to the tremendous benefits e- business adoption provides. According to them their perceived benefits include convenience to customers, speed and quality of service, reduction of queues in banking halls and reduction in the total overhead cost such as reduction in employee recruitment and reduction in space for clients and customers .These factors that pushed their drive to adopt e-business. A) The research provides powerful, real time E-Business reporting to help E- Business managers improve merchandising and increase sales. B) The research is very much useful to get the lifetime value of your customers based upon their acquisition source, and increase your expenditures on sources that generate the best customers over lifetime. C) It tracks the performance of all your online marketing initiatives, including Pay - per- click keyword buys, doing transaction online, paying bills using net banking, banner ads, e-mails and affiliate programs and also how it is effective to implement.
  16. 16. REPORT ON E-BUSINESS 16 D) It helps the E-Businesses to convert visitors into customers. E) It helps to determine whether online competitors can significantly Harm your business by providing some of the value you currently Offer customers in the traditional way. It helps the managers to improve the business by enhancing their functionalities as compared with their competitors.
  17. 17. REPORT ON E-BUSINESS 17 LITERATURE REVIEW: INFORMATION IS POWER This is one of the most widely accepted statements and applies for every aspect of human activity. Internet is an unlimited pool of information and benefits anyone who uses it properly. According to Porter and Millar (1985) information gives competitive advantage to a company in three different ways: a) By changing industry structure and changing the rules of competition. b) By providing companies with new ways to outperform their competitors. c) By creating new businesses, even from within a company’s existing operations. The authors continue by discussing the strategic significance that Information Technology has obtained for companies, by affecting the value chain, thus the technological and economic activities that a company performs to do business. Not only it transforms the value chain, but also transforms the product or the service that the company produces. Additionally, authors suggest five ways for Information Technology to be successfully implemented in business processes. This can be done by: a) Assessing the intensity of information. b) Determining the role that Information Technology will have in the industry structure. c) Understanding the ways that it can create competitive advantage for their companies. d) Investigating the possibilities of new businesses. e) Developing a strategic plan to take advantage of Information Technology.
  18. 18. REPORT ON E-BUSINESS 18 SUCCESS AND FAILURE FACTORS OF E-BUSINESS “E-business and E-service will move to the forefront of technology priorities. To take full advantage of the E-service, you need to look at your organization from an alternative perspective. The question is how to deal with these changes, at what cost, and at what speed. This is not the time to worry about "disintermediation". It is the time for cooperation, integration, and the consideration of customer loyalty, profitability and competition advantage.” As we have seen, e-Business has noticed remarkable growth and success over the last years. Despite the numerous examples of successful e-Businesses there are many examples where e- Business failed to succeed. By looking at those characteristic examples, this report tries to understand the factors that lead to a successful e-Business but also to figure out the dangers that may lead to failure. These factors would form a helpful guideline, which would help in making the IT employment website as successful as possible.
  19. 19. REPORT ON E-BUSINESS 19 HYPOTHESIS: E-business offers buyers and sellers a new form of communication and provides an opportunity to create new marketplaces. Theoretical studies suggest in general that the development of e-business results in higher firm performance as a result of lower search and head-to-head comparison costs. However, there are a number of recent theoretical studies, which demonstrate that the growth of e-commerce may lead to monopolistic pricing behaviour so that firms engaging in e- commerce need not perform better compared to more Traditional enterprises. To date, there exists little empirical evidence on the impact of information technology on economic performance. This paper is the first that uses a large representative data set of Belgian firms to study empirically the impact of e-business on corporate performance. OUR MAIN CONCLUSIONS CAN BE SUMMARIZED AS FOLLOWS: (1) The penetration of the Internet in firms is high , however, the use of e-business is still limited. (2) It is especially the large firms that engage in ebusiness and mostly in e-procurement. (3) E-business has no effect on total factor productivity in small firms , however, we find positive effects on performance of e-business in large firms.
  20. 20. REPORT ON E-BUSINESS 20 COLLECTION OF DATA (PRIMARY & SECONDARY DATA) Data source Primary Secondary Questionnaire Survey Observation Experimental Internal External Internet Published data Sales records Marketing activities Cost information feedback Newspaper Books Private studies Electronicprinted
  21. 21. REPORT ON E-BUSINESS 21 E-BUSINESS – TRANSACTION MEDIUM Most e-commerce is done over the Internet. But EC can also be conducted on private networks, such as value-added networks (VANs, networks that add communication services to existing common carriers), on local area networks (LANs) or wide area networks (WANs).
  22. 22. REPORT ON E-BUSINESS 22 E-BUSINESS – TRANSACTION TYPES (E-commerce transactions can be done between various parties.) • Business-to-business (B2B) • Collaborative commerce (c-commerce) • Business-to-consumers (B2C) • Consumers-to-businesses (C2B) • Consumer-to-consumer (C2C) • Intra-business (intra-organizational) commerce • Government-to-citizens (G2C) • Mobile commerce (m-commerce)
  23. 23. REPORT ON E-BUSINESS 23 HOW IS E-BUSINESS DIFFERENT  Reduction in physical boundaries and distance.  Serve larger customer base more efficiently.  Target specific customer groups.  The Internet is an interactive marketing medium.  More detailed information on customer transactions.  Improved transaction efficiency.
  24. 24. REPORT ON E-BUSINESS 24 CONSUMERS TO CONSUMERS (C2C) Abbreviation for consumer-to-consumer commerce; that is, commerce with no middle business people The most notable examples are Web-based auction and classified as sites. Most large venues for such models (for example, eBay and Classifieds2000) are quickly permeated by consumers who participate so actively and regularly that they become small businesses for them. C2C stands for consumer to consumer electronic commerce. The Internet has facilitated new types of C2C although it is important to note that this kind of commerce -- in the form of barter, yard sales, flea markets, swap meets, and the like -- has existed since time immemorial. Notably, most of the highly successful C2C examples using the Internet actually use some type of corporate intermediary and are thus not strictly "pure play" examples of C2C.
  25. 25. REPORT ON E-BUSINESS 25 WHAT IS BUSINESS TO BUSINESS (B2B) B2B stands for "business-to-business," as in businesses doing business with other businesses. The term is most commonly used in connection with e-commerce and advertising, when you are targeting businesses as opposed to consumers. On the Internet, B2B (business-to-business), is the exchange of products, services, or information between businesses. B2B is e-commerce between businesses. B2B Communication using XML over HTTP B2B - the basics Business-to-business electronic commerce (B2B) typically takes the form of automated processes between trading partners and is performed in much higher volumes than business- to-consumer (B2C) applications.
  26. 26. REPORT ON E-BUSINESS 26 WHAT IS BUSINESS TO CONSUMERS (B2C) Refers to businesses selling products or services to end-user consumers. B2B stands for transaction activities involving two business entities (business-to-business transaction). B2C stands for transaction activities involving a business and a consumer (business-to-consumer transaction). Electronic commerce comprises commercial transactions, involving both organisations and individuals. From the technical point of view e-commerce is the processing and transmission of digitised data. E-commerce decreases the distance between producers and consumers. Consumers can make their purchase without entering a traditional shop.
  27. 27. REPORT ON E-BUSINESS 27 E-BUSINESS CATEGORY E-banks E-trade E-consulting E-engineer E-learning E-mail E-marketing E-transactions
  28. 28. REPORT ON E-BUSINESS 28 HOW SAFE ARE E-BUSINESS FINANCIAL TRANSACTIONS New security technology like 128-bit SSL encryption ensures the safety and privacy of both you and your customers, and is built into the latest e-Business software tools. Your security and privacy is a top priority with all e-Business providers.
  29. 29. REPORT ON E-BUSINESS 29 CAN MY BUSINESS BENEFIT FROM E-BUSINESS: Reduce administrative and operating costs. Reduce inventory costs. Reduce the cost of procurement. Improve customer service and satisfaction. Streamline procurement procedures. Increase communication efficiency and interaction with employees, vendors, customers and strategic partner. Increase revenues and profit margins.
