E-business (BUS361)
Reasons of internet growth
- E-commerce - New channels - Wider markets - Now called e-business
Define Common Gateway Interface
- How a web based request is passed to an application (and the response sent) - CGI scripts
Packaged Software (COTS) Commercial of the shelf
- Installed & then operated - Can be customized
Business Process Re-engineering
- Redesigning how we do business - Necessary because of ERP - Can be how, who, what with or when - Resistance to change
Points of website design
- Reputation/recognition - Access speed - Content - Page layout - Navigability - E-commerce capabilities - Shopper friendliness - Customization/personalization - Connectivity Amazon... listed items below that other users who bought item you liked - Community - Global perspective - Multiple language - Effective fulfillment capabilities - Trust indicators • Business practices • Assurances
Identify & explain the foundations of e-bus
- Speed - Customization - Redefinition of product value • 4 kinds of utility: Form (physical shape of product log vs bird house pieces which you assemble - log is going to be cheaper), place (how far we have to go to get it/where we are when we buy it), time, ownership - Media flexibility
Evolution of website design
-Brochureware phase -Interactive phase -Personalization phase (target content, site stickiness)
Steps for the implementation of BI
-Planning Phase (Establish goals & align with corporate goals, Specific success factors: Ease of use, scalability, flexibility, performance, data quality & security) -Architectural Design (Database design, System architecture) -Execution (PERT, Change management, Training Control ... ROI?) Integrate and organize (metadata or data about data, extraction, transformation and loading - ETL) -Maintenance & Change Management
Business Plans/models 7 typically common components
1. Core Products & Services 2. External forces: PESTEL-G 3. Markets, Customers & Facilities 4. Core Business Process: develop, produce, market & distribute 5. Alliances 6. Resource Management 7. Strategic Mgmt Process
Three Levels of Product:
1. Core product or benefit: 2. Actual product: - The parts, quality, features, design, brand name and other attributes received 3. Augmented product: - Additional consumer services & benefits built around the core & actual product - Adds value - Differentiates the product from its competition - E.g. Warrantees, installation
Oracle's 6 Phases in Implementation:
1. Definition & Team building: Norming... BUS 151 marketing 2. Operations Analysis: Understand the business. Pin-point bottleneck: Where there are problems in the business. Prototypes 3. Solution Design 4. Build/code 5. Transition - training & checking 6. Production
Major Components of security and control
• Security administration - In-house or outsourced, budgets • S.O.P's Standard operating procedure • Information Management - Ownership, custodians, security levels • Privilege Management - Access, r/w, Principle of Least Privilege • Physical Security • Logical access control • End-User Computing Policy • Software acquisition • Impact of Data Mobility: Jump drive • Personnel Mgmt • Security Monitoring
What types of characteristics of general controls are common across all applications?
• Security management • Physical & logical access controls ... • System Acquisition & Development controls • System maintenance & change controls • Operations control • Business continuity controls ...
BI data analysis
• Standard reports • Ad hoc Queries • OLAP Analysis (online analytic processing) • Data Mining
Flashback to Buyer Behaviour:
• Straight Re-buy: Repeat purchase, same product, same vender • Modified Re-buy: Product change, vendor change, large cost change • New Purchase • GUDBIP: Gatekeeper (Control access, information), user, decisionmaker, buyer, payer, influencer • RFP's & RFQ's: Request for proposal (request idea's to solve a problem - requires a criteria), request for a quote (purely for money)
CRM Implementation
• Takes months or even years, learning curve • Political, cultural & technological concerns • Needs management buy in • Attitudinal change • Touch points need reviewed • As CS Agents become sellers, compensation has to change
E-Bus Strategy
• The 7 (or 8) components • Unique value proposition • Core & Distinctive competencies • Cost leadership vs. Product Differentiation • B2B, B2C, B2G not mutually exclusive
Analyzing data captured:
• Tools included in the CRM apps • Customer Intelligence ("More like information") • Analyst needs to understand strategy & industry • Intelligence looked at in light of company's strategic direction (CL vs. PD)
Aspects of CRM
• Use of technology to establish, develop, maintain & optimize relationships • Customer needs & desires • Tracking purchase history
Define disintermediation:
o Cutting out the middleman o E.g. Airlines have almost eliminated travel agents
Benefit of extranet
o Intra-organizational standards needed o Real-time information allows timely adjustments o Quicker replenishments/lower inventories
Benefits of a pull system
o Much faster communication Information flowing upstream to suppliers now
Benefits of ERP
o Synchronized data o Effective resource management
What is SCM?
