5.1 Overview of E-Business and E-Commerce

DEFINITIONS AND CONCEPTS

Although people think that e-commerce and e-business are the same, technically, e-business refers to a broader definition of e-commerce.

E-commerce (EC)- describes the process of buying, selling, transferring, servicing or exchanging products, services, or information via computer networks.
E-business- refers not only to buying and selling of goods and services, but also servicing customers, collaborating with business partners, conducting e-learning and conducting electronic transactions within an organization.

EC can take several forms depending on the degree of digitization. The degree of digitization can relate to: (1) the product (service) sold, (2) the process, or (3) the delivery agent (or intermediary). In traditional commerce, all three dimensions are physical. Purely physical organizations are referred to as brick-and-mortar organizations. If there is at least one digital dimension, then it is called partial EC.

TYPES OF E-COMMERECE TRANSACTIONS
The common types of e-commerce transactions are the following:
1. Business-to-business (B2B)- both sellers and the buyers are business organizations. (e.g. Dell and ASUS)
2. Collaborative commerce (c-commerce)- business organizations/partners collaborate electronically. (e.g. airline companies)
3. Business-to-consumers (B2C)- sellers are organizations and the buyers are individuals. (See http://appstatebryce.blogspot.com/) (e.g. Pizza Hut and us)
4. Consumer-to-consumer (C2C)- individuals sells products or services to other individuals. (e.g. EBay)
5. Business-to-business-to-consumers (B2B2C)- business sells to a business but delivers the product or service to an individual consumer. (e.g. Amazon)
6. Consumers-to-businesses (C2B)- consumers make known a particular need for a product or service, and suppliers compete to provide the product or service to consumers. (e.g. Priceline)
7. Intrabusiness (interorganizational ) commerce- organization uses EC internally to improve its operations. (e.g. company's website where you can do your supply request, etc.)
8. Government-to-citizens (G2C) and to others- government entity provides servicesto its citizens via EC technologies. (e.g. USPS, FAFSA, etc.)

MAJOR BUSINESS MODELS OF EC
1. Value-chain integrators- Integrators aggregate information and package it for customers, vendors, or others in the supply chain.
2. Online auctions- Businesses conduct online tendering, requesting quotes from suppliers.
3. E-classified- presentation of items for sale at fixed prices. Popular sites are craiglist.com and classifieds2000.com.
For more major business models of EC, visit www.digitalenterprise.org/models/models.html.

BRIEF HISTORY OF EC
1. Early 1970s- EC applications began in the early 1970s with such as innovations as electronic transfer of funds (ETF). Then came along electronic data interchange (EDI).
2. Early 1990s- EC applications expanded rapidly, following the commercialization of the Internet and the introduction of the Web.
3. Over the last 12 years- EC has continuously added products and services.

THE SCOPE OF EC
1. People- e.g. sellers, buyers, intermediaries and any external participants.
2. Public policy- legal and other policy and regulating issues that are determined by the government and by international agreements.
3. Marketing and Advertising- EC requires the support of marketing and advertising, like any other business.
4. Support Services- Many services, ranging from payments to order fulfillment, are needed to support EC.
5. Business partnerships- joint ventures, e-marketplaces and business partnerships are common in EC.

BENEFITS OF E-COMMERCE
The following are the benefits of e-commerce. Note that the information delineated below are just few of the many benefits that e-commerce offers.

To Organizations
1. Shortens or even eliminates marketing distribution channels, making products cheaper and vendors' profits higher.
2. Enables companies to procure material and services from other countries, rapidly and at less cost.
3. Help some small businesses compete against large companies.

To Customers
1. Makes it possible for people to work and study at home.
2. Makes possible electronic auctions that benefit buyers and sellers.
3. Retrieves relevant and detailed information.

To Society
1. Allows some merchandise to be sold at lower prices, therby increasing people's standards of living.
2. Enables individuals to work at home and to do less traveling, resulting in less road traffic, less energy use and less air pollution.

