8.E-commerce.

 

Exercise 9 .English Group Define the next items, establish relationships between them and find examples of usage: EDI, B2B, B2C, eprocurement, online auction, online catalogue, C2C, C2B, ecommerce, ebusiness, ebXML, ecommerce benefits, ecommerce limitations, ecommerce safety. You can use the lesson notes, www.e-global.es and Wikipedia.

 

We have also prepared a presentation in which we try to sum up the most important aspects of the exercise. See it here

 

EDI (Electronic Data Interchange)- an-company, application-to-application communication of data in standard format for business transactions.
Is a set of standards for structuring information that is to be electronically exchanged between and within businesses, organizations, government entities and other groups. The standards describe structures that emulate documents, for example purchase orders to automate purchasing. The term EDI is also used to refer to the implementation and operation of systems and processes for creating, transmitting, and receiving EDI documents.
Electronic Data Interchange (EDI) can be formally defined as 'The transfer of structured data, by agreed message standards, from one computer system to another without human intervention'. Most other definitions used are variations on this theme.
Despite being relatively unheralded, in this era of technologies such as XML web services, the Internet and the World Wide Web, EDI is still the data format used by the vast majority of electronic commerce transactions in the world.
Advantages of using EDI over paper systems
EDI and other similar technologies save a company money by providing an alternative to, or replacing information flows that require a great deal of human interaction and materials such as paper documents, meetings, faxes, etc. Even when paper documents are maintained in parallel with EDI exchange, e.g. printed shipping manifests, electronic exchange and the use of data from that exchange reduces the handling costs of sorting, distributing, organizing, and searching paper documents. EDI and similar technologies allow a company to take advantage of the benefits of storing and manipulating data electronically without the cost of manual entry

 

E-commerce- The use of computer networks, primarily the internet, to buy and sell products, services, and information.
Electronic commerce, commonly known as e-commerce or eCommerce, consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks. The amount of trade conducted electronically has grown extraordinarily since the spread of the Internet. A wide variety of commerce is conducted in this way, spurring and drawing on innovations in electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at some point in the transaction's lifecycle, although it can encompass a wider range of technologies such as e-mail as well.
Electronic commerce that is conducted between businesses is referred to as Business-to-business or B2B. B2B can be open to all interested parties (e.g. commodity exchange) or limited to specific, pre-qualified participants (private electronic market).
Electronic commerce is generally considered to be the sales aspect of e-business. It also consists of the exchange of data to facilitate the financing and payment aspects of the business transactions.

 

 

E-commerce definitions:
a) Business-to business (B2B) Both sides of the transaction are businesses, non-profit organizations, or governments.

Information Offered by Business-to-Business Applications
Product - drawings, specifications, video or simulation demonstrations, prices
Production Processes - capacities, commitments, product plans
Transportation - carriers, lead times, costs
Inventory - inventory tracking, levels, costs, and location
Suppliers - product catalogue, quality history, lead times, terms, and conditions
Supply Chain Alliances - key contact, partners’ roles and responsibilities, and schedules
Supply Chain Process and Performance - process descriptions, performance measures such as quality and delivery
Competitor - -benchmarking, competitive product offerings, market share
Sales and Marketing - point-of-sale (POS) data entry, promotions, pricing, discounts
Customer - sales history and forecasts

B2B Standarts: ebXML Electronic Business using eXtensible Markup Language, commonly known as e-business XML, or ebXML, a family of XML based standards sponsored by OASIS and UN/CEFACT whose mission is to provide an open, XML-based infrastructure that enables the global use of electronic business information in an interoperable, secure, and consistent manner by all trading partners.

 

b) Business-to-consumer (B2C) E-commerce transactions where customers are individual consumers

Business-to-consumer (B2C, sometimes also called Business-to-Customer) describes activities of E-businesses serving end consumers with products and/or services. It is often associated with electronic commerce but also encompasses financial institutions and other types of businesses. B2C relationships are often established and cultivated through some form of Internet marketing.

Challenges faced by B2C e-commerce
The two main challenges faced by B2C e-commerce are building traffic and sustaining customer loyalty. Due to the winner-take-all nature of the B2C structure, many smaller firms find it difficult to enter a market and remain competitive. In addition, online shoppers are very price-sensitive and are easily lured away, so acquiring and keeping new customers is difficult.

A study of top B2C companies by McKinsey[citation needed] found that:

Top performers had over three times as many unique visitors per month than the median. In addition, the top performer had 2,500 times more visitors than the worst performer.
Top performers had an 18% conversion rate of new visitors, twice that of the median.
Top performers had a revenue per transaction of 2.5 times the median.
Top performers had an average gross margin three times the median.
There was no significant difference in the number of transactions per customer and the visitor acquisition cost.