• "coordinating & optimizing the flow of all products or services, information and finances among all players of the supply chain" BPR: Business process reengineering • Raw materials through to product delivery • Includes: forecasting demand, ordering, logistics, warehousing, manufacturing, outbound logistics, sales & delivery • Upstream, downstream and internally • Akin to logistics ...
Resource Management
• Acquisition, development & allocation • $, people (skills)
E-bus & Corporate Strategy Every strategy must take into account the following:
• Arenas • Vehicles • Differentiators • Pace... of growth/expansion • Economic Logic: Price elasticity of demand (New Rod Prices, Skimming, Penetration)
Trading Exchanges:
• Can be vertical (industry focus) or horizontal (product or service focus) • Private Exchange (specific buyers & sellers) • Public Exchanges • SAAS common offering
Integrating ERP
• Changes in interface system. Old systems: Legacy systems • Is the whole organization going ERP or Interfaces or Modifying existing systems • Standardization makes integration easier • "Best of Breed" ... existing might be better
Parts of data capture:
• Comes from those TOUCH POINTS • Web site - cookies, search results • call centre, • warranty cards, • service calls • Stored in CRM Data Warehouse
Common security goals
• Complying with service agreements • Complying with laws • Protecting data confidentiality • Protecting data from unauthorized modification • Logging transactions and data exchanges • Need documented and implemented Information access is genuine Verifying identity
Benefits of BI:
• Continuous not periodic mgmt. • Utilized by all functional areas (Mktg to track sales, life cycle, HR to identify key employees) • Improved Collaboration/Communication/information dissemination • Improved understanding of Customers
CRM process:
• Data Capture ... • Data Analysis ... • Strategic Decision Making • Implementation
Auction issues/requirements:
• Dynamic Pricing • Reserve prices • Full disclosure prior to auction • Seller should have ERP integrated for shipping and pricing information. Important to buyer for shipping costs etc • Up-to-date info/real time info to all participants (notification) • Security & Privacy • Payment systems
Goals of CRM
• Encourage repeat business • Loyalty • Easier selling (Correct channels, Customer knowledge) • Up-selling • Cross-selling • Sales force Automation • Improved customer service (touchpoints)
Auction types:
• English • American/Yankee: price, quantity & earliest bid time • Dutch: backwards... price drops and buyers bid on quantities as price drops. • Reverse auction buyer recieves bid from suppliers • Sealed Bid ... • Vickery ... pay price of "last loser"
Risks in IS
• Error • Fraud: Intentional and illegal • Malicious acts • Disasters (natural ones) • New Service - unknown processes, procedures • New Business Models - new unique risks • Revenue leakage, no real contact to improve poor image • New Processes - Extranet linkages with strict product specs. If we can't meet specs don't promises clientele we can deliever • New Technology • New Fulfillment Processes • Outsourcing IT activities
Security Policies
• Establish accepted transactions • Clearly defined • Standards that must be met (or surpassed) • Require updating regularly
Types of Communications (part of application) Controls:
• Establishes authenticity of sender & receiver • Message integrity • Encryption - 128 bit commonly used • Public and private keys • https • Message digests (message check total) • Digital Signatures - encrypted message digests
How does e-bus help us reach our objectives:
• Gap analysis (Closing gaps) • Risk analysis • Defining IT needs ... processes, infrastructure .. • Tactical plan • Measuring performance
Implementing ERP
• Hershey example of how not to do it (Timing, Capabilities) • "Systems sizing" • "Stress testing" - ERP can cause stress: Learning, internet access, etc • Training in ERP (while paying) Who can? Who is doing the job while others are in training? Overtime? Changes in performance standards
Why BI?