  30. 30. REPORT ON E-BUSINESS 30 E-COMMERCE, E-BUSINESS, WHO E-CARE Some analysts and on-line business people have decided that e-business is infinitely superior as a moniker to e-commerce. That’s misleading and distracts us from the business goals at hand. The effort to separate the E-commerce and E-business concepts appears to have been driven by marketing motives and is dreadfully thin in substance. AN E-DISTINCTION For the purpose of clarity, the distinction between e-commerce and e-business in this book is based on the respective terms commerce and business. Commerce is defined as embracing the concept of trade, ‘exchange of merchandise on a large scale between different countries’.11 By association, e-commerce can be seen to include the electronic medium for this exchange. Thus electronic commerce can be broadly defined as the exchange of merchandise (whether tangible or intangible) on a large scale between different countries using an electronic medium – namely the Internet. The implications of this are that e-commerce incorporates a whole socio-economic, telecommunications technology and commercial infrastructure at the macro-environmental level. All these elements interact together to provide the fundamentals of e-commerce. Business, on the other hand, is defined as ‘a commercial enterprise as a going concern’.12 E- business can broadly be defined as the processes or areas involved in the running and operation of an organization that are electronic or digital in nature. These include direct business activities such as marketing, sales and human resource management but also indirect activities such as business process re-engineering and change management, which impact on the improvement in efficiency and integration of business processes and activities.
  31. 31. REPORT ON E-BUSINESS 31 Figure 1.1 illustrates the major differences in e-commerce and e-business, where e-commerce has a broader definition referring more to the macro-environment, e-business relates more to the micro-level of the firm. WHAT ARE THE KEY DRIVERS:- It is important to identify the key drivers of e-commerce to allow a comparison between different countries. It is often claimed that e-commerce is more advanced in the USA than in Europe. These key drivers can be measured by a number of criteria that can highlight the stages of advancement of e-commerce in each of the respective countries. The criteria that can determine the level of advancement of e-commerce .
  32. 32. REPORT ON E-BUSINESS 32 1 TECHNOLOGICAL FACTORS – The degree of advancement of the telecommunications infrastructure which provides access to the new technology for business and consumers. 2 POLITICAL FACTORS – including the role of government in creating government legislation, initiatives and funding to support the use and development of e-commerce and information technology. 3 SOCIAL FACTORS – incorporating the level and advancement in IT education and training which will enable both potential buyers and the workforce to understand and use the new technology. 4 ECONOMIC FACTORS – including the general wealth and commercial health of the nation and the elements that contribute to it. Since a distinction has been made in this book between e-commerce and e-business for consistency, the key drivers of e-business are also identified. These are mainly at the level of the firm and are influenced by the macro- environment and e-commerce, which include:
  33. 33. REPORT ON E-BUSINESS 33 KEY DRIVERS OF E-BUSINESS:- ORGANISATIONAL CULTURE – attitudes to research and development (R&D); its willingness to innovate and use technology to achieve objectives. COMMERCIAL BENEFITS – in terms of cost savings and improved efficiency that impact on the financial performance of the firm. SKILLED AND COMMITTED WORKFORCE – that understands, is willing and able to implement new technologies and processes. REQUIREMENTS OF CUSTOMERS AND SUPPLIERS – in terms of product and service demand and supply. COMPETITION – ensuring the organization stays ahead of or at least keeps up with competitors and industry leaders.
  34. 34. REPORT ON E-BUSINESS 34 DEMAND FOR PEOPLE WITH SKILLS IN E-BUSINESS INTRODUCTION This chapter introduces an “e-Business Skills Triangle” framework, reflecting the importance to e-Business of three main types of skill – business, creative and technical. It argues that e-Business predominantly needs people with a mix of types of skill, a proportion of them with a fairly even balance between two or all three types of skill. It goes on to look in more detail at the skills and work content associated with the main types of skill. Based on the analysis, four main e-Business occupations are identified, and the demand for new people and re skilling of existing members of the workforce is explored for each one. Key findings are that: • Business Studies programmed should have a significant Information Technology content. • Business Studies programmed should have an e-Business orientation that permeates all subjects studied. • There is a need for Business Schools to have a proportion of Information Systems programmed. with a fairly equal mix of business and information technology content. • There is a requirement for the existing population of managers and management advisors to understand the business implications of e-Business. • Every business with a web site will need a webmaster. • E-Business has boosted demand for people with technical IT skills. • There is a need to update the skills of technical people using dated technology.
  35. 35. REPORT ON E-BUSINESS 35 • There is a major increase in demand for designers to work on web design, and for people with a strong mix of design and technical skills. • Many of those already working in print design need to acquire web design skills, • As available bandwidth increases, the requirement for people to produce live action and animated content will increase. • Everyone entering employment should have IT skills. • Third level graduates should ideally have an understanding of the business uses of Information technology. • Industry needs to make existing employees IT literate, perhaps at an overall rate of about 2% of employment per annum.
  36. 36. REPORT ON E-BUSINESS 36 THE E-BUSINESS MODEL: The e-Business model, like any business model, describes how a company functions; how it provides a product or service, how it generates revenue, and how it will create and adapt to new markets and technologies. It has four traditional components as shown in the figure, The e-Business Model. These are the e-business concept, value proposition, sources of revenue, and the required activities, resources, and capabilities. In a successful business, all of its business model components work together in a cooperative and supportive fashion.
  37. 37. REPORT ON E-BUSINESS 37 E-BUSINESS CONCEPT: The e-business concept describes the rationale of the business, its goals and vision, and products or offerings from which it will earn revenue. A successful concept is based on a market analysis that identifies customers likely to purchase the product and how much they are willing to pay for it. GOALS AND OBJECTIVES: The e-Business concept should be based, in part, on goals such as "become a major car seller, bank, or other commercial enterprise", and "to become a competitor to some of the well- known firms in each of these industries." Objectives are more specific and measurable, such as "capture 10% of the market", or "have $100 million in revenues in five years." Whether these goals and objectives are realistic or not, and whether the company is prepared to achieve these goals is addressed in the business plan process for startup firms and in the implementation plan for an existing firm that is considering a significant change. In looking at the business model it is sufficient to know what the goals and objectives are, and whether they are being pursued.
  38. 38. REPORT ON E-BUSINESS 38 CORPORATE STRATEGIES Embedded in the e-Business concept are strategies that describe how the business concept will be implemented. These are known as corporate strategies because they establish how the business is intended to function. These strategies can be modified to improve the performance of the business. Environmental strategies, discussed in a following section, describe how the company will address external environmental factors, over which it has no control. THE E-BUSINESS CONCEPT AND MARKET RESEARCH The selection and refinement of the business concept should be integrally tied into knowledge of the market it serves. In performing market research care must be taken to account for the global reach of the Internet for both customers and competitors. It is also important to remember that markets shift, and can shift rapidly under certain conditions. But most important is to truly understand what the market is, who comprises it, and what do they want.
  39. 39. REPORT ON E-BUSINESS 39 THE E-BUSINESS CONCEPT PRICE Pricing is an important part of the e-business concept and should be established on the basis of market research. Price is often set with an eye on the competition and can have a direct effect on market share. In traditional commerce in the U.S., the seller sets the price. Online pricing, on the other hand, may include negotiation or auction pricing, where the interaction of sellers and buyers can affect the price. Knowledge of competing prices is also readily available online, and will keep downward pressure on prices. When is it OK to increase prices? It depends on the business. If a company has high fixed to variable costs, prices should be changed cautiously. If customers are "locked-in", and the product or service is less sensitive to price, then prices may be changed, to a degree, with less risk. But all changes should be checked beforehand with market research and financial analysis.
  40. 40. REPORT ON E-BUSINESS 40 A potential problem for some products is that the market may change faster than the seller can change the product or service. One way to survive in this environment is to sell at the minimum price that allows a profit, avoid price changes and continuously upgrade the product. This approach is often used in computer hardware and software sales. At the same time the seller should invest in finding how to shorten the development cycle, and put in place a market research program that will quickly identify trends and changes. The steady development of a product has other advantages. It evens out the revenue stream rather than having the "boom or bust" cycle of a single product. It also shows that the company is steadily developing and upgrading products for the customers who should begin to buy into the company's vision. And customers, analysts, and investors will develop confidence that the company is going to be around for the long-term. The price must also provide real value to the customer, that is the customer must be pleased with the purchase of the product or service. In addition to price, the buyer may also be interested in how the product can be of assistance to his company. In this case, comparisons of price and ROI may be used to show that the offering adds more value than a competitor's. The price can also be a basis for building long-term customer relations, which can lead to multiple sales. For example, as retail customers become more comfortable shopping on a site, it should be easier to get them to migrate to higher margin products.
