CHAPTER 13

E-BUSINESS

⧭ The internet is a powerful channel that presents new opportunities for an organization      to:

      ➽ Touch customers
      ➽ Enrich products and services with information
      ➽ Reduce costs

 ⧭ How do e-commerce and e-business differ?

        ➤  E-commerce – the buying and selling of goods and services over the Internet                                           (online transactions)
        ➤  E-business – the conducting of business on the Internet including, not only buying                                  and selling, but also serving customers and collaborating with                                            business partners (online transactions, serving customers                                                  and collaborating with business partner)

⧭ Industries Using E-Business

⧭ E-business model – an approach to conducting electronic business on the Internet

BUSINESS-TO BUSINESS (B2B)

⧭ Electronic marketplace (e-marketplace) – interactive business communities providing a central market where multiple buyers and sellers can engage in e-business activities




ELECTRONIC MARKETPLACE (E-MARKETPLACE)

🔻 Electronic marketplaces, or e-marketplaces, present structures for conducting commercial exchange, consolidating supply chains, and creating new sales channels

🔻 Their primary goal is to increase market efficiency by tightening and automating the relationship between buyers and sellers

🔻 Existing e-marketplaces allow access to various mechanisms in which to buy and sell almost anything, from services to direct material




ELECTRONIC MARKETPLACE

SEARCH ENGINE MARKETING

BUSINESS-TO-CONSUMER(B2C)

🔺 Common B2C e-business models include:
🔽 e-shop – a version of a retail store where customers can shop at any hour of the day without leaving their home or office
🔽 e-mall – consists of a number of e-shops; it serves as a gateway through which a visitor can access other e-shops




E-SHOP

E-MALL

BUSINESS-TO-CONSUMER(B2C)

➽Business types:
➼Brick-and-mortar business- operates in a physical store without an Internet presence. Eg: Bata.
➼Pure-play business- a business that operates on the Internet only without a physical store. Examples include fashionvalet.com.

➼Click-and-mortar business– a business that operates in a physical store and on the Internet .Eg: Hijabs by Hanami

CarFax

Amazon.com

CONSUMER-TO-BUSINESS(C2B)

 ➧Priceline.com is an example of a C2B e-business model

 ➧The demand for C2B e-business will increase over the next few years due to customer’s  desire for greater convenience and lower prices

PriceLine.com

Agoda.com

CONSUMER-TO-CONSUMER(C2C)

⧭ Online auctions :

 🔼 Electronic auction (e-auction) - Sellers and buyers solicit consecutive bids from each other and prices are determined dynamically

 🔼 Forward auction - Sellers use as a selling channel to many buyers and the highest bid

wins

 🔼 Reverse auction - Buyers use to purchase a product or service, selecting the seller with the lowest bid

⧭ C2C communities include :

🔽Communities of interest - People interact with each other on specific topics, such as golfing and stamp collecting

🔽Communities of relations - People come together to share certain life experiences, such as cancer patients, senior citizens, and car enthusiasts

🔽Communities of fantasy - People participate in imaginary environments, such as fantasy football teams and playing one-on-one with Michael Jordan


e-Bay

Mudah.my

E-BUSINESS BENEFITS

E-Business benefits include:

➤Highly accessible
     ➷Businesses can operate 24 hours a day, 7 days a week, 365 days a year
➤Increased customer loyalty
     ➷Additional channels to contact, respond to, and access customers helps contribute            to customer loyalty
➤Improved information content
     ➷In the past, customers had to order catalogs or travel to a physical facility before              they could compare price and product attributes. Electronic catalogs and Web pages
        present customers with updated information in real-time about goods, services, and          prices
➤Increased convenience
    ➷E-business automates and improves many of the activities that make up a buying               experience
➤Increased global reach
    ➷Businesses, both small and large, can reach new markets
➤Decreased cost
    ➷The cost of conducting business on the Internet is substantially smaller than                      traditional forms of business communication

E-BUSINESS CHALLENGES

E-business challenges include:

⧪Identifying Limited Market Segments

⟴The main challenge of e-business is the lack of growth in some sectors due to product        or service limitation.

⧪Managing Consumer Trust

⟴Internet marketers must develop a trustworthy relationship to make that initial sale          and generate customer loyalty.

⧪Ensuring Consumer Protection
⟴Implement Internet Security, protect from misuse of customer information.

⧪Managing Consumer Trust
⟴Companies that operate online must obey a patchwork of rules about which customers      are subject to sales tax on their purchase and which are not.

E-BUSINESS BENEFITS & CHALLENGES

There are numerous advantages and limitations in e-business revenue models
including:

➽Transaction fees
➽License fees
➽Subscription fees
➽Value-added fees
➽Advertising fees

MASHUPS

⧭Web mashup - a Web site or Web application that uses content from more than
one source to create a completely new service

   ⦽Application programming interface (API) - a set of routines, protocols, and tools for          building software applications

   ⦽Mashup editor - WSYIWYGs (What You See Is What You Get) for mashups

CHAPTER 12

INTEGRATING THE ORGANIZATION FROM END TO END 

(ENTERPRISE RESOURCE PLANNING)

• At the heart of all ERP systems is a database, when a user enters or updates information in one module, it is immediately and automatically updated throughout the entire system

• ERP systems automate business processes

BRINGING THE ORGANIZATION TOGETHER

                                            ERP - Bringing the organization together

THE EVOLUTION OF ERP

INTEGRATING SCM, CRM AND ERP

➽ SCM, CRM & ERP are the backbone of e-business

➽ Integration of these applications is the key to success for many companies

➽ Integrations allows the unlocking of information to make it available to any user,                     anywhere, anytime

