B2B, B2C, B2E and E-Commerce Intranet

E-Commerce Definition

Technology- mediated exchanges between parties, individuals, or organizations as well as the electronically based intra or inter organizational activities that facilitate such exchanges.
Jaworski & Rayport

E-Commerce Subdivisions

B2B (Business-to-Business) B2C (Business-to-Consumer) C2C (Consumer-to-Consumer) B2E (Business-to-Employee)

B2B Definition

Companies buying from and selling to each other online While B2B exists both online and offline, the acronym is used to describe the online variety B2B has evolved to encompass supply chain management as many companies outsource parts of their supply chain to their trading partners

B2B Requirements

Negotiation Buyer and seller must negotiate price, delivery, and product specifications. Integration A companys system must be able to communicate with the system of their customer without human interaction.

B2B Exchange

A website where many companies can buy and sell to each other using a common technology platform. Many exchanges also offer additional services such as payment or logistics to help members complete a transaction Exchanges can be public or private

Public owned by industry organization or independent investors and have their own board of directors Private run by a single company for doing business exclusively with established suppliers and customers

Collaborative B2B

A business and its trading partners give each other real time access to ERP systems, product design, inventory, and other systems Integrating the supply chain

Benefits of B2B E-commerce

Manage inventory more efficiently Adjust more quickly to customer demand Get products to market faster Cut the cost of paperwork Obtain lower prices on some supplies

B2B Growth

B2B market is expected to experience significant growth B2B E-commerce is expected to reach $207 trillion in 2004, up from $406.2 billion in 2000. (Forrester Research, Inc.)

B2C Definition

Business that sells its products or services to consumers over the Internet for their own use.

Online Retailers (Amazon.com) Online Banking Travel Services Health Information Real Estate

Difference between B2B and B2C

The customer (business vs. individual) B2B transactions are more complex B2C does not require:

Negotiation for price, delivery, and product specifications Integration with other systems

Challenges of B2C E-commerce

Getting browsers to buy things Building Customer Loyalty Order Fulfillment Security Privacy

Addressing these Challenges

Getting Browsers to Buy Things

Improve navigation Simplify the checkout process Send e-mails with special offers Focus on personalization Create an easy-to-use customer service application Focus on making your site easy to use

Building Customer Loyalty

Addressing Challenges (cont.)

Fulfillment

Increase focus and investment on logistical systems and supply chain technologies SSL Technology Digital Signatures

Security

Privacy

Make privacy statements readily available to consumers Opt-out policy for collecting personal information

B2C Growth

B2C E-commerce is expected to grow from $38.8 billion in 2000 to $184.5 billion in 2004 (Forrester Research, Inc.)

C2C

A consumer sells products or services to another consumer via the Internet.

B2E Definition

An intrabusiness network which allows companies to provide products and/or services to their employees. Companies generally use B2E networks to automate employee-related corporate processes. B2E portal is a customized home page or desktop for everyone within an organization

One URL for everyone in the organization A mixture of organization-specific and employee-defined components The potential to be customized and altered to suit the needs of a particular employee

Examples of B2E applications

Online insurance policy management Corporate announcements Online supply requests Special employee offers Maintain employee resume Update employee records

E-Commerce Intranet

3 distinct Web-based technologies

Internet Intranet Extranet

What is the Internet?

Global computer network Everyone has access Growth of the Internet

Physically, a network of communications media

Millions of computers are connected to it Major line of communication is called the backbone. A network of copper lines, optical fibers, and radio satellites

The backbone is owned, augmented, and maintained by telecommunications companies and Internet service providers such as:

Verizon, Sprint, AOL, etc.

What is the Internet?

Figure 7.1 The Internet connects millions of servers.

Internet Domains

Static and Dynamic IP Numbers

Static IP number

Permanent IP number assigned to Servers and many other computers and devices. Intermittent connection to the Internet will be assigned a temporary IP number for duration of its connection only.

Dynamic IP number

Intranets and Extranets

Figure 7.7 An intranet, an extranet, and the Internet from an individual users perspective

Intranets and Extranets

Figure 7.8 Internet, intranet, and extranet potential for productivity enhancement

The Intranet

Prerequisites for the Successful Deployment of the Intranet:

Unified intranet strategy and architecture Secure and ubiquitous intra-enterprise connectivity Integration with legacy networks and applications Use of standards-based technology for network, security, and web-authoring. Common user interface based on a universal web client Implementation of enterprise-side policies on network access, security, content authoring, and management Management and user buy-in.

