Natasha Papazafeiropoulou
E-commerce / E-business
current developments and future
directions
Dr Natasha Papazafeiropoulou, Brunel University
[email protected]
3 Dec 2004
Natasha PapazafeiropoulouOverview
• Introduction to E-commerce • Technological infrastructure • Business issues • Social issues • The future C A S E S T U D I E S Natasha PapazafeiropoulouWhat is e-commerce
• Digitally enabled commercial transactions between and among
organisations and individuals
• The automation of commercial transactions using computer and
communication technologies
• Communications perspective: The delivery of goods, services, information or payments over computer networks
• Business perspective: The application of technology toward the automation of business transactions
• Service perspective: A tool that addresses the desire of firms, consumers and management to cut service costs while improving the quality of ggods and increasing speed of service delivery
Natasha Papazafeiropoulou
E-business
• E-businessrefers to a broaderdefinition of e-commerce, not just the buying and selling of goods and services, but also servicing customers, collaborating with business partners, and conducting electronic transactions within an organisation
• “E-business is all about time cycle, speed, globalisation,
enhanced productivity, reaching new customers, and sharing knowledge across institutions for competitive advantage”
Lou Gerstner, CEO IBM • E-businessis the digital enablement of transactions and
processes within a firm, involving information systems under its
control
Why IT is not enough
The difference between
E-commerce and E-business
Natasha Papazafeiropoulou
Unique features of E-commerce
• Ubiquity: Internet is available everywhere
• Global reach: Reach across national boundaries, around the globe
• Universal standards: Internet standards (e.g.TCP/IP, HTML, XML)
• Richness: Use of video, audio
• Interactivity: High interaction with the user
• Information density: Reduced information cost increased quality
• Personalisation/customisation: Customisation of products and services based on individual characteristics
Natasha Papazafeiropoulou
Growth of web content
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Electronic commerce history
• 1970’s: Electronic Funds Transfer
• Late 70’s - Early 80’s: EDI - Electronic Mail
• Late 80’s - Early 90’s: Groupware
• 1990’s: World Wide Web
• 2000: E-business vs E-commerce
Natasha Papazafeiropoulou
E-commerce failures
• Dot.com failures
• Main reasons for failure:
1. Bad customer service 2. Inadequate order fulfillment
3. Use of primitive search and transaction tools 4.Failure to globalize
5.Building community rather than clientele 6.Insufficient budgets
7.Channel conflict
Natasha Papazafeiropoulou
Major types of e-commerce
• B2C: Business to consumer (Amazon.com)
• B2B: Business to Business (eSteel.com)
• C2C: Consumer to Consumer (eBay.com)
• P2C: Peer to peer (napster.com)
• B2P: Business to public administration (inlandrevenue.gov.uk)
• C2P: Consumer to public administration (dvla.gov.uk)
Natasha Papazafeiropoulou
Case study
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Kazaa.com
• 65 millionusers worldwide
• The largestand most successfulfree music file swapping sit in Internet history
• Servers in Denmark, software development team in Estonia,
headquarters in Vanatuand a domain registration in Australia
• Lawsuits for massive violationof copyright
• Following of Napster’sclose-down in 2002
• Based on a technology that does not requirea central index of titles
• Main revenues from advertisement
• April 2003 the US district court ruled that Kazaa could not be held
liable for copyright infringement as they could not control how peole use the software
Natasha Papazafeiropoulou
Kazza case study questions
• In which type of e-commerce categories Kazza fall?
• Is the record label industry justified in attempting to shut Kazza down?
• Do you agree with the courts decision for Kazza?
• Do you believe there is future for Kazaa?