LIMITATIONS OF E-COMMERCE
As we all know there is always two sides of a coin. In the e-commerce example, though there are benefits attached to the use of e-commerce, there are also limitations/disadvantages attached to e-commerce. The following are few of the many limitations of e-commerce.

Technological Limitations
1. Insufficient telecommunications bandwidth.
2. Still-evolving software.
3. Need for special Web servers in addition to the network servers.
4. Lack of unversally accepted standards for quality, security, and reliability. 5. Some websites require softwares/application programs that are not readily available on a standard browser.6. Limitations of access using, dial-up, ISDN, cable or wireless connections.

Nontechnological Limitations
1. Some unresolved legal issues
2. Some unresolved ethical issues
3. Perception that EC is expensive and unsecured.
4. Many sellers and buyers waiting for EC to stabilize before they take part.
5. An insuffficient number of sellers and buyers exists for many EC products and services. 6. People's resistance to change especially when change comes with acquiring new knowledge for such specific change.
7. Information is limited to what is posted on the website. People may want more or they may ask for more information.
8. Wrongful use of personal information.

Most pieces of information contained in this specific blog were obtained from Information Technology for Management Transforming Organizations in the Digital Economy 6E by Turban, Leidner, McLean and Wetherbe

Boeing and the Virtual Collaboration

Everybody knows that Boeing is in the business of manufacturing airplanes. But not so many of us know that in 2007, it partnered with over 40 agencies from all over the world to develop a groundbreaking project known as the "787 Dreamliner". What's interesting about this project is that all agencies including Boeing did not need to meet in a single location. Some people may think that it is impossible. The truth is, with information technology anything is possible. They certainly work I.T. in their advantage. They explored and utilized "VIRTUAL COLLABORATION" to realize this project. They certainly adopted it with such perfection.

http://www.designnews.com/article/13616-Boeing_s_Global_Collaboration_Environment_Pioneers_Groundbreaking_787_Dreamliner_Development_Effort.php

-------------------------------------------------------------------------------------------------
In its effort to create a groundbreaking project called “787 Dreamliner”, Boeing collaborated with Alenia Aeronautica, Fuji Heavy Industries Ltd., Aerosystems Inc., and some other 40 global partners. These companies participated in a virtual development world where all aspects of the plane are designed, created and tested digitally before anything physically moved into production. Although it may seem impossible and/or tedious to develop such revolutionary project in the eyes of some individuals, with the advancement in information technology, nothing is impossible and everything is bound to happen. In this case, information technology works itself under the disguise of what is called as virtual collaboration.

With the use of virtual collaboration, Boeing and other partner companies were not only be able to decrease the costs of communicating with and gathering people around the world, it also helped them to gather the best set of individuals from different parts of the globe who had the knowledge and the capabilities to make this groundbreaking project possible. According to Wikipedia, virtual collaboration taps into a global network of intelligence. In short, with virtual collaboration, it is inevitable to gather the right people, with the right skills and right experiences at the right time. With virtual collaboration, Boeing and the other companies would be able to avoid any possible errors and/or unforeseen difficulties that would inevitably occur when these companies exchange information between different CAD tools. As Fowler said in the article, virtual collaboration was one way to ensure that the global team of partners would have access to the same product definition data and be able to collaborate effectively on a 24/7 basis from their various locales.

In my opinion, the benefits of utilizing virtual collaboration by Boeing and its partners truly outweigh the drawbacks that this collaboration may present (e.g. expenses, training of people in using this technology). I believe that for a company, like Boeing, that values time or understands the costs associated with delayed projects, virtual collaboration seems to be the perfect solution. Taking into account all the statements aforementioned earlier, it is clear that virtual collaboration avoids any delays, miscommunication among parties, among others. I believe that in a globally competitive and fast-paced environment of airline manufacturing, virtual collaboration is one of the best decisions that Boeing has ever made.