Intranet Components

The Wide Area Network (WAN) Component contains:

The physical connection to the internet The physical connection to a frame relay cloud The WAN router and network addressing schemes The configuration of frame relay Permanent Virtual Circuit on a WAN router The configuration of Internet-based Virtual Private Network on a WAN router or WAN firewall The WAN network routing protocol like Border Gateway Protocol (BGP) for external connection and Open Shortest Path First (OSPF) for internal connection Any questions on these connection concepts?

Intranet Components

The Local Area Network (LAN) Component consists of:

The LAN Technology (e.g., Ethernet) The LAN Topology (e.g., star, bus) The LAN router and network addressing scheme The LAN network routing protocol The LAN firewall and load-sharing components

Intranet Components

The Server and Application Software Component:

The intranet application servers and associated client servers The gateway server for protocol translation The high-resiliency design of the server component for high availability The backup server and associated backup hardware like the tape juke-box. ?

Intranet Components

The Security Component:

Air gap and firewall security techniques:

Air gap- security by isolation; internal network is not connected to the external network Firewall: Filter that screens and accepts or rejects connection requests

The corporate security framework and the security policies for internal and external connectivity The LAN and WAN firewalls and VPN setup The secure configuration of the intranet application and the server operating system The encryption, authentication and data integrity check methodologies.

Intranet Components

The Intranet Service Management Component:

The management of intracompany Service Level Agreements (SLAs) The management of SLAs with external service providers like Internet Services Providers (ISPs) and frame relay service providers. The internal network management and reporting systems The internal help desk and trouble ticketing system

Intranet

A private network that is open only to employees of a single organization. Internal communication vehicles and knowledge bases that serve as a company-wide information system. Intranets can improve information flow and keep costs down within a company.

3 Key Elements for Intranets

Intranets must be relevant and useful.

Find a balance between what executives want the employees to know and what the employees are interested in Employees should get the news first Intranet should be more dynamic than the external site

Intranets must be updated frequently.

Intranets must be backed by strong internal communication programs.

Must have support from top-level management Training

Extranets

A mechanism based on Internet and Web technology for communicating both privately and selectively with customers and business partners. Extranet extends a companys network beyond its boundaries to predetermined business partners, customers, suppliers, and others. Extranets provide a safe way to allow transactional business-to-business activities and can save time and money.

Extranet
Deployed as private networks to develop business-to-business relationships between vendors, partners, and customers. Extranet applications:

Online ordering *News and content Marketing and product information * Legacy database access Inventory management * ERP; supply chain managemt. Collaborative research and development * Collaborative scheduling Training, policy and standards * Customer service/self service E-mail and chat *Bulletin boards and groups Billing and account history *On-line financial transactions

Extranet Advantages

Advantages

Collaborative research and development (R&D) fosters better ties between partners and shorter time-to-market, thus reducing the product life cycle and increasing product competitiveness ERP and supply chain management streamline business processes Better customer support increases customer loyalty and weans customers from live representatives to cheaper self-help. Collaborative extranets foster team spirit among partners and customers, reduce cost of production, travel costs, and customer service, and improve the speed of communications speed. Customer/partner access to backend data improves efficiency Brings access to new markets through IP-based EDI participation

Extranet Development Considerations

Keep in mind, when developing extranets:

Security exposure to internal and partner networks and systems Ease of use Interoperable technology Ability to leverage legacy applications High availability (as the extranet applications become mission critical, it is important to maintain the constant availability of these applications). Network and extranet application performance as it scales upward Set correct expectations of network performance Legal considerations of connecting multiple systems and the potential impact on the current operation due to new setup.

Extranet Security

When two or more entities collaborate on the intranet:

Security has to cover all paths between parties Access to the extranet application server can be restricted to the partners and suppliers by

Using access control lists (ACLs) on the router, which is a part of the directory application. Using an authenticated application proxy via the firewall server shown in figure 1.1. In this scenario, the application server would be connected to one of the interfaces on the firewall server, instead of an interface on the router.

The choice of the solution depends on the desired level of access control and audit tracking capability.