  41. 41. REPORT ON E-BUSINESS 41 VALUE PROPOSITION The value proposition describes the value that the company will provide to its customers and, sometimes, to others as well. With a value proposition the company attempts to offer better value than competitors so that the buyer will benefit most with this product.  Reduced price  Improved service or convenience such as the "1 click" checkout  Speed of delivery and assistance  Products that lead to increased efficiency and productivity  Access to a large and available inventory that presents options for the buyer Providing value in an e-business uses the same approach as providing value in any business, although it may require different capabilities. But common to both are the customers who seek out value in a business transaction. The value proposition helps focus the business on the well-being of the customer, where it remains in successful companies.
  42. 42. REPORT ON E-BUSINESS 42 VALUE DELIVERY THROUGH INTEGRATION OF ACTIVITIES INTEGRATION OF ORGANIZATION OR ENTERPRISE OPERATIONS The integration of systems inside and outside the organization can provide value for both customers and the organization. One of the requirements for e-business is to link front-end with back-end systems in order automate the online operations of the organization. Front-end activities deal directly with the customer while back-end systems include all of the internal support activities that do not deal directly with the customer. Some enterprises have different geographic locations for front-end and back-end office activities and rely on the integration of the associated computer and network systems for successful corporate operations. Front-End & Back-End Operations:
  43. 43. REPORT ON E-BUSINESS 43 Examples of activities that require integrated systems are:  Order placement through point-of-sales systems  Customization of products based on user requirements  Production tracking  Customer order fulfillment EXTERNAL INTEGRATION: THE SUPPLY CHAIN Operations on the Web can also extend to cooperating firms such as partners in a supply chain, also known as a "Value Web". The Value Web may include a wide range of participants as well as the possible use of a digital exchange to procure or sell products. Many firms have participated in a supply chain for years using Electronic Data Interchange (EDI) technology to buy and sell components and products. Successful supply chains are vital for manufacturing operations since the timeliness, cost and success of the final product may depend on a component part made by a single supplier. The competence of suppliers may now be demonstrated through the ISO 9000 qualification process, which is critical when using suppliers from foreign countries or when the final products are exported.
  44. 44. REPORT ON E-BUSINESS 44 SUPPLY CHAIN INTEGRATION When the supply chain transactions of the partners can be automated and integrated over the Web into the back-end systems of each other, then the resources of all the chain partners can be planned and managed for an efficient operation. An emerging approach to automate transactions with partners is to link systems through the corporate portal, which greatly reduces the integration requirements. Portal software now has potential connections, or hooks, where the systems of different enterprises can be linked to securely transfer data. In addition to good technology, it takes a strategy, time, resources and, most importantly, trust between partners, for the supply chain to function successfully.
  45. 45. REPORT ON E-BUSINESS 45 STRUCTURAL CONCEPTS TO DELIVER VALUE The effective delivery of value to a customer, requires that a company organize its structure and functions according to the type of product or offering delivered. The value chain, as popularized by Michael Porter 1, describes a linear set of steps, which could be activities or business processes such as design, production and sales, whereby a manufacturing company delivers value. This value chain delivery model strives for overall efficiency and cost reduction by increasing the efficiency and reducing the cost of each business process. Each step is independent and separable, and can be outsourced, or contracted out to another company. The value chain becomes a supply chain when a company uses the inputs and activities of other companies in its manufacturing process. However, the value chain doesn't appear to describe how many service-oriented businesses operate. Stabell and Fjeldstad, Timmers, and Afuah and Tucci, have developed additional concepts of "value shop" and "value network", following the work of Thompson to address other types of businesses. The value shop describes a service operation, such as a consulting, law or accounting firm, that focuses on customer needs rather than on the production process of the value chain. It may also describe a department, such as customer service, within a larger organization. For example a manufacturing company, a value chain operation, could have within it a department that operates as a value shop. The e-business set up as a value shop works directly with the customer to provide a necessary, often unique, solution. The value shop is geared to solve specific client problems rather than to make a common solution more efficient. Some value shops, such as large consulting companies, will attempt to duplicate solutions among clients by introducing jargon to describe steps in an approach, and by attempting to fit the client's problem to the approach, rather than focusing on the client's problem.
  46. 46. REPORT ON E-BUSINESS 46 The value network is a type of e-business where networked users negotiate a transaction on a web site. The value network hosts online auctions, brokering, market making, intermediation, or other types of transactions. The value network depends on growth in order to attract more users. When the number of users on a value network increases, the network becomes more valuable to each participant since it increasingly becomes the site where desirable transactions will take place. Ultimately the strategy of network dominance results in large companies like eBay, since in theory it drives all of the users to be on one network. However, for various reasons described in a following section, this limit is never reached, and competitors do emerge, even for a company like eBay. Sources of Revenue Depending on the business model, several revenue sources may be available to an e-business. Many online businesses will have a three or four of these sources. A mix of revenue sources is often referred to as a revenue model but may be mistakenly called a business model. Some of these sources of revenue are:  Advertising  Affiliation  Agent commissions  Licensing  Sales commissions  Sales profits  Sponsorship  Subscription  Syndication  Use Fees
  47. 47. REPORT ON E-BUSINESS 47 For large public-private or government projects revenue sources might also include:  Bonds, usually for large capital expenditures  Taxes, primarily income, property and sales taxes  Use fees and tolls With small fast-growing companies such as e-Business startups, investors often track expected revenues and revenue growth and may make changes to increase revenue. However, after the Dot-Com boom ended, more traditional measures such as cash flow and earnings have came back into favor as means of evaluation. ACTIVITIES, RESOURCES AND CAPABILITIES The activities, resources and capabilities of a business are sometimes known as its requirements. In order to perform the activities required to carry out the mission of the business, certain resources are needed; for example, employees with certain skills, or capabilities, are needed to perform activities correctly and efficiently. Also, inventions, processes and other intellectual property may add to the individual knowledge of an employee to develop a competence in the performance of the required activities. Activities Activities are specific business processes or groups of processes such as design, production and sales that implement the business concept. The operational business model identifies the costs and outputs of each activity. Activities drive the need for resources. Existing activities should be carefully scrutinized in order to conserve resources and reduce costs. Activities left over from previous initiatives, but not currently necessary should be curtailed. This may sound elementary but businesses start many activities over time, especially if its business concept changes. But one doesn't often hear of a large business curtailing its activities in order to focus on its current mission.
  48. 48. REPORT ON E-BUSINESS 48 E-BUSINESS PROCESSES: Some fundamental e-business activities may infringe on patents. Business processes, or the "method of doing business" may be patented, so that a business model may unwittingly include the development or use of intellectual property owned by another party. Patents have been freely awarded for even the most straight forward business processes.  Amazon.com has a patent for "one click" purchasing technology and its "Affiliates" program.  CyberGold has a patent for pay-per-view ads where the customer enjoys an incentive for clicking on them  Netincentives has a patent for online incentives programs, possibly in conflict with CyberGold's  Netword LLC has a patent for a Web navigation based on keywords rather than URLs  Open Market has a patent on electronic shopping carts, on paying with credit cards using the secure socket layer encryption and on secure credit card transactions. However, there are now several types of shopping carts.  Priceline.com was issued a patent for its reverse auction method, that is, "name your price" auction.  Sightsound.com has a patent for selling digital content (e.g. downloading films) on the Web.  CI Software has a patent for EDI on the Internet
  49. 49. REPORT ON E-BUSINESS 49 One of the most widely renowned patent infringement cases was Amazon.com's patent for "one click" technology for purchasing items, which was at the center of its dispute with Barnes and Noble. One-click shopping allows the prospective buyer to bypass the use of a "shopping cart", which is cumbersome for many users. Amazon.com also has a patent for its "Affiliates" program, which allows the company to market the products of other companies in return for a commission. This business process has been used freely by traditional businesses since the beginning of recorded history and the fact that this process has been patented is very controversial. Also controversial is Priceline.com's patent for a reverse auction method, which it uses to sell airline tickets. In effect, a few companies have patented Internet business models, which are being used by many other companies. If these patents can be easily licensed at reasonable rates then there won't be a problem in the future development of e-business. But if not, the resulting chaos will inhibit the growth of the online business world.