• Improved knowledge -> improved decision making -> higher profits • BI systems start with ERP (or other data) and add industry data, news and journal reports to allow for better analysis • Trend analysis • Data cleansing is easier
Benefits to business
• Increasing Sales • Reducing Costs • Improved Customer Service • Responding to Competitive pressures • Expanded Market Research
Managing ERP:
• Increasing scope -> Increasing complexity - Outsource - Create new separate entity - Management agreements with partners - Manage own part of the system
Types of Malicious Acts
• Infections - viruses, Trojan horses, worms • Unauthorized S/W - spyware, trapdoor, adware, keyloggers • Unauthorized uses of computers • Theft, sabotage, or destruction of hardware • Denial of service attacks: Group of hackers infliltrate too... change DNS • Passwords (capitals, numbers) • Website/server attacks • Electronic theft or sabotage of electronic data • Financial fraud
Enterprise-wide Systems
• Info access to all who need it no matter where they are physically. • Key concept is that all users have access to the same up-to-date information • Data collection with one piece of S/W to make organization, management & access easy. • ERP, SCM & CRM all examples • Middleware s/w that links 2 dif. Programs
CRM Technology concerns (along with political and cultural)
• Integration with legacy systems • Needs to be integrated with ERP • Call centres need access to data warehouse - Security issues - overseas • Computer Telephony Integration
Parts of a business continuity plan:
• Listing of potential disasters • Roles & responsibilities • Scripts, contact lists • Critical processing priorities • Backup plans, location and access • Power requirements, backups • Rebuilding procedures, timelines
VPN's: Virtual Private Network characteristics
• Login needed on Intra/extra can be hacked • VPN is secure encrypted connection • Tunnelling - the packets go on a predetermined route
B2B vs. B2C benefits
• Longer term agreements • Negotiation • Relationships established & maintained • Larger volumes & revenues • Customised web pages for larger customers
Outsource Issues:
• Loss of control • Unable to monitor • Conflict of interest • Loss of in-house expertise • Cultural differences • Unclear accountability
Process of eprocurement:
• Need identified • Product (or service) identified to fill the need (Identified thru catalogue, online...) • Identify a vendor (supplier selection and then approval) • Requisition created electronically • Forward requisition to signing officer (Who is the signing officer depends on $$) • Purchase order transmitted to vendor (Via EDI, secure channel ...) • Order filled, transported • Inventory updated, Invoice received (matched) • Payment made
Point of intranet:
• Open only to employees • Keeps routine crap off email • Allows posting of manuals etc • Updating personal information • Good intranet will avoid spam
Types of control
• Preventive, detective and corrective measures • 2 categories of controls (General/Applications) • Guided by company strategy, policies and procedures
Other online advertising
Classified Ads: Kijiji, Craigslist, Yellow Pages Display Ads: Banner ads, Low click-through Customizable (regions, content of host page) GIFS Animated graphic interchange format Barter agreements Buttons Interstitials (Popups/daughter windows (fullpage)) & Superstitials (In page popup) Multimedia: Streamed into online games, youtube etc Interactive: Click to play Ad Engines: Automatically update your ad, searches online for new info. Adware: Popups s/w installed on your computer Email/Spam (Opt in, database maintenance) Promotions
Sources of information:
Click-stream Analysis Cookies Electronic Wallets Web Server log files (http request, date, time, operating system, browser type, referrer URL) Web Bugs (clear GIFs) Transaction & User Profile Databases Social Media Infomediaries
Aspects of marketing metrics:
Click-through rates Conversion rate Referrer analysis Location analysis Customer profile analysis Shopping basket analysis
Advertising planning:
Content Choice of media Content of the message Outsourcing of creation
Benefits of Eprocurement:
Cost & Efficiency • Faster order times, convenience, time savings • Streamlining of internal processes • Reduction in paper work and bureaucracy Strategic Procurement • Long term, supplier relationships Authorized Suppliers • Fewer suppliers • Maverick Buying
Marketing issues:
Design to appeal to visitors (Use of multimedia, fonts, colour schemes etc Image of professionalism... Encourage use of features... ) Designing to gain trust (Ease of Navigation, Contact info (phone & email), location & pics, Testimonials, Logos of partners, Awards)
Social Network Metrics (KPI's):
Dialogue Advocacy Support Innovation
Where is the processing done?