Photo (right) was taken from http://airlineworld.wordpress.com/2007/07/09/787-dreamliner-revealed/
Photo (left) was Lufthansa Technik's proposed master bedroom for a Boeing 787 Dreamliner. The photo was taken from http://images.google.com/imgres?imgurl=http://www.canadianmarketingblog.com/17megajets%255B1%255D.xlarge1.jpg&imgrefurl=http://www.canadianmarketingblog.com/archives/2006/11/justification_for_a_higher_edu_1.html&h=300&w=600&sz=50&hl=en&start=16&um=1&usg=__8x-YUj_Z-jPtWbi0hXkfmuvwE_Y=&tbnid=B2JwbqQaj6VdsM:&tbnh=68&tbnw=135&prev=/images%3Fq%3Dboeing%2B787%2Bdreamliner%26um%3D1%26hl%3Den%26sa%3DN

Minicase 2.2

1. What were the major reasons the company had to use SOA?
A. The company wanted to maintain competitive advantage by adopting an application that can:
a. Support 50,000 simultaenous users
b. Improve application response time to less than a second
c. Be made in 90 days or less

2. In what ways did they gain competitive advantage by using SOA?
By using SOA, the company was able to quickly and easily collect and analyze data from multiple sources.

3. What specific services can you identify in a business like this?
In a business like this, the kind of services that can be identified is a service that offers consumers credit reporting, credit scoring and related financial services on both its own and its partners' Websites.

4. Why is it so important to serve 50,000 simulatenous users?
I believe that it's important to serve 50,000 simulatenous users because of the fact that everyday, every single hour and every single minute thousands of people are requesting services like credit reporting, credit scoring and other things of that nature. Because of this, the company needs to ensure that there is a sufficient amount of available users supply to serve the consumers. It is a fact that when access to a server is limited to small number of users, the server or system tends to process slow, which would create backlog and problems for the company, would create complaints from customers and other concerns. In truth, no company would want to experience these problems.

5. Classify this application using the material in Section 2.2.
I would classify the application as communication and collaboration system, a system where employees and customers can interact and work together more efficiently. I would also classify this as document management system, where electronic documents, in this case the credit reports, scores, etc., can easily be obtained for the consumers.

DUKE ENERGY- PART II.B (The Essay)

Out of all the companies I've known, only Duke Energy seems to be straightforward and simple with its goal(s). Many companies tend to have a dozen of goals, but Duke Energy has only one, yet this one goal clearly speaks what the company is all about and what it is made of. This goal is "to build our bridges to a low-carbon future". This is where less-is-better principle applies. There's no doubt that its goal is related to its operational, managerial and strategic activities.

The Goal and The Operational Activities- Duke energy is in the operation of providing electricity to its consumers. It is a fact, though many people may not believe, that the adverse effects of providing electricity are the by-products of providing electricity itself (i.e. greenhouse gas(GHG), carbon dioxide (CO2). This is why I believe that its goal is directly related, without a doubt, to its operational activities.

The Goal and The Managerial Activities- The way I see Duke Energy's managerial activities is by looking at its efforts in investing and building new generation plants, developing its talent base and engaging with stakeholders to understand all viewpoints and find the best path to suistanable carbon reduction. I believe that the goal is related to the managerial activities because all the activities delineated above will inevitably result in having a low-carbon future. It will result in a low-carbon future because it is investing in generation plants that produce low-carbon, developing a workforce that can succesfully transition to a low-carbon future and communicating with stakeholders for recommendations and other actions to achieve a low-carbon future.

The Goal and The Strategic Activities- Duke Energy takes a different route in terms of achieving its goal by implementating a number of revolutionary strategic activities. Its strategic activities not only include investing in technologies and its people but also shaping the country's public policy and taking the stand that the sooner it starts, the greater the benefits. Duke Energy, as a strategy to achieving its goal, is pursuing passage of federal carbon legislation that will give electric utility industry the time it needs to make the transition to low carbon generation, without severe damage to the economy and customers. This, I believe, is how its goal is related to its strategic activities.