  50. 50. REPORT ON E-BUSINESS 50 E-BUSINESS ENVIRONMENT AND STRATEGIES The rate of change in e-business presents an enormous challenge to managers. Business on the Internet is just beginning, and is evolving through a process of trial and error. Management flexibility is a key for survival and success in e-business. The environment of any organization consists of all of the factors that are beyond its control, but influence it in one way or another. Examples of these factors are shown in the figure, E- Business Environment and Strategies. To counter the potential adverse affects of these factors, the e-business can respond with strategies. An external strategy is an approach to deal with factors in the external business environment such as competitors, markets, and technological developments, that are beyond the company's direct control. This is different from a corporate strategy, which addresses factors under the company's control such as the approach to marketing, sales, and pricing. Other components of the business model such as the value proposition and sources of revenue may also include strategies.
  51. 51. REPORT ON E-BUSINESS 51 THE E-BUSINESS ENVIRONMENT AND STRATEGIES External strategies may be driven by components of the business model, such as finding workers with certain capabilities to staff activities. If the required work force is not available locally, the business concept may have to change, and workers brought in, or the work outsourced. Even though strategies may be implicit in the business model, such as hire workers at the industry wage, it is important to recognize them explicitly because they may have to change as the business environment changes.
  52. 52. REPORT ON E-BUSINESS 52 THE COMPETITIVE ENVIRONMENT AND STRATEGIES The competitive environment, sometimes known as the industry environment, results from relationships with other firms. These relationships are with suppliers, customers, producers of substitute products, potential new entrants, competitors, "complementary", and strategic partners, which are described by Porter. When suppliers are limited, they may keep prices high and reduce the profit of a firm that buys from them. A strategy for the buyer is to find new suppliers, or producers of substitute products. On the other hand, if there are only a few buyers, they can keep prices low, but a strategy for the seller is to find more customers to compete for products in order to raise prices, or to find a more profitable of their industrial capacity. Therefore the Internet serves to increase the knowledge of prices, find producers of substitute inputs, and subsequently cause downward pressure on prices. Potential new entrants to a market may also disrupt prices. Either they enter the market with low prices to gain market share, or they cause the existing firm to lower its prices in order to create a entry barrier to the new firm. Competitors may also cause prices to drop through price wars, but can also contribute to stability in the marketplace. Finally, complementary, firms that make products that need the firm's product to add value (e.g. software developers for particular PC operating systems), as well as strategic partners can create demand for the firm's products. In each case the Internet may be used to the advantage or disadvantage of the e-business. The point is that an e-business must have an Internet strategy to be successful.
  53. 53. REPORT ON E-BUSINESS 53 MAINTAIN AND IMPROVE COMPETENCIES One obvious strategy is to develop the capabilities, and to build and maintain competencies in order to keep an advantage over other firms. To do this, one must understand market conditions and the firm's strengths and weaknesses. Other strategies to maintain competencies include:  Block: The "block" strategy makes it difficult for other companies to copy business processes and intellectual property. Blocks can be achieved by limiting knowledge transfer about critical features or by reducing or indicating a reduction in prices.  Run: The "run" strategy means the business innovates faster than potential competitors. To pull it off the company needs competencies in critical areas.  Strategic Alliance: The e-business works with other firms that are not usually direct competitors. For small e-businesses, alliances may be essential since every facet of growth can be facilitated through association with a well-known and capable partner. Strategic alliances can solve immediate problems of developing capabilities in distribution, shipping, and billing, and will allow the company to be "up and running" very quickly. However, the small company should be concerned about losing its autonomy and intellectual property to its larger partner.
  54. 54. REPORT ON E-BUSINESS 54 THE TECHNOLOGY ENVIRONMENT AND STRATEGIES Technology plays an important role in e-business and must be tracked closely. It can shift very quickly and greatly disrupt an unprepared company. DISRUPTIVE TECHNOLOGIES When a new technology creates a different approach to performing a task that is less costly, more efficient, or otherwise relatively advantageous and displaces existing technology, it is known as a disruptive technology. These technical disruptions can cause businesses to fail, particularly in those organizations unprepared to change their business model. Examples of disruptive technologies are:  Alternative Energy Generation at low cost.  Artificial Intelligence including Autonomous Systems.  Emergent Computing: Biocomputing, DNA Computing, Optical Computing, Molecular or Chemical Computing, and Quantum Computing.  Global e-Commerce with the Electronic Product Code (EPC) and RFID.  Grid Computing, including Bioinformatics Grids and Economic Development Grids.  Human-Machine Interaction: Intelligent Collaboration, Intelligent Design, and Intelligent Training Systems.  Nanotechnology.  Open Courseware.  Open Design & Problem Solving.  Parallel Computing.  Knowledge Representation and the Semantic Web.  Superconductivity.  Voice, Sight and Haptic (i.e. touch) Response Systems.  Wireless Internet.
  55. 55. REPORT ON E-BUSINESS 55 TECHNOLOGY STRATEGIES Every e-business concept based on a technology break-through runs the risk of being replaced by a company with a newer technology. Therefore, a strategy to maintain technological leadership, or to have access to the leading applicable technologies, is essential for the long-term survival of a technology-based e-business. A technical innovation strategy can be as simple as outsourcing the technical side of an e- business rather than trying to maintain the competency in-house. If it is large enough, a firm can develop new technologies. But for most firms, an R&D program is too expensive. One option is to partner with an organization known for developing new technologies, so that they become available as they are developed. Co-developing and licensing technologies are also options. The use of a strategic alliance can serve as a technology strategy, as well as a competitive strategy. To avoid falling victim to a new technology, a firm must try to keep abreast of technological developments that may affect its industry. Any company that is technology-dependent must have someone in-house who is knowledgeable about the latest technical developments. But more importantly, the company must be willing to take action when it appears that a major advance in technology poses a threat.
  56. 56. REPORT ON E-BUSINESS 56 THE GENERAL ENVIRONMENT AND STRATEGIES The general environment contains those factors that face most businesses: laws and regulations, the economic climate, and worker availability. Laws and Regulations New laws and regulations may have unexpected effects on e-business, especially in the areas of privacy, patents and other intellectual property. E-Business leaders should understand regulations and the rational for local taxes, including how tax revenues are spent. Unfair tax breaks should not be expected by an e-business; neither should businesses expect to compete unfairly with other businesses. Economic Climate Sound financial strategies will help maintain cash flow and solvency during an economic downturn. Many small businesses simply run out of money before products begin to generate revenues. E-business should use the conservative accounting practices preferred by most investors. Worker Availability The availability of qualified employees is one of the biggest problems for an e-business attempting to grow from a startup into a small or medium sized enterprise. Although technical workers became available in the economic downturn after the Dot-Com crash, the availability of foreign workers decreased significantly after the terrorist attack of September 11, 2001. Larger technical companies, who had augmented their work force through hires of foreign workers prior to "9/11" now feel that must outsource large numbers of jobs abroad in order to find the talent needed to stay competitive. Whether outsourcing will be proven as a successful strategy over time remains to be seen. Certainly it will work in some situations, but it is unlikely to work in all situations. Strategies for the local work force include obtaining and keeping qualified employees with programs such as training, child care, and employee services. Training programs are also necessary for all employees to develop skills in new technologies.
  57. 57. REPORT ON E-BUSINESS 57 E-BUSINESS: AN EMBATTLED BUSINESS CULTURE its simplest form, e-business involves incorporating the Internet or its technologies to support a basic business process. For example, your order entry system, connected directly to the inventory database, is typically accessed from the field by sales reps calling their product availability inquiries in to an order entry administrator. The sales reps call in through a static GUI program or by e-mail to an order entry clerk, who processes each inquiry by order of receipt. The process works but may bog down during peak periods of the day or when the staff is short-handed. Besides, the main function of the order entry staff is to process actual orders.