 

c) Consumer-to-consumer (C2C) Consumers sell directly to each other.

Consumer-to-consumer (or C2C) electronic commerce involves the electronically-facilitated transactions between consumers through some third party. A common example is the online auction, in which a consumer posts an item for sale and other consumers bid to purchase it; the third party generally charges a flat fee or commission. The sites are only intermediaries, just there to match consumers. They do not have to check quality of the products being offered.

Examples of C2C
eBay
Craigslist
Amazon.com

Universities
C2C are becoming more popular amongst students in universities because these are large communities in the same geographical region that are low on money. So they are looking for deals very often and these kinds of websites offer this. Universities themselves set up places for students to sell textbooks and other stuff to other students, you can even advertise that you are subletting your apartment. An example of this from above is Tiger books and Dalhousie University Classifieds, both of these are put together by the school itself for the students. go to the county fair this weekend!

 

d) Consumer-to-business (C2B) Individuals sell services or goods to businesses

Consumer-to-business (C2B) is an electronic commerce business model in which consumers (individuals) offer products and services to companies and the companies pay them. This business model is a complete reversal of traditional business model where companies offer goods and services to consumers (business-to-consumer = B2C).

This kind of economic relationship is qualified as an inverted business model. The advent of the C2B scheme is due to major changes:

Connecting a large group of people to a bidirectional network has made this sort of commercial relationship possible. The large traditional media outlets are one direction relationship whereas the internet is bidirectional one.
Decreased cost of technology : Individuals now have access to technologies that were once only available to large companies ( digital printing and acquisition technology, high performance computer, powerful software)

 

E-commerce safety:
Serious issue!
Multiple deprivation of service attacks on e-commerce web sites 2/6 - 2/11, 2000
Security of data, proprietary business information
Impact on the volume of sales and on the bottom line.

 

E-commerce economics:
reduces cost by improving communication and disseminating economically valuable information
increases economic efficiencies by matching buyer and seller
reduces barrier to entry
reduces time constraints in transactions
technology costs money, IT staff are hard to find and expensive!

 

E-commerce benefits:
Improved, lower cost information
Lower entry costs
Available 24/7, virtually anywhere in the world
Availability expands markets for both buyers and sellers
Decreases the cost of paper-based information
Reduces the cost of communication
Provides richer communication than traditional means
Fast delivery of digitized products
Increased flexibility of location

 

E-commerce limitations:
Lack of system security, reliability and standards
Lack of privacy
Insufficient bandwidth
Integrating e-commerce software with existing software is still a challenge
Lack of trust in (1) unknowns on the other end of the transaction, (2) integrity of the transaction itself, and(3) electronic money that is only bits and bytes

 

Government regulations
In the United States, some electronic commerce activities are regulated by the Federal Trade Commission (FTC). These activities include the use of commercial e-mails, online advertising and consumer privacy. The CAN-SPAM Act of 2003 establishes national standards for direct marketing over e-mail. The Federal Trade Commission Act regulates all forms of advertising, including online advertising, and states that advertising must be truthful and non-deceptive.[1] Using its authority under Section 5 of the FTC Act, which prohibits unfair or deceptive practices, the FTC has brought a number of cases to enforce the promises in corporate privacy statements, including promises about the security of consumers’ personal information.[2] As result, any corporate privacy policy related to e-commerce activity may be subject to enforcement by the FTC.

 

E-business- “… all about cycle time, speed, globalization, enhanced productivity, reaching new customers and sharing knowledge across institutions for competitive advantage.” Louis Gerstner,Chairman, IBM
Is not simply business as usual with computers: a new way of looking at doing business.
The specific environment within which the problems must be solved requires changes in the solutions.

Electronic Business, commonly referred to as "eBusiness" or "e-Business", may be defined broadly as any business process that relies on an automated information system. Today, this is mostly done with Web-based technologies. The term "e-Business" was coined by Lou Gerstner, CEO of IBM.

Electronic business methods enable companies to link their internal and external data processing systems more efficiently and flexibly, to work more closely with suppliers and partners, and to better satisfy the needs and expectations of their customers.

In practice, e-business is more than just e-commerce. While e-business refers to more strategic focus with an emphasis on the functions that occur using electronic capabilities, e-commerce is a subset of an overall e-business strategy. E-commerce seeks to add revenue streams using the World Wide Web or the Internet to build and enhance relationships with clients and partners and to improve efficiency using the Empty Vessel strategy. Often, e-commerce involves the application of knowledge management systems.

