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From E-Commerce To E-Business: The Convergence of Business and Technology

E-commerce began in the 1980s with technologies like EDI and IVR that allowed businesses to conduct transactions electronically. This expanded in the 1990s with the rise of the internet and web technologies. While many dot-com companies failed, e-business continues to evolve by using new technologies like web services to transform business processes and drive efficiencies across organizations. However, the core of doing business remains the same, and traditional business models are still relevant even in the digital age.

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Soumitra Chakraborty
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48 views25 pages

From E-Commerce To E-Business: The Convergence of Business and Technology

E-commerce began in the 1980s with technologies like EDI and IVR that allowed businesses to conduct transactions electronically. This expanded in the 1990s with the rise of the internet and web technologies. While many dot-com companies failed, e-business continues to evolve by using new technologies like web services to transform business processes and drive efficiencies across organizations. However, the core of doing business remains the same, and traditional business models are still relevant even in the digital age.

Uploaded by

Soumitra Chakraborty
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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From E-Commerce to E-Business

The Convergence of Business and Technology

Key Questions

Did e-commerce start with the Internet and the Web? Whats the difference between e-commerce and e-business? If the Web is so great, why did all those companies fail? Are web services the next big thing in e-business?

Electronic Commerce (narrow definition)


Conducting business transactions through marketfacing systems. C U S T O M E R S
3

Order-to-Cash
Delivering services online
Selling products on-line

Procurement
Purchasing goods and services electronically

EDI orders from customers

SUPPLIERS

Electronic Commerce (expanded definition)


electronic business
Conducting business through market-facing systems.
PARTNERS
Commercialization
Exchanging engineering drawings with partners

Pre-Sales
Providing product information to prospective customers

Order-to-Cash
Delivering services online
Selling products on-line

EMPLOYEES
Benefits Administration
Reviewing and updating benefits information

Procurement
Purchasing goods and services electronically

EDI orders from customers

Post-Sales
Customer self-help
4

SUPPLIERS

C U S T O M E R S

The Beginning of E-Commerce


1980s B2B
Phone System Automation

B2C
Phone System Automation

B2E
Phone System Automation

1980s

System to Individual

Electronic Transactions

1980s

System to System

and the Supporting Technologies


B2B IVR
System to Individual

B2C IVR IVR

B2E
1980s

EDI
System to System

1980s

Electronic Data Interchange


Connect with private network Translate documents
EDI standard documents

Middleware
Translator

Private Network

Middleware
Translator

Enterprise A

Enterprise B
7

Integrated Voice Response Applications


Telephone

Public Phone Network Corporate Phone Network

Install specialized system Connect to phone network

IVR System

Data servers

Middleware
Translator

Make core systems accessible by IVR system

Core Business Systems

Evolution to E-Business
1990s B2B
Phone System Automation

B2C
Phone System Automation Marketing Info E-Tailing

B2E
Phone System Automation Employee Self-service

1980s 1990s

System to Individual

Marketing Info Customer Self-service

Electronic Transactions

1980s

System to System

Customer Relationship Mgmt

1990s

and the Supporting Technologies


B2B IVR
System to Individual

B2C IVR Internet/Web IVR

B2E
1980s

Internet/Web

Intranet/Web 1990s Internet/Web


1980s

EDI
System to System

Internet/XML

1990s

10

Internet System to System


Connect with Internet Add robustness, redundancy, security Connect with other enterprise Translate documents
Middleware
Translator

XML documents

Middleware
Translator

Internet

Enterprise A

Enterprise B
11

Web Applications
Browser

Internet

Web server

The ubiquitous web browser

Commerce application server

Data servers

Middleware
Translator

Make core systems accessible by apps on app server

Core Business Systems

12

Internet economy poses opportunities and threats

Transform traditional business models using IT as enabler

Compression of time & space


30% of BancAmericas online customers are outside of traditional geographic area Adaptec reduces manufacturing cycle from 12 to 8 weeks, slashing $10M in inventory costs Always open

Friction reduction creating new sources of economic value


Intermediation premium (e.g. brokers fee) Manual sourcing by fax and phone Cost of brick & mortar

But adding market turbulence

The Internet will change everything.