  58. 58. REPORT ON E-BUSINESS 58 Providing product availability information to the field is a related responsibility that is often super ceded by higher priorities. Processing last minute requests in preparation for a meeting is too often out of the question. To complicate matters, you also have independent dealers and affiliates requiring product availability status reports as well as inquiries on an ongoing basis. After deciding that the product availability inquiry activity is suitable for an e-business application, the next step is identifying the information asset(s) the process generates. The mapping of information assets with the processes that support them is a critical requirement in e-business application development.
  59. 59. REPORT ON E-BUSINESS 59 PRODUCT INQUIRY FULFILLMENT PROCESS Instead of field personnel interacting with a character-based, static GUI or other generic front end to generate the inquiry request, they would access a front end that is capable of running in their browser, a personal digital assistant (PDA), or wireless hand device. The front end— Web server—must be able to perform the function provided by the order entry staff. That is, it must be able to access the inventory database, gather the information required by the inquiry, format the response, and feed it back via the Internet to the appropriate place (field) in the user’s browser, which is running the application on a laptop, home office computer, PDA, and so on. The application also does some housekeeping chores by clearing the inquiries from the front end and the remote database calls from the back end, or inventory database.
  60. 60. REPORT ON E-BUSINESS 60 CROSSING THE DIGITAL CHASM WITH MIDDLEWARE Most likely, the front-end Web application, or what the users see and interact with in the browser, is developed with Internet-enabled technologies, such as Java or HTML application tools. The back end could be, for instance, a legacy UNIX database that has been a mission- critical application for some time. To accomplish the interconnectivity between the front-end browser application and the back- end UNIX database, yet another application system, typically referred to as middleware, must be used to provide the interconnections, or compatibility, between the dissimilar front- and back-end applications. Examples of middleware are systems developed with J2EE (Java 2 Platform Enterprise Edition).
  61. 61. REPORT ON E-BUSINESS 61 Developed by Sun Microsystems, J2EE is more popular in Web application development than CORBA (common object request broker architecture), introduced by the Object Management Group in 1991, or DCOM (distributed component object model), which is Microsoft’s bet for an object standard. However, the other standards are growing in use for Web application development. With middleware in place, the e-business application provides the same functionality of the previous system. However, the virtual process replaces the traditional product inquiry and physical clearinghouse process and provides greater operating advantages and overall benefits to the enterprise.
  62. 62. REPORT ON E-BUSINESS 62 E-BUSINESS: THE SHAPING AND DYNAMICS OF A NEW ECONOMY E-business is a revolution: a business existence based on new models and digital processes, fueled by hyper growth and new ideals. It is also pursuit of new revenue streams, cost efficiencies, and strategic and competitive advantages spawned by virtual business channels. Cutting-edge Internet technologies and new vistas of emerging technologies enable e-business. E-business is a forging of a new economy of just-in-time business models, whereby physical processes are being supplanted by virtual operating dynamics. Yes, e-business is all this. THE E-BUSINESS SUPPLY CHAIN Typically, e-business is described and discussed with more emotion than other business areas, and rightfully so. After all, we are witnesses to an exciting revolution. To gain true insight and a conceptual understanding of e-business, it needs to be defined from both the B2C and the B2B perspectives. This section also introduces Internet, or digital, supply chains and reveals their underlying significance to both the B2C and B2B e-business channels.
  63. 63. REPORT ON E-BUSINESS 63 THE B2C SUPPLY CHAIN STREAMLINES PROCESSES OF THE PHYSICAL WORLD THE BUSINESS-TO-CONSUMER PHENOMENON When consumers purchase goods and certain classes of services directly from the Internet, online retailers are servicing them. In other words, online retailers, or e-tailers, have initiated a consumer-oriented supply, or value, chain for the benefit of Internet consumers. This form of Internet-based activity is known as business-to-consumer (B2C). Supply chain is used interchangeably with value chain. However, supply chain, in the traditional sense, refers to the supply and distribution of raw materials, capital goods, and so on, that are purchased by a given enterprise to use in manufacturing or developing the products and services for customers or in regular business operations. In B2C distribution modes, supply, or value, chain refers to the system, or infrastructure, that delivers goods or services directly to consumers through Internet-based channels.
  64. 64. REPORT ON E-BUSINESS 64 B2C e-business is a rich, complex supply chain that bears no direct analogy to the physical world. In fact, no supply chain in the physical world compares to B2C value chains such that an apples-to-apples comparison can be made. Thus, B2C e-channels are unique because they are providing supply chains that streamline and enhance processes of the physical world. Internet-driven supply chains depend heavily on the coordination of information flows, automated financial flows, and integrated information processes rather than on the physical processes that traditionally move goods and services from producer to consumer. THREE CLASSES OF B2C VALUE CHAINS MAKE POSSIBLE THE FOLLOWING E-BUSINESS REALITIES: 1) Delivery of the universe, or an unlimited number—potentially millions—of goods and services within established markets, by operating under a single brand identity or as a superefficient intermediary. 2). Creation of new market channels by leveraging the Internet. 3). Elimination of middlemen while streamlining traditional business processes
  65. 65. REPORT ON E-BUSINESS 65 E-BUSINESS: THE SHAPING AND DYNAMICS OF A NEW ECONOMY Amazon.com and CD Now are excellent examples of the B2C class indicated in class 1. Amazon has succeeded by producing an efficient consumer product delivery system. The value in this e-business channel is the uniting of many backstreet dealers under the banner of one popular brand name. CD Now is also attempting to implement a similar strategy. Furthermore, no one bookstore or music store in the physical world offers 10 million titles like Amazon.com does or 325,000 CDs like CD Now does. Traditional book or CD retailers in established markets could never offer this vast array of merchandise, because of shelf space and inventory constraints. For example, the typical super bookstore or music CD store stocks only 150,000 or 60,000 titles, respectively. An example of B2C class 2 is eBay, which created a new market channel in establishing an online auction facility. Through this e-business channel, buyers and sellers—everyday consumers—can interact to sell personal items in a venue that did not exist previously. Dell.com is an example of the third B2C e-business class. Dell.com is successful because it incorporates the principle of disintermediation, or the ability to eliminate intermediaries from the value chain. In other words, disintermediation involves disengaging middlemen, who usually command a share of the value chain. Research has shown that intermediaries add a large percentage to the final price of products. Percentages range from 8 percent for travel agents to more than 70 percent for a typical apparel retailer. Dell is a business case example of effective deployment of disintermediation because its direct consumer model delivers custom-built computer systems at reasonable prices by leveraging Internet channels. In the future, other online supply chains will successfully remove middlemen, resulting in even lower prices for other classes of goods and services.
  66. 66. REPORT ON E-BUSINESS 66 In summary, the Internet supply chains created to support B2C e-business initiatives have no direct analogy in the traditional, or physical, world of commerce. True, the two channels have similarities. The goods and services offered in physical bricks- and-mortar retailers become sexy multimedia presentations and transaction data. E-tailers and consumers connect via Web portals instead of driving to malls or to various business concerns. Inventory becomes online transaction data that flows from the consumer’s shopping cart of the online store— Web site—to fulfillment houses or directly to the producers themselves. B2C Value Chains Create The Following Three Types Of E-Business Realities: 1. In established markets, creation of digital supply chains that eliminate middlemen and enable the availability of a unique service, such as Dell’s direct delivery of custom-built PCs. 2. Creation of a new market channel that did not exist in the physical universe, such as eBay’s creation of the online auction facility for the convenience of everyday consumers. 3. Uniting of back-end, used or rare-product dealers under the banner of a popular name brand. In effect, this creates a consortium of businesses under a single branded identity, or under a new, superefficient intermediary, that did not exist in the physical world.
  67. 67. REPORT ON E-BUSINESS 67 THE BUSINESS-TO-BUSINESS PHENOMENON B2B commerce growing from $150 billion in 1999 to $7.4 trillion by 2004! Presently, the median transaction for B2B sites is three to four times the size of the median transaction for B2C sites, or $800 versus $244. Important drivers of this projected growth include, but are not limited to, competitive advantage, reduction of costs, increased profits, and customer satisfaction. If you are able to build an effective B2B channel, the payoff could be significant, resulting in improved economies of scale and productivity, reduction in overhead, improved information flows and processing, and increased operating efficiencies, to name a few.