E-business involves business processes spanning the entire value chain: electronic purchasing and supply chain management, processing orders electronically, handling customer service, and cooperating with business partners. Special technical standards for e-business facilitate the exchange of data between companies. E-business software solutions allow the integration of intra and inter firm business processes. E-business can be conducted using the Web, the Internet, intranets, extranets, or some combination of these.

 

Applications can be divided into three categories:

 

 

 

Models
When organizations go online, they have to decide which e-business models best suit their goals. [1] A business model is defined as the organization of product, service and information flows, and the source of revenues and benefits for suppliers and customers. The concept of e-business model is the same but used in the online presence. The following is a list of the currently most adopted e-business models:

E-shops
E-procurement
E-malls
E-auctions
Virtual Communities
Collaboration Platforms
Third-party Marketplaces
Value-chain Integrators
Value-chain Service Providers
Information Brokerage

Classification by provider and consumer
Roughly dividing the world into providers/producers and consumers/clients one can classify e-businesses into the following categories:

business-to-business (B2B)
business-to-consumer (B2C)
business-to-employee (B2E)
business-to-government (B2G)
government-to-business (G2B)
government-to-government (G2G)
government-to-citizen (G2C)
consumer-to-consumer (C2C)
consumer-to-business (C2B)
It is notable that there are comparably less connections pointing "upwards" than "downwards" (few employee/consumer/citizen-to-X models).

 

E-Procurement- Purchasing or order release communicated over the internet or via approved online vendor catalogues
Significant savings (10%)
Requires new skills and staffing in procurement area

E-procurement (electronic procurement, sometimes also known as supplier exchange) is the business-to-business or business-to-consumer purchase and sale of supplies and services through the Internet as well as other information and networking systems, such as Electronic Data Interchange and Enterprise Resource Planning. Typically, e-procurement Web sites allow qualified and registered users to look for buyers or sellers of goods and services. Depending on the approach, buyers or sellers may specify costs or invite bids. Transactions can be initiated and completed. Ongoing purchases may qualify customers for volume discounts or special offers. E-procurement software may make it possible to automate some buying and selling. Companies participating expect to be able to control parts inventories more effectively, reduce purchasing agent overhead, and improve manufacturing cycles. E-procurement is expected to be integrated with the trend toward computerized supply chain management.

E-procurement is done with a software application that includes features for supplier management and complex auctions. eBay's tools for its sellers have similar features.

Advantages and disadvantages
Advantages include getting the right product, from the right supplier, at the right time, for the right price and the right quantity. In reality e-procurement has the advantage of taking supply chain management to the next level, providing real time information to the vendor as to the status of a customer's needs. For example, a vendor may have an agreement with a customer to automatically ship materials when the customer's stock level reaches a low point, thus bypassing the need for the customer to ask for it. A major disadvantage to this type of agreement could be that the vendor has the power to take advantage of the customer by knowing more information about the customer than they would have if the customer was in a normal supply chain management structure.

 

Online Catalogues- Information about products made available in electronic form via the Internet.
Often incorporate voice and video

 

Online Auctions- Useful for disposing of excess raw material, and discontinued and excess inventory
Online auctions lower entry barriers and increase the potential number of customers

The online auction business model is one in which participants bid for products and services over the Internet. The functionality of buying and selling in an auction format is made possible through auction software which regulates the various processes involved.

eBay, the world's largest online auction site, is one of the better known examples. Like most auction companies, eBay does not actually sell goods that it owns itself. It merely facilitates the process of listing and displaying goods, bidding on items, and paying for them. It acts as a marketplace for individuals and businesses who use the site to auction off goods and services.

Several types of online auctions are possible. In an English auction the initial price starts low and is bid up by successive bidders. In a Dutch auction, multiple identical items are offered in one auction, with all winning bidders paying the same price -- the highest price at which all items will be sold (treasury bills, for example, are auctioned this way). Almost all online auctions use the English auction method.

 

Companies that use the model:
eBay headquarters in San Jose, California.Allegro
Amazon.com
Bideup
Bidorbuy
Bidtopia
DoveBid
eBay
eBid
Globalbidstore
Overstock.com
Oztion
Prosper.com
TradeMe
Tradus (former QXL)
SalvageSale, Inc.
uBid
Yahoo! (Yahoo! Auctions is defunct in America, but remains active in other countries such as Japan.)[5]

 

 

arriba arriba