Bachelor of Information Technology – Semester 6

e-Business Applications
What is e-Business?
 In the 1990s, the commercialization
of the Internet set off a revolution.
 Cost structure and geographic limits
of networked systems are irrelevant
 Business people responded by
creating entirely new types of
businesses and fundamentally
altering existing businesses.
What is e-Business?
 Limited “Strategic use” of IT
became widespread.
 New terms were created to label
the revolution: electronic
commerce (e-commerce) and
electronic business (e-business).
e-Commerce
 This refers to the process of selling
products and services via internet, i.e. e-
tailing. Such systems gives the ability to
reach the consumer in more global
market.
 E-commerce is a sub type of e-business
e-Business
 We define e-business as the use
of telecommunications networks,
particularly the Internet, Intranets
and Extranets to conduct
business transactions.
e-Business
 E-business can be divided into three
categories which map directly into the
three strategic roles of IT
 Inward – oriented towards employees
 Outward – oriented towards
customers
 Across – oriented towards other
business
Business to Employee ( B2E )
 Intranet based applications internal to a
firm which map with inward role of IT.
That is use of IT to improve
organizational processes and structure.
 E.g.
 Microsoft’s HR web
 KPMG’s Intranet which acts a strategic
business tool
Business to Customer ( B2C )
 Internet based applications for a firm’s
customers which map with outward role of
IT. That is use of IT for building close
relationships with customers and providing
better quality products and services.
 E.g
 Amazon.com
 Garden.com
 Package tracking systems of FedEx
 CRM at AMEX ( American Express )
Business to Business ( B2B )
 Extranet based applications for a firm’s
business partners, which map with
across role of IT. That is the use of IT for
linking with other organizations.
 E.g.
 CISCO Supply Chain Management
Systems
 In addition to the above three categories
some more e-business systems have
emerged in the recent past.
Business to Government ( B2G)
 Extranet based systems used to interlink
organizations with government
authorities such as customs, inland-
revenue and other regulatory authorities
fro specific industries. These systems
reduce the paper work and improve the
efficiency of interaction with government
enterprises.
Consumer to Consumer ( C2C )
 This a new class of electronic business
which is internet bases. Here, a
consumer can be a seller as well a
buyer. The e-business enterprise thus
acts as an e-broker.
 E.g.
 Ebay.com
 Amazon.com
Benefits of E-commerce to an
Organization
 Expands the market place
 Decreases cost of paper based information
 Creates highly specialized businesses
 Reduce inventories & overhead by “Demand-Pull” type SCM
 Reduces the Processing time
 Initiates BPR projects
 Increased Productivity
 Reduces Telecommunications costs
 Improved image & customer service
 New found business partners
 Compressed cycle and delivery time
 Eliminating paper
 Reduces transportation costs
 Increased flexibility
Benefits of E-commerce to
Customers
 Shop from anyplace at anytime (24/7/365)
 Give more choices and options
 Quick comparisons allows to go for cheap
products
 Quick delivery
 Get relevant information efficiently
 Participate in virtual auctions
 Exchange ideas with other customers via
electronic communities
Benefits of E-commerce to
Society
 Shopping at home reduces traffic and air
pollution
 Lowering of prices
 Improves living standards
 Wider access to products & services
 Facilitates delivery of public services
such as health-care, education etc.,
Limitations – Technical
 Lack of security & reliability
 Insufficient bandwidth
 Tools are still evolving
 Difficulty in integrating existing
applications & databases
 Vendors need other infrastructure
 Incompatibility with some H/w and O/s
Limitations – Non technical
 Costis high and difficult to justify
because intangible benefits cannot be
quantified
 Security and Privacy
 Specially in B2C area
 Lack of trust and user resistance
 Faceless seller
 Paperless transaction
 Electronic money
Limitations – Other
 Many legal issues and regulations are
not refined
 Still evolving and changing rapidly
 Not enough support services
 Could breakdown human relationships
 Internet access is still expensive which
reduces the potential customers
Components of an e-Business
Questions - 2006 Paper
 Getting into e-Business has several
advantages. List down six (6) such
advantages:
 Global accessibility and sales reach
 Closer relationships
 Free samples
 Reduced costs
 Media breaks
 Time to market
 Customer loyalty
Questions - 2006 Paper
 Going into online business has many concerns
for people. List down six (6) of them:
 Channel conflict
 Competition
 Copyright
 Customer acceptance
 Legal issues
 Loyalty
 Pricing
 Security
 Service
 Viability
Web-based Business Models
1. Brokerage Model
2. Advertising Model
3. Infomediary Model
4. Merchant Model
5. Manufacturer Model
6. Affiliate Model
7. Community Model
8. Subscription Model
9. Utility Model
Brokerage Model
 They bring buyer and sellers together to facilitate
transactions
 Used in B2B, B2C, C2C
 Charges a Fee or a Commission for each transaction
 Buy/Sell Fulfillment - CarsDirect
 Demand Collection Systems – Priceline.com
 Types of Brokers
 Auction Brokers - eBay
 Transaction Brokers – Paypal
 Distributors
 Search agent – DealTime
 Virtual Marketplace – Amazon.com
Advertising Model
 Broadcast content
 Can be the content creator or distributor of content
created elsewhere
 Content ( Web site ) and other Services ( e-mail,
chat ) may be given Free
 Advertising in the form of Banner Ads
 Revenue from Banner Ads
 Portals – Yahoo.com
 Classifieds – Montser.com
 User Registration – NYTimes Digital
 Query based paid placement – Google
 Contextual Advertising – Google
 Content targeted advertising – Google
Infomediary Model
 Firms assisting Buyers / Sellers by
providing information
 Assist Buyers understand the producers
and available products
 Assist Sellers understand consumers
and consumption habits
 Advertising Networks – DoubleClick
 Audience measurement services – Nielsen
 Incentive Marketing – Mypoints
Merchant Model
 Wholesalers and Retailers of goods and
services
 Sales through list prices and auction
 Eg:
 Virtual merchant – Amazon.com
 Catalog merchant – Lands’ End
 Click and Mortar – Barnes & Noble
 Bit Vendor – Apple iTunes Music Store
Manufacturer Model
 “Direct Model” that allows the
manufactures to reach the buyers
directly
 Facilitates efficiency, improved customer
service, better understanding customer
preferences
 Eg:
 Purchase, Lease, License, Brand Integrated
Content – BMW-Films
Affiliate Model
 Purchase opportunities whenever
surfing and affiliated site
 It is pay for performance model
 Eg:
 Banner exchange, Pay-per click, Revenue
sharing
Community Model
 Viability based on user loyalty
 Revenue through sale of ancillary
products and services or donations
 Eg:
 Open source – Redhat
 Public Broadcasting – The Classical station
 Knowledge networks – AllExperts
Subscription Model
 Users are charged a Daily, Monthly or
Annual Fee to subscribe to a service
 Usually offer Free and “Premium”
content
 eg
 Content services – Listen.com
 Person-to person networking services –
Classmates
 Trust services – Truste
 Internet Service Providers – America Online
Utility Model
 Charge is based on metering the usage
 “Pay as you go” approach
 Some ISP operates in this basis
 Eg:
 Metered usage