  68. 68. REPORT ON E-BUSINESS 68 • REDUCE COSTS OF GOODS AND SERVICES AND POTENTIALLY LOWER CUSTOMER PRICES. By connecting information systems directly with suppliers and distributors, organizations can realize more efficient processes, resulting in reduced unit costs of products or services and, perhaps, lower prices to customers while effectively achieving economies of scale. • REDUCE OVERHEAD. B2B channels can eliminate extraneous or redundant business functions and related infrastructures, resulting in the reduction of overhead costs. • INCREASE PRODUCTIVITY. By eliminating operational waste and the automation of inefficient business practices, organizations can realize productivity gains. • ENHANCE PRODUCT AND SERVICE OFFERINGS. With economies of scale, reduction of overhead, operating efficiencies, and lower operating costs, such gains may be passed on to the customer through lower prices or as enhanced or additional features of products or services. • CUSTOMER SATISFACTION. A strategic benefit of the successful implementation of dynamic B2B business models is improved customer perception of the transaction. This metamorphosis will not occur unless companies undergo radical changes. Enterprises will begin with critical self-examination and comprehensive process analysis to determine what internal operating functions, underlying infrastructures, and critical practices are necessary to transform into a B2B channel that is capable of leveraging the Internet. This in turn will lead to the reengineering of processes, elimination of operational inefficiencies, and, ultimately, increased productivity. If companies are successful, they will reinvigorate their value chains, incorporate technology-driven processes that become the foundation for B2B, and increase transactions with customers.
  69. 69. REPORT ON E-BUSINESS 69 END-TO-END SOLUTION company cannot merely incorporate e-business technologies into an existing system (that is, write something in Java). Rather, it must become an e-business through-and-through. To reap full value, e-business methodologies should be universal throughout the organization, from interaction with suppliers to transactions with customers. More importantly, an e-business focused organization integrates these e-functions with core business applications to maximize efficiencies at all operational levels. Business intelligence is also key to the e-business model since, without the benefit of buying pattern analyses, companies tend to simply open a Web catalog and compete on price — often with disastrous results. Without a value add, an e-business is dead on arrival. With this understanding, iSeries provides an ideal end-to-end solution platform. From customer relationship management (CRM) to supply chain management (SCM), it applies analytical business intelligence to better target e-business efficiencies. Emphasizing both B2C and B2B practices — e-business on iSeries is so much more than simply an electronic shopping cart application.
  70. 70. REPORT ON E-BUSINESS 70 E-BUSINESS FRAMEWORK By anyone’s measure, embarking on a mission to establish a cohesive e-business project is challenging. Couple that with the need to interoperate with tried-and-true back-office systems, and you can end up with a task so large that a beginning point is hard to locate. To meet this need, IBM developed the e-business Application Framework. The Internet makes it possible to extend these mission-critical applications even further. iSeries allows customers to easily integrate e-business solutions with line-of-business and front-office applications that are being re-engineered as Web-based applications. iSeries is unique in that it offers integrated (not add-on) e-business capabilities that optimize this server for end-to-end e-business solutions and emerging workloads.
  71. 71. REPORT ON E-BUSINESS 71 TOOLS OF E-BUSINESS TOOLS AND MIDDLEWARE A wide range of tools are available to allow an iSeries or AS/400e system to play a key role in the development and deployment of e-business applications. Within the e-business/e- commerce modernization strategy, a number of specific categories of tools can be brought to bear: Application Servers are development and execution environments, many of which come complete with developer tool sets for creating applications that may interoperate with other like or unlike systems. These are typically based on Java and open standards- based models. Application Service Provider (ASP) Solutions include tools that allow Application Service Providers to create and/or deploy applications via the Internet to multiple customers from the ASP's site(s). B2B Connectors & Enablers are tools specifically targeted to B2B applications and the Internet deployment of the supply chain. Many of these tools focus on connecting buyers and sellers via e-marketplaces, as well as other many-to-one and one-to-many scenarios, thus consolidating the catalog and buying process. Browser Front End to Existing Application Solutions are created with tools that can be used to connect core business application code to a browser-based presentation of that code via Java or HTML with little or no actual coding required on the part of the programmer.
  72. 72. REPORT ON E-BUSINESS 72 New Browser-based Applications can be built from scratch using tools that create the GUI client presentation code and the back-end processing code. Browser Utilities can be used to create and maintain components of a Web-based application and can also be used to build applets to access data. Other miscellaneous tools are included here as well. CRM Solutions are tools that are designed to assist customer service functions. These tools include business rules that can be implemented to enhance the support for customers. EAI (Enterprise Application Integration) tools facilitate the connection of ERP solutions to other back end applications, including the extraction of data from ERP, reformatting and transport of the data across heterogeneous servers and loading of the data into the databases used by the receiving application such as Business Intelligence. e-Commerce Solutions are largely “already finished” applications that can be customized with minor effort to perform a specific purpose — generally a "shopping cart" type of application, although some solutions may be dedicated to CRM or other mission-critical application areas. Electronic Data Interchange/eXtensible Markup Language (EDI/XML) refers to tools that allow for the movement, via the Internet, of data between vendors and systems within the supply chain. Payment Servers are tools that validate charge card purchases by contacting the holding card company to confirm the availability of credit for the purchaser. These tools also provide trusted security and confidentiality routines, as is demanded more and more by consumers when providing personal and private information.
  73. 73. REPORT ON E-BUSINESS 73 Portals & Personalization tools allow the creation of web portals and creation of personalized user interfaces. Users are given the capability to save their configurations for future web site visits. Web Access to DB2 UDB for AS/400 is delivered via tools and utilities that provide access from the browser to DB2 UDB for AS/400 tables. These tools may simply provide database connection drivers via JDBC, or they may be higher level tools with their own GUI for building queries against DB2 UDB for AS/400. Web Report Viewers are tools that allow the end user to view iSeries or AS/400 print spool files via a browser. These tools hold promise for workers whose jobs involve many hours of browsing through archived AS/400 print output. These tools can also extract AS/400 print and distribute the print files in PDF or other Web formats to Internet users via e-mail tools. Wireless Access Solutions can be achieved by using tools for writing/extending applications to handheld devices. As an interesting side point, the personal information management (PIM) industry (which includes Palm Pilots and Hand Spring Visors that link to e-mail via wireless modems) is expecting record-breaking sales in the last quarter of 2000. Wireless access is becoming as mainstream as the cellular phone, both of which will accelerate demand for wireless access solutions. These tools allow the programmer to deploy a 5250 application to a tier0 device with no change to the underlying RPG application in most cases.
  74. 74. REPORT ON E-BUSINESS 74 BUSINESS MODELS: A method of doing business by which a company can generate revenue to sustain itself • Spells out where the company is positioned in the value chain • Business models are a component of a business plan or a business case THE CONTENT OF A BUSINESS PLAN Mission statement and company description. • The management team. • The market and the customers. • The industry and competition. • The specifics of the products and/or services • Marketing and sales plan. • Operations plan. • Financial projections and plans. • Risk analysis. • Technology analysis.
  75. 75. REPORT ON E-BUSINESS 75 STOREFRONT MODEL: • Storefront model enables merchants to sell products on the Web. • Transaction processing, security, online payment, information storage. • E-commerce allows companies to conduct business 24-by-7, all day every day, worldwide. • An e-commerce storefront should include: • Online catalog of products • Order processing • Secure payment • Timely order fulfillment SHOPPING CART TECHNOLOGY SHOPPING CART • An order-processing technology allowing customers to accumulate lists of items they wish to buy as they continue to shop. • Product catalog • Merchant server • Database technology • Combine a number of purchasing methods to give customers a wide array of options
  76. 76. REPORT ON E-BUSINESS 76 ONLINE SHOPPING MALLS • Wide selection of products and services. • Offers greater convenience than shopping at multiple online shops. • Consumers can make multiple purchases in one Transaction. AUCTION MODEL • ONLINE AUCTION SITES • Act as forums through which Internet users can log-on and assume the role of either bidder or seller. • Collect a commission on every successful auction. • Sellers post items they wish to sell and wait for buyers to bid. RESERVE PRICE: • The minimum price a seller will accept in a given Auction. REVERSE AUCTIONS Allow the buyer to set a price as sellers compete to match or even beat it.