Distributed processing systems • 2-tier (S & C) or • 3-tier (S & C + dedicated processing servers) or • Distributed data client servers
How to make a website visible:
Domain name Metatages Search engine registration Search Engine Optimization Online advertising Buy words in search engines or placement (search engine marketing)
BI planning phase:
Establish goals & align with corporate goals Specific success factors • Ease of use, scalability (ability of a system to maintain a set rate of performance as the number of users or volume increases), flexibility, performance, data quality & security
Marketing strategy implementation:
Execution & Evaluation Evaluation: E.g. visitor:purchase ratio, Click-through rates for banners Easy to change campaign
Aspects of multi-dimensional balanced scorecard (internal/external scorecards)
Financial Customer Internal process Learning & growth
How to start an e-strategy:
Get connected to the net Get a domain and register the name Get hosted Build a ecommerce presence
Why use metrics?
Help understand business model Guidance Motivation to do the right things Analysis of performance Means to reward performance/hold accountability
Limitations of metrics
If strategies change quickly metrics may irrelevant or misleading Measurement can be expensive Vulnerable to access or tampering (click fraud) Soft (qualitative) metrics not as accepted as hard data
Aspects of traffic metrics:
Information about: Traffic volumes, site usage, traffic sources, visitor attributes Measure of site's potential Basic unit that financial backers, advertisers & affiliates want to see. Hits, Page views, ad views & impressions, banner impressions, visits, unique visitors, users, time, and search engine ranking
Basic areas of application controls:
Input - Check digits (SIN Divisible by 10, Stud#), input checks, Parity Check Processing pg97 - Logs, control totals, hash (field expected to not change), time stamping Output - Distribution, access, printer use Storage - Logical access to databases etc. Access requests
Goods and services procured:
MRO Maintenance, Repair, Operating Travel services Computer equipment Production items
What opportunities do small business have in ecom?
Marketing Customer support Market intelligence Procurement Operations Sales transactions PR Employee retention and morale
Define asynchronous:
Not pre-defined order
Types of metics for different life-cycles include:
Number of visitors Length of visit Opt-ins for emails/newsletters Sales per visitor Cost per visitor
Steps of fulfillment/delivery:
Order fulfillment -Converts an order into a sale Order Processing Warehousing -Receiving, picking, organizing & packing Shipping & Transportation -Cost effective: lot sizing, packaging & transportation -RFID tags
Marketing strategy creation points:
PESTEL Political, Economic, Social and Technological analysis Porter 5 Forces: Threat of new entrants, threat of substitute products or services, bargining power of buyers, bargaining power or suppliers, intensity of competitive rivalry SWOT Segmentation Target markets Media choices
Types of access controls:
Physical & Logical Access Physical - Access to servers, tape storage etc. - Security features like cameras, alarms, etc. Logical - ID's, Passwords, Biometrics - CAPTCHA - Firewalls (double walls?) - Intrusion detection systems (false positives)
ERP Systems:
Requires specific format, which may be diferent than how the business originally ran • Switch from silo (marketing database is separate) to shared • Developing the system requires analysis of all processes • BPR • Vendors: Oracle, SAP, minor leagues - MSFT • Module based, drill down
Aspects of financial metrics:
Revenue, Expenses, ROI etc Standard accounting fare
Behavior analysis
Search methods, internet usage, shopping patterns, social networks..... Re-marketing Is it invasion of privacy or? Opt out or opt in?
Types of Online Research:
Secondary vs. Primary data (Surveys, Experiments: Easier online, Reaction to page layouts etc) Focus groups Observation (Click stream analysis)
Challenges of Ebusiness
Technological: Internet access, training Financial: Non-essential internet? Organizational: Leadership required Operational p346
Semantic Web:
Todays web with technology to understand and process human language
Types of metrics:
Traffic & site usage metrics Social network metrics Marketing metrics Financial metrics Other performance metrics Multi-dimension metrics
Define URL
Universal Resource Locator
Define Foreign Key:
When there is a relation between 2 tables, these tables will be connected by inserting the primary key of one table into the corresponding row of the other table. The field used in such a way to connect the 2 tables is called the foreign key.