I believe that most of the burden in ensuring that activities are implemented accordingly are the executives and the managers. I believe that to make a sound decision, one needs to know the activities from the past up to the present. As for me, I believe that the best way by which they can effectively fulfill their roles is through the application of business intelligence. Because business intelligence, as a form of information system,can provide historical and current data, situations and performance, it will be able to provide the managers and the executives the valuable insights so they can make better decisions, which would affect the activities described above.

Some information were obtained from the website of Duke Energy.

WALMART- PART II.A (The Essay)

I've come to realize that mother Earth is not getting any better. I've come to realize that companies should not be only focusing with profits but also thinking of things that they can do to save the ailing world, a world that cries for help and that begs for consideration. Through the help of my teammates and without their knowings, we've chosen two companies that care or started to care for the environment: Walmart and Duke Energy.

Be shocked but don't be cynical. Walmart is going green for good. Like people, companies change for the better and Walmart is starting to do that. The goals seem to be far-fetched and idealistic but nevertheless, these are the kind of goals that the world's biggest retailer wants to achieve. One question remains: How do Walmart's goals relate to its operational, managerial and strategic activities? I believe that the following are the answers:

Operational Activities and Walmart's Goals- Walmart is attached to almost anything from electronics to school supplies. Its goals are related to its operational activities in that this company's operations or the arrays of goods and services it provides directly tie back to its goals. For example, Walmart is known for transporting goods by land using trucks, which are a part of its current goals. Walmart provides a variety of natural products, which are obtained from the environment, which is the primary focus of the current goals.

Managerial Activities and Walmart's Goals- Though many people are unaware or simply do not care, Walmart has been investing approximately $500 million annually in technologies and innovation to fulfill its store goals. Walmart has also indicated that it is adoptiong a stting and construction policy in the next 12 months that addresses environment, social and historical considerations. In my opinion, these are two of the many decisions that reflect managerial activities of Walmart, decisions that play a vital role in achieving its goals.

Strategic Activities and Walmart's Goals- Walmart's goal is related to its strategic activities in a way that Walmart is taking strides or actions that are environmentally sound and safe. Walmart indicated that it has been looking at innovative ways to reduce greenhouse effects gas emission and it is taking responsibility for its actions (e.g. if its trucks are inefficient from a fuel standpoint, it'll pay for that at the diesel pump). These are the kinds of strategic activities that, I believe, will not only positively affect the way the corporate world views Walmart but will also help it to achieve its internal goals.

Walmart is worth more than $228 billion based on market capitalization and to effectively support all the aforementioned activities means that the kind of information technology that needs to be instituted are the very large and special systems. This allows each department to have its own system in placed (e.g. accounting department will utilize accounting information and operations department will utilize operational decision support system). This will allow departments to fully and effectively utilize systems that are exclusive for them. In then end, the performance of the departments will likely increase with the help of the information technology and in turn, will effectively and efficiently support the activities of the company.

Some information were obtained from http://www.treehugger.com/files/2006/05/its_getting_har.php

Duke Energy and Walmart. PART I (Mission & Goals)

It took our group almost ten minutes to pick the two companies that we would want to discuss and we ended up with the notorious and the always-in-discussion "Walmart" and the silent yet essential in every business' business "Duke Energy."

WALMART
Mission- To help people save money so they leave better.
Goals:
1. Environment
A. To be supplied 100% by renewable energy.
B. To create zero waste.
C. To sell products that sustain our resources and environment.
2. Trucks
A. To increase fleet efficiency by 25% over the next 3 years and double it within ten years.
3. Stores
A. To reduce greenhouse gases at our existing store, club and DC base around the world by 20% over the next 7 years.
4. Waste
A. To reduce solid waste from U.S. stores and clubs by 25% in the next 3 years.
B. To work with suppliers to create les packaging overall, increase product packaging recycling and increase use of post-consumer material.
C. To replace PVC packaging for our private brands with alternatives that are more sustainable and recyclable within the next 2 years.

DUKE ENERGY
Mission- We make people's lives better by providing gas and electric services in a sustainable way. This requires us to constantly look for ways to improve, to grow and to reduce our impact on the environment.
Goals:
1. To build our bridges to a low-carbon future.