  77. 77. REPORT ON E-BUSINESS 77 PORTAL MODEL PORTAL SITES • Give visitors the chance to find almost everything they are looking for in one place HORIZONTAL PORTALS • Portals that aggregate information on a broad range of topics. • Yahoo!, AltaVista, Google. VERTICAL PORTALS • Portals that offer more specific information within a single area of interest. • WebMD. HORIZONTAL PORTALS
  78. 78. REPORT ON E-BUSINESS 78 DYNAMIC PRICING MODELS • The Web has changed the way products are priced and purchased. COMPARISON PRICING MODEL • Web sites using shopping both technology to find the lowest price for a given Item. DEMAND-SENSITIVE PRICING MODEL • Group buying reduces price as volume of sales increase. NAME-YOUR-PRICE MODEL • Name-your-price for products and services. BARTERING MODEL • Individuals and business trade unneeded items for items they desire. REBATE MODEL • Sites offer rebates on product at leading online retailers in return for commission or advertising revenues. FREE OFFERING MODEL • Free products and services generate high traffic.
  79. 79. REPORT ON E-BUSINESS 79 E-BUSINESS ADVERTISING • Traditional • Television, movies, newspapers and magazines • Establish and continually strengthen branding • Brand is a symbol or name that distinguishes a company and its products or services from its competitors and should be unique, recognizable and easy to remember. • Publicize URL on direct mailings and business cards • Online advertising • Place links on other sites, register with search engines BANNER ADVERTISING • BANNER ADS • Located on Web pages, act like small billboards, usually contain graphics and an advertising message. • Increased brand recognition, exposure and possible revenue. SIDE PANEL ADS OR SKYSCRAPER BANNERS • Advertisements that lie vertically on Web sites • Place logo on banners, enhancing brand Recognition
  80. 80. REPORT ON E-BUSINESS 80 BANNER ADVERTISING • Inventive color schemes and movement. • Flashing, scrolling text, pop-up boxes and color changes. • Pop-up box is a window containing an advertisement that appears separate from the screen the user is viewing, pops up randomly or as a result of user actions (can have a negative effect due to their intrusive nature) • Determine the best position on sites for a banner • Web sites cluttered with ads annoy visitors • Space can be more expensive during high traffic • Exchanging banners with another site
  81. 81. REPORT ON E-BUSINESS 81 BUYING AND SELLING BANNER ADVERTISING • Buy advertising space on sites that receive a large number of hits and target a similar market. • Selling ad space provides additional income. • Monthly charges for online advertising rarely used. CPM (COST PER THOUSAND) • A designated fee for every one thousand people who view the site on which your advertisement is located. • ADVERTISING PAYMENT OPTIONS • Pay-per-click: you pay the host according to the number of click-through to your site • Pay-per-lead: you pay the host for every lead generated from the advertisement. • Pay-per-sale: you pay the host for every sale resulting from a click-through. • Selling advertising space. • Provide appropriate contact information on your Web site. • Register with organizations that will sell your space for you. • These companies typically charge a percentage of the revenue you receive from the Advertisements placed on your site.
  82. 82. REPORT ON E-BUSINESS 82 ORGANIZATIONAL STRATEGIES FOR E-BUSINESS To be successful in e-business, an organization must master the art of electronic relationships. Traditional means of customer acquisition such as advertising, promotions, and public relations are just as important with a Web site. Primary business areas taking advantage of e-business include: • MARKETING SALES • FINANCIAL SERVICES • PROCUREMENT • CUSTOMER SERVICE • INTERMEDIARIES MARKETING/SALES Direct selling was the earliest type of e-business and has proven to be a steppingstone to more complex commerce operations. Successes such as eBay, Barnes and Noble, Dell Inc., and Travelocity have sparked the growth of this segment, proving customer acceptance of e- business direct selling. Marketing and sales departments are initiating some of the most exciting e-business innovations . Cincinnati’s WCPO-TV was a ratings blip in 2002 and is now the number three ABC affiliate in the nation. WCPO-TV credits its success largely to digital billboards that promote different programming depending on the time of day. The billboards are updated directly from a Web site. The station quickly noticed that when current events for the early-evening news were plugged during the afternoon, ratings spiked.
  83. 83. REPORT ON E-BUSINESS 83 The digital billboards let several companies share one space and can change messages directly from the company’s computer. In the morning, a department store can advertise a sale, and in the afternoon, a restaurant can advertise its specials. Eventually customers will be able to buy billboard sign time in hour or minute increments. Current costs to share a digital billboard are $40,000 a month, compared with $10,000 for one standard billboard. FINANCIAL SERVICES Financial services Web sites are enjoying rapid growth as they help consumers, businesses, and financial institutions distribute information with greater convenience and richness than is available in other channels. Consumers in e-business markets pay for products and services using a credit card or one of the methods outlined. Online business payments differ from online consumer payments because businesses tend to make large purchases (from thousands to millions of dollars) and typically do not pay with a credit card. Businesses make online payments using electronic data interchange (EDI) Transactions between businesses are complex and typically require a level of system integration between the businesses. Many organizations are now turning to providers of electronic trading networks for enhanced Internet-based network and messaging services. Electronic trading networks are service providers that manage network services. They support business to- business integration information exchanges, improved security, guaranteed service levels, and command center support. As electronic trading networks expand their reach and the number of Internet businesses continues to grow, so will the need for managed trading services. Using these services allows Organization to reduce time to market and the overall development, deployment, and maintenance costs associated with their integration infrastructures.
  84. 84. REPORT ON E-BUSINESS 84 PROCUREMENT Web-based procurement of maintenance, repair, and operations (MRO) supplies is expected to reach more than $200 billion worldwide by the year 2009. Maintenance, repair, and operations (MRO) materials (also called indirect materials ) are materials necessary for running an organization but do not relate to the company’s primary business activities. Typical MRO goods include office supplies (such as pens and paper), equipment, furniture, computers, and replacement parts. In the traditional approach to MRO purchasing, a purchasing manager would receive a paper-based request for materials. The purchasing manager would need to search a variety of paper catalogs to find the right product at the right price. Not surprisingly, the administrative cost for purchasing indirect supplies often exceeded the unit value of the product itself. According to the Organization for Economic Cooperation and Development (OECD), companies with more than $500 million in revenue spend an estimated $75 to $150 to process a single purchase order for MRO supplies. E-PROCUREMENT E-procurement is the B2B purchase and sale of supplies and services over the Internet. The goal of many e-procurement applications is to link organizations directly to preapproved suppliers’ catalogs and to process the entire purchasing transaction online. Linking to electronic catalogs significantly reduces the need to check the timeliness and accuracy of supplier information. An electronic catalog presents customers with information about goods and services offered for sale, bid, or auction on the Internet. Some electronic catalogs manage large numbers of individual items, and search capabilities help buyers navigate quickly to the items they want to purchase. Other electronic catalogs emphasize merchandise presentation and special offers, much as a retail store is laid out to encourage impulse or add-on buying. As with other aspects of e-business, it is important to match electronic catalog design and functionality to a company’s business goals.
  85. 85. REPORT ON E-BUSINESS 85 CUSTOMER SERVICE E-business enables customers to help themselves by combining the communications capability of a traditional customer response system with the content richness only the Web can provide—all available and operating 24x7. As a result, conducting business via the Web offers customers the convenience they want while freeing key support staff to tackle more complex problems. The Web also allows an organization to provide better customer service through e-mail, special messages, and private password-Web access to special areas for top customers. Customer service is the business process where the most human contact occurs between a buyer and a seller. Not surprisingly, e-business strategists are finding that customer service via the Web is one of the most challenging and potentially lucrative areas of e-business. The primary issue facing customer service departments using e-business is consumer protection. CONSUMER PROTECTION An organization that wants to dominate by using superior customer service as a competitive advantage must not only consider how to service its customers, but also how to protect its customers. Organizations must recognize that many consumers are unfamiliar with their digital choices, and some e-businesses are well aware of these vulnerabilities. For example, 17-year-old Miami high school senior Francis Cornworth offered his “Young Man’s Virginity” for sale on eBay. The offer attracted a $10 million phony bid. Diana Duyser of Hollywood, Florida, sold half of a grilled cheese sandwich that resembles the Virgin Mary to the owners of an online casino for $28,000 on eBay. highlights the different protection areas for consumers. Regardless of whether the customers are other businesses or end consumers, one of their greatest concerns is the security level of their financial transactions.