13

Market Turbulence
Travel, Brokerage, Books
Internet

The Actor
Schwab Sabre, Travelocity Barnes & Noble

(New Channel)

Internet-Only Competitor
ETrade
Internet

Preview Travel Amazon.com

Traditional Competitor
Merrill Lynch Travel Agencies Local Bookstores
Courtesy: Cisco Systems

Customer Space (Physical World)

New Customer Space

Out-of-Market Competitor
Intuit MS Expedia

14

The Ultimate Impact

The Internet dramatically lowers the cost of communication


Likely Incremental Impact Retailing Manufacturing Travel Power
Courtesy: Business Week

Potential Revolutionary Impact Financial Services Entertainment Health Care Education Government But:
Privacy issues Need for additional technology (e.g. broadband, on-line bill paying) Who controls the information

Why? physical factors overrule


virtual Top of the line web site $15-25M Warehouse & distribution system $150M
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New Tools for the Old Economy

Tremendous tools for old economy companies to apply to business processes.


Annual Growth Rate in Nonfarm Business Productivity Worldwide B2B Transactions 4

Annual growth rate (%)

2.5 2 1.5 1 0.5 0 '80-'85 '85-'90 '90-'95 '95-'00 Source: Bureau of Labor Statistics

Trillions of dollars

3 2 1 0 '99 '00 '01 '02 '03 Source:Forrester Research Inc.

16

Challenge: Process Improvement

E-Business is like putting a magnifying glass in front of your core processes


Legacy Back Office Systems

Legacy Business Operational Processes

from

New Business Operational Processes

ERP
Order to Cash Manufacturing Finance Procurement

to
17

Challenge: Systems Development

Product software development and information systems development are becoming intertwined

from

to

Network

Product Software

Information Systems
18

Challenge: Commercialization

Product commercialization must become business commercialization


Innovation Phases
C 0 Discovery & Innovation Business Hypothesis A Definition Business Development Planning

Commercialization Phases
2 Design Implementation Business Development B C 4 Mfg./Operations Implementation 6 Production 7

Opportunity Selection

Business Start-Up D

Business Building

New Business Development Phases

19

Why Did the .com Companies Fail?

Flawed business model


Companies

view the technology as their business, rather than having a business Lose money on individual transactions
Amazon.com loses almost $3 per order on multi-product orders
Lack All

of control over supply of what they sell

Priceline.com

the good ideas duplicated by established concerns with deep pockets and staying power

20

Web Services the Future?


2000s B2B IVR
System to Individual

B2C IVR Internet/Web IVR

B2E

Internet/Web

Intranet/Web Internet/Web

EDI
System to System

Internet/XML
Web Services Web Services Web Services

21

Web Services ready for prime time?

Favorable Signs

Challenges

Takes component foundation


Reuse culture Semantic agreement

and leverages Internet technologies


http XML

Cross-vendor interoperability Simplicity Security Pre- and post-transaction processes


Trading partner agreements

22

Core Services
Who does this service? Directory Services
-UDDI

Deploy Service

Requestor
Request Service

Provider

Deliver Service

23

Helper Services
Who does this service?
-Products -Price

Define business and business terms

Directory Directory Services Services


-UDDI -UDDI -other

Deploy Service

Do we want to do business with them?


-T&Cs -Reliability

Provider
Do we want to do business with them?
-T&Cs -Risk

Request Service

Credit Services Evaluating risk Underwriting risk

Deliver Service
Record activity & settle payment

Billing & Payment Services Tax Import/export

Requestor

24

Summary

E-business has been around for 20+ years, but the opportunities have been accelerated by the Internet and the web. Business is still business
The

Internet hasnt changed that though for a while many thought it might have.

Web services may be the next big thing, but EDI, IVR, etc. will probably still be around.

25

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