Natasha Papazafeiropoulou
E-commerce technical
infrastructure
• Packet switching. A method of slicing digital messages into packets, sending them along different communication paths and then reassembling them once they arrive at their destination
• TCP/IP(Transmission Control Protocol/Internet Protocol): Protocol that establishes the connections among sending and receiving web computers and handles the assembly of packages
• IP address: Internet addresses expressed as 32-bit numbers that appear as a series of four separate numbers marked off by dots (201.61.186.227)
E-commerce technical
infrastructure
• Domain name: IP addresses expressed in natural language
• URL(Uniform resource locator): The address used by the web
browser to identify the location of content on the web
• Client/servercomputing: A model of computing in which personal computers are connected in a network with one ore more servers
– Client: Personal computer capable of displaying rich graphics and
Router MCI Router Router Larger Local ISP Smaller Local ISP Business Smaller Local ISP Dial Up Users Dial Up Users BACKBONE To Florida Virginia Alternet Backbone T3 BACKBONE CONNECTION T1 Local Provider T3 T1 ISDN Dial Up Users
Natasha Papazafeiropoulou
Internet-Extranets-Intranets
Internet
Network Databases Intranet Databases Busines partner’s Intranet Extranet Extranet Firewall Firewall Network Natasha PapazafeiropoulouSecurity issues
• Authentication. Verifying that an entity is who they claim to be
• Authorisation. Giving access to information to the right person
• Auditing. Collecting information about users behaviour
• Privacy. Protection of data against unauthorised people
• Integrity. Protecting data from being altered or destroyed
• Availability. Possibility to gain access to pages, data, services
• Non-repudiation. Protection from parties refuting a transaction
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Electronic payments
• Credit cards
– SET (Secure Electronic Transaction)
• Digital wallets
• Digital cash
(First Virtual, DigiCash (e-cash), Millicent
• Smart cards
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Credit cards
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Credit cards +SET
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Case study
• Priceline.com
Natasha Papazafeiropoulou Natasha PapazafeiropoulouPriceline.com
• Reverse-auctionpricing system • “Name your own price” business model
• A new way of pricingproducts and services
• Consumers can bidfor travel, hotels rental cars and home financing
• In 2002 they sold 2.9 millionairline tickets, 4.1 millionhotel room
nights and 2.8 millionrental car days
• In 2001 had lossesof $15 million and in 2002 $23 million
• The competitionin the market is tremendous
Natasha Papazafeiropoulou
Priceline case study questions
• What is new is priceline’s business model?
• Can Pricelinesurviveor even succeed?
• Has priceline impacted the travel sector?
• Do you know the latest developments?
B2B e-commerce. Benefits for
business
• Low administrative costs
• Lower search costs for buyers
• Reduce inventory cost
• Lower transaction costs by eliminating paper-work
Natasha Papazafeiropoulou
E-business integration
• Supply chain management (SCM)
• Enterprise Resource Planning (ERP)
• Customer relationship managemnet (CRM)
• Web services
• Intermediation / Disintermediation
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Intermediation-Disintermediation
Book Publisher Wholesheller
Bookshop
Discuss: Will online bookstores have a negative effect on city life by wiping out most smaller bookshops?
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Social issues
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Social issues
• Information rights. Privacy, profiling, CRM systems, Informed consent
• Property rights. Intellectual property rights, copyright, patents, trademarks, cyberpiracy
• Governance. Can the Internet be controlled? Public government and law, taxation, e-policies
• Public safety and welfare. Protecting children, on line gambling, digital divide
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Social issues
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Case study
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Microsoft
• Dominanceof the computer industry, including PC operating systems and browsers and now media players, handheld computer operating systems, cell phone operating systems, enterprise servers, content, business services
• 93%share of the PC client operating system market
• 44%(vs Linux 26%) of the corporate server market
• 95%share of the office productivity market (Microsoft office)
• 85%of the Internet browser market
• Dominance of Media Player 9
• Microsoft-AOLThe two dancing elephants
• Social effectsof monopolies: drive competitors out of business, raise prices
Natasha Papazafeiropoulou
Microsoft case study questions
• Do you believe that the US courts decision to break Microsoft onto
smaller companies solves the monopoly problem?
• What can be the arguments pro and against the use of Microsoft
products at home and business environments?
• Who should ensure that abuses do not occur as Microsoft’s strategy
unfolds in the future?
Natasha Papazafeiropoulou
The future of e-commerce
• Broadband
• M-commerce
• Wireless technology
• Location based commerce
Just the tip of
the iceberg !
Natasha Papazafeiropoulou
Reading material
• Books
– Laudon, K.C., Traver, C.G. (2003) “E-commerce: business, technology, society” 2ndedition, Boston, Addison Wesley.
– Turban, E. (2002) “Electronic Commerce 2002, A managerial perspective”, New Jersey, Pearson Education.
– Westland, J.C, Clark, H.K. (2000), “Global electronic commerce. Theory and case studies”, Cambridge, MA, The MIT Press
• Journals
– Electronic Business – Electronic commerce – Electronic commerce research
– Electronic commerce research and application – Electronic markets
Natasha Papazafeiropoulou