Qualities of public key infrastructure:
• Public keys need stored and be accessible to everyone • Must be managed ... hence PKI • Stores & delivers PK's as needed • Provides privacy, security, authentication & support • Manages the generation & distribution of P/P key pairs and publishes the public ones
Parts of trust:
• Realignment (E.g. Vendor Managed Inventory) • Service-Level Agreements (Defines the relationship) • Performance Measurement • Dispute Resolution • Security (Responsibility)
Issues with integration
• Resistance • Sabotage • Timing • Resources • Delays
Characteristics of middleware
• Seamless • Built in to the applications • Enterprise Application Integration (Using middleware to join applications/Planning, implementing & managing applications ability to share info between/Legacy systems & ERP)
Alliances et al
Affiliates Partnerships Public Relations Trustmarks, Servicemarks & Seals Digitalized Word of Mouth Ex. Blogs
Collaborative & Inter-enterprise
Allow companies to interact: - Customers - Suppliers - With other team members (LotusNotes) - Competitors (ethical issues)
Define e-busines
Any business carried out in electronic form (via EDI)
Aspect of site usage metrics:
Assess the effectiveness of the website Leaky bucket analogy Site usage measures the leaks Spatial (Top entry page, Top exit page (leak), Most/least visited page, Paths within the site) Temporal analysis (By time, day, week or month, Correlation with promotions)
Traditional Payment Systems:
1. EDI • B2B used to use Value-added Networks - Privately owned network that is rented to users who then use them to connect with customers & suppliers (Replaced by Internet) - Linking corporate bank accounts 2. Cash (Portability, Acceptance, backed, anonymous, instant transfer) (Prepaid money cards/Digital currencies) 3. Digital Cash - Early attempt Ecash - Went bankrupt - Used public/private key encryption 4. Digital Cheques (Honourable?) 5. Credit Cards - Used to be net was used primarily for research - Personal profiles (+ from both perspectives) - HTTPS to send info - Online fraud 3* traditional (.14%) Moneris offers online payment solutions e.g. ... • Hosted pay pages • Shopping cart integration • Recurring payments • Vault token technology • Online fraud tools • Interac online 6. Debit Cards (Reloadable cards) - Still fraud issues 7. Smart Cards - Mondex & Visa Cash - Contains a microchip • Stores info on transactions & balance • Load @ bank or Mondex ATM • Use in person or online • Test marketed and coming soon • Contact and contactless PayPal - ebay • Businesses pay per transaction • Cheaper than credit card (iTunes example) Payoneer • 2007 • Prepaid debit cards • Global bank transfers • Local eWallets • International checks • Speedpass ... key fob • Electronic bill payments
Factors affecting SCM:
1. Globalization ... distances magnify problems 2. Mass customization ... efficient production 3. Price sensitivity ... cost control 4. Customer focus & Time to Market 5. J.i.T.(Just in Time) & Inventory reduction - cost of inventory vs. cost of stockouts.... Lag is the time it is ordered from the time it arrives. So you have a safety stock (Kaizen) 6. E.R.P. 7. Outsourcing - costs down but ...
Types of revenue models:
1. Merchant Model (Costco, HBC, Sears) 2. Direct sales by Manufacturer (Nike, Kraft, Dell) - Better margin 3. Manufacturer Service 4. Subscription (Netflix, Napster, newspapers) 5. Utility (pay as you go e.g. Skype) 6. Infomediary (checkout51, Snapsave) 7. Licensing (usually software) 8. Advertising (banner, popup, click through, search engines) 9. Affiliate (you scratch my back ...) 10. Community (tofino.ca) 11. Brokerage (10 ways inc: classifieds, virtual malls, auctions, brokers ...)
Stages of CRM implementation:
1. Planning (Cross functional team + consultants) 2. Process Redesign (Accuracy vs. speed) 3. Data Integration 4. Education (Technology and CRM training) 5. Analysis, Reporting 6. Analyzing (causal modelling) 7. Predicting 8. Change implementation (Using the information from above to change touch-points)
What is Logistics?
1. Right place 2. Right time 3. Right quantity 4. Right quality 5. Right price 6. Right condition 7. Right customer 8. Right product
Benefits of e-business models
1. Speed 2. Convenience 3. Customization 4. Redefinition of Product Value 5. Media flexibility