➽ SCM & CRM market overviews

➽ General audience and purpose of SCM, CRM & ERP

INTEGRATION TOOLS

🔻 Many companies purchase modules from an ERP vendor, an SCM vendor & a CRM                   vendor and must integrate the different modules together

       ⤇Middleware - several different types of software which sit in the middle of and provide                                      connectivity between two or more software applications

       ⤇Enterprise application integration (EAI) middleware - packages together commonly                 used functionality which reduced the time necessary to develop solutions that                           integrate applications from multiple vendors 

🔻 Data points where SCM, CRM & ERP integrate

ENTERPRISE RESOURCE PLANNING (ERP)

⧭ ERP systems must integrate various organization processes and be :

  

      ⏩ Flexible - must be able to quickly respond to the changing needs of the organization

      ⏩ Modular and open - must have an open system architecture, meaning that any                                                               module can be interface, with or detached whenever required                                                         without affecting the other modules

      ⏩ Comprehensive - must be able to support a variety of organizational functions for a                                                  wide range of businesses

      ⏩ Beyond the company - must support external partnerships and collaboration efforts

⧭ SAP boasts 20000 installations and 10 million users worldwide

⧭ ERP solutions are growing because :

     🔽 ERP is a logical solution to the mess of incompatible applications that had sprung up in most businesses

     🔽ERP addresses the need for global information sharing and reporting

     🔽 ERP is used to avoid the pain and expense of fixing legacy systems

CHAPTER 11

BUILDING A CUSTOMER -CENTRIC ORGANIZATION -CUSTOMER RELATIONSHIP MANAGEMENT (SCM)

           

CUSTOMER RELATIONSHIP MANAGEMENT (SCM)

• CRM enables an organization to:
• Provide better customer service
• Make call centers more efficient
• Cross sell products more effectively
• Help sales staff close deals faster
• Simplify marketing and sales processes
• Discover new customers
• Increase customer revenues

RECENCY, FREQUENCY, AND MONETARY VALUE

• Organizations can find their most valuable customers through “RFM” - Recency, Frequency, and Monetary value
• How recently a customer purchased items (Recency)
• How frequently a customer purchased items (Frequency)
• How much a customer spends on each purchase (Monetary Value)

THE EVOLUTION OF CRM

➤ CRM reporting technology - help organizations identify their customers across other applications
➤ CRM analysis technologies - help organization segment their customers into categories such as best and worst customers
➤ CRM predicting technologies - help organizations make predictions regarding customer behavior such as which customers are at risk of leaving
➤ 3 phases in the evolution of CRM include reporting, analyzing, and predicting 

THE UGLY SIDE OF CRM

CUSTOMER RELATIONSHIP MANAGEMENTS'S EXPLOSIVE GROWTH

USING ANALYTICAL CRM TO ENHANCE DECISIONS

🔺 Operational CRM - supports traditional transactional processing for day-to-day front-office operations or systems that deal directly with the customers
🔺 Analytical CRM - supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers

Operational CRM and analytical CRM

CUSTOMER RELATIONSHIP MANAGEMENT SUCCESS FACTORS

CRM success factors includes :

1. Define information needs and flow
2. Build an integrated view of the customer
3. Implement in iterations
4. Scalability for organizational growth

CHAPTER 10

EXTENDING THE ORGANIZATION- 

SUPPLY CHAIN MANAGEMENT (SCM)

SUPPLY CHAIN MANAGEMENT

• The average company spends nearly half of every dollar that it earns on production
• In the past,companies focused primarily on manufacturing and quality improvements to influence their supply chains

BASIC OF SUPPLY CHAIN

➽ The supply chain has 3 main links :

1. Materials flow from suppliers and their "upstream" suppliers at all levels
2. Transformation of materials into semi finished and finished products through the organization's own production process
3. Distribution of products to customers and their "downstream" customers at all levels

➽  Organizations must embrace technologies that can effectively manage supply chains

INFORMATION TECHNOLOGY'S ROLE IN THE SUPPLY CHAIN

• IT's primary role is to create integrations or tight process and information linkages between functions within a firm

• FACTORS DRIVING SCM

VISIBILITY

• Supply chain visibility - the ability to view all areas up and down the supply chain
• Bullwhip effect - occurs when distorted product demand information passes from one entity to the next throughout the supply chain

CONSUMER BEHAVIOR

• Companies can respond faster and more effectively to consumer demands through supply chain enhances
• Demand planning software - generates demand forecasts using statistical tools and                                                                   forecasting techniques

COMPETITION

• Supply chain planning (SCP) software - uses advanced mathematical algorithms to improve                                                                       the flow and efficiency of the supply chain
• Supply chain execution (SCE) software - automates the different steps and stages of the                                                                                supply chain
• SCP and SCE in the supply chain

SPEED

• 3 factors fostering speed

SUPPLY CHAIN MANAGEMENT SUCCESS FACTORS

• SCM industry best practices include :

          🔻 Make the sale to suppliers

          🔻 Wean employees off traditional business practices

          🔻 Ensure the SCM system supports the organizational goals

          🔻 Deploy in incremental phases and measure and communicate success

          🔻 Be future oriented

SCM SUCCESS STORIES

• Top reasons why more and more executives are turning to SCM to manage  their extended enterprises

• Numerous decision support systems (DSSs) are being built to assist decision makers in the design and operation of integrated supply chains
• DSSs allow managers to examine performance and relationships over the supply chain and among :                                                                                                                                                          * Suppliers                                                                                                                                        * Manufacturers                                                                                                                              * Distributors                                                                                                                                    * Other factors that optimize supply chain performance