  86. 86. REPORT ON E-BUSINESS 86 This includes all aspects of electronic information, but focuses mainly on the information associated with payments (e.g., a credit card number) and the payments themselves, that is, the “electronic money.” An organization must consider such issues as encryption, secure socket layers (SSL), and secure electronic transactions (SET) NEW TRENDS IN E-BUSINESS: E-GOVERNMENT AND M-COMMERCE Recent business models that have arisen to enable organizations to take advantage of the Internet and create value are within e-government. E-government involves the use of strategies and technologies to transform government(s) by improving the delivery of services and enhancing the quality of interaction between the citizen consumer within all branches of government. customer-focused links connect users to millions of Web pages, from the federal government, to local and tribal governments, to foreign nations around the world. M-COMMERCE: In a few years, Internet-enabled mobile devices will outnumber PCs. Mobile commerce , or m-commerce , is the ability to purchase goods and services through a wireless Internet- enabled device. The emerging technology behind m-commerce is a mobile device equipped with a Web-ready micro-browser. To take advantage of the m-commerce market potential, handset manufacturers Nokia, Ericsson, Motorola, and Qualcomm are working with telecommunication carriers AT&T Wireless and Sprint to develop smartphones. Using new forms of technology, smart phones offer fax, e-mail, and phone capabilities all in one, paving the way for m-commerce to be accepted by an increasingly mobile workforce. Figure 3.33 gives a visual overview of m-commerce.
  87. 87. REPORT ON E-BUSINESS 87 Amazon.com has collaborated with Nokia to pioneer a new territory. With the launch of its Amazon.com Anywhere service, it has become one of the first major online retailers to recognize and do something about the potential of Internet enabled wireless devices. As content delivery over wireless devices becomes faster, more secure, and scalable, m- commerce will surpass landline e-business (traditional telephony) as the method of choice for digital commerce transactions. According to the research firm Strategy Analytics, the global m-commerce market was expected to be worth more than $200 billion by 2005, with some 350 million customers generating almost 14 billion transactions annually. Additionally, information activities like e-mail, news, and stock quotes will progress to personalized transactions, “one-click” travel reservations, online auctions, and videoconferencing. M-COMMERCE TECHNOLOGY OVERVIEW 1900s. Technology is a primary force driving these changes. Organizations that want to survive must recognize the immense power of technology, carry out required organizational changes in the face of it, and learn to operate in an entirely different way.
  88. 88. REPORT ON E-BUSINESS 88 OFFICIAL SITES OF E-BUSINESS Flipkart Website: (www.flipkart.com) Flipkart is an Indian e-commerce company headquartered in Bangalore, Karnataka. It was founded by Sachin Bansal and Binny Bansal in 2007. In its initial years, Flipkart concentrated on online sales of books, but it later on expanded to electronic goods and a diversity of other products. Flipkart offers multiple payment methods like credit card, debit card, net banking, e-gift voucher, and the major of all Cash on Delivery. The cash-on-delivery model adopted by Flipkart has proven to be of great significance since credit card and net banking penetration is very low in India. 2. Snapdeal: Website: (www.snapdeal.com) Snapdeal is a leading online marketplace, headquartered in New Delhi, India. Snapdeal features products across categories like mobiles, electronics, fashion accessories, apparel, footwear, kids, home and kitchen, sports, books; and services like restaurants, spas & entertainment amongst others. The company was started by Kunal Bahl, a Wharton graduate
  89. 89. REPORT ON E-BUSINESS 89 and Rohit Bansal, alumnus of IIT Delhi, in February 2010. Snapdeal also provides discounted deals connecting with local merchants. 3) Fashionandyou: Website: (www.fashionandyou.com) Fashion and You is a private invitation only shopping club, based in Gurgaon, India. It was founded by Harish Bahl in November, 2009. The fashion site features collections by top designers for men, women and children for up to 80% off retail prices. Fashion and You obtain authentic designer merchandise straight from the brand and provides it exclusively to its members through limited-time events. 4. Myntra: Website: (www.myntra.com) Myntra was established by Mukesh Bansal, Ashutosh Lawania, and Vineet Saxena in February 2007. All three are IIT graduates, and have worked for several start-ups. Myntra is headquartered in Bangalore and has been funded by Venture Capital funds like IndoUS, IDG & Accel Partners. Myntra.com works as an online shopping retailer of fashion and casual lifestyle products. The company started off in the business of personalization of products, and soon expanded to set up regional offices in New Delhi, Mumbai and Chennai.
  90. 90. REPORT ON E-BUSINESS 90 5. Homeshop18:- Website: (www.homeshop18.com) HomeShop18 is the online and on-air retail and distribution venture of Network 18 Group, headquartered in NOIDA, India. HomeShop18 was launched on 9 April, 2008 as India's first 24-hour Home Shopping TV channel, where anchors performed live demonstration of products on sale. The television channel established HomeShop18's foothold in Indian retail because of high television penetration. Later, as the internet reach grew all over the country, HomeShop18 expanded to the internet. 8. Yebhi.com: Website: (www.yebhi.com) Yebhi.com is an Indian Online shopping E-commerce portal for Home, Lifestyle & Fashion e-retailer, launched in the year 2009. Yebhi, which began as BigShoeBazaar.com, has a registered user base of about 1.5 million people, of who about half a million have transacted on the site. Nexus Venture Partners and N. R. Narayana Murthy’s Catamaran Ventures invested 40 crore in Agarwal’s company in mid-2011. On July' 10th 2012, Big Shoe Bazaar
  91. 91. REPORT ON E-BUSINESS 91 India Pvt Ltd. owner of Brand Yebhi.com announced that it has raised 100 Cr in Series C round of funding led by Fidelity Growth Partners India and Qualcomm. 9) Caratlane: Website: (www.caratlane.com) Caratlane is India's first online jewellery store with an assorted range of diamond jewellery designs to offer every customer. They offer more than 1,40,000 loose diamonds, and over 1000 ready to choose diamond jewellery online like diamond rings, pendants, earrings, bracelets, bangles and gold coins for all budgets. The quality & authenticity of diamond jewellery is validated with BIS Hallmarking and Certification from International labs like GIA, IGI, HRD and AGS. The website offers discount up to 25 percent of prices. This advantage is achieved with no inventory cost, minimal overhead cost, no intermediaries and in-house manufacturing facility. Buying jewellery online in India is more challenging with the lack of touch and feel factor. To counter this, Cartlane.com also offers ‘try at home’ facility before buying a jewellery online, to ensure complete satisfaction of look and size. The clients also receive personalized service from the qualified jewellery consultants every time they buy jewellery online. With easy payment options including convenient 6 or 12-month EMIs, customers can enjoy free, insured delivery anywhere in India.
  92. 92. REPORT ON E-BUSINESS 92 Research Limitation One of the limitations in research includes lack of adequate information on a particular subject. Research equipments are very hard or expensive to acquire leading to formulation mere assumptions. Another hindrance is poor or inaccessibility to the region of study. Some of the limitations of doing a research include access of information, availability of enough resources and time management. The availability of experts in editing and guidance may also be minimal where support from friends or organisation may not be enough.
  93. 93. REPORT ON E-BUSINESS 93 DATA ANALYSIS AND INTERPRETATION AND FINDINGS CONCLUSIONS:-  community consensus on essential details to improve quality of products and services based on real requirements of end-users.  successful implementation among early adopters which then results in a faster and broader adoption process.  greater flexibility for innovation and increased revenues.  the differentiation by cost, availability, speed, reach and flexibility when the product becomes a commodity, as profit margins decrease.