Extranet Examples

Extranet Communities of Interests (COIs):

Vendors Partners Company

Customers drive relationships that the company establishes with vendors and partners Customer service/product quality first; cost-cutting second.

Extranet Examples

Supply Chain Process (SCP)

Since the SCP is almost completely automated. . .

Several departments get automatic notifications as a user request is processed through the chain For example, when the item is shipped from the supplier the production manager is notified of the arriving items, while the purchasing manager gets the shipping details and the invoice. When the item is received, the inventory is updated automatically.

SCP allows manufacturers to control inventory costs, while the procurement guys tighten forecasting and ordering SCP equally applicable to small or big purchases.

Extranet Examples

Extranet Success Stories:

McDonnell Douglass inventory management extranet provides access to 500 suppliers and tracks 80,000 parts and assemblies. Shells extranet manages inventories for its customers Cisco Systems allows customers to track and order equipment on-line based on a pre-negotiated relationship DaimlerChrysler in Japan allow its dealers to process orders over the extranet (very little traffic on this extranet) Courtyard Marriott provides marketing reports and operating manuals to all of its operators in the U.S. Pharmaceutical manufacturers allow hospitals, retail stores, and clinics access to order processing and inventory tracking systems.

Establishing an E-Commerce Web Site

Businesses have several options when establishing a Web site

Install own server

Dedicated Server

Contract an ISP site Contract a Web portal

Portal is a site that enjoys heavy traffic and often offers a search engine and general information

www.yahoo.com; www.lycos.com; www.msn.com, etc.

Establishing an E-Commerce Web Site

Options (continued)

Establish an electronic storefront

Virtual shopping mall on the Web

Contract with a Web hosting service Use a virtual Web server

Domain name points to server of another company

Set up a subdomain

Establishing an E-Commerce Web Site

Establishing an E-Commerce Web Site

E-Commerce Practices on the Internet

Business-to-Business Trading

Electronic Data Interchange (EDI)

Exchange of business information via computer networks. Exchange: Buyer may negotiate price with seller and negotiation is not done through public bidding Auctions: bidders compete for what is offered with higher and higher bids until a deadline. Companies operating in the same industry with a purpose of setting prices for purchased products and services for the whole group.
Rental of software

Exchanges and Auctions

Online Business Alliances

Application Service Providers (ASP)

E-Commerce Practices on the Internet

Business-to-Consumer Trading

Advertising

Traffic volume

Portals

E-Commerce Practices on the Internet

E-Commerce Practices on the Internet

Business-to-Consumer Trading

E-Retailing

Convenience Time saving Comparative shopping

E-Commerce Practices on the Internet

Figure 7.14 Web-shopping benefits

E-Commerce Practices on the Internet

Business-to-Consumer Trading (continued)

Auctions and Reverse Auctions Software Sales Stock Trading

E-Commerce Practices on the Internet

E-Government

Government-to-citizen transactions Government-to-government transactions Government-to-business transactions

People who have access to the Internet represent less than one-tenth of the worlds population (6.1 billion).

Web Demographics

Internet is still not a truly universal communications tool

E-Commerce Practices on the Internet

E-Commerce Practices on the Internet

Figure 7.16 Dos and Donts in Web site construction for commercial purposes

E-Commerce Practices on the Internet

Rules for Successful Online Business Transactions

Target the Right Customers Own the Customers Total Experience Personalize the Service Shorten the Business Cycle Let Customers Help Themselves Be Proactive

E-Commerce Practices on the Internet

Successful Business Models

Among the most successful we find the following types.

Niche retailing Sellers of hard-to-obtain information Click-and-mortar retailing

E-Commerce Practices on the Internet

M-Commerce (Mobile commerce)

Mobile devices need to use a special protocol to enable conversion of HTML (XML and other Web standards) into formats to display on mobile devices Wireless Access Protocol most common Privacy Issue

Commercial organizations can track you as long as your mobile device is on.

Ethical and Societal Issues:

Online Free Speech

Objectionable Materials

Adult-oriented material, defamatory and violent content Controversy over what may or may not be communicated through the Internet has much to do with culture and law. How do operators of a Web site please the legal system of their worldwide audiences

Anti Domains

Domain secured by people who wish to voice dissatisfaction with a commercial or political organization.

Spamming

Flooding a partys e-mail box with messages as a means of protest is disruptive.