E-Business Fundamental

Cindy Himawan
President University
Evolution of e-business- How It Started
 Its started with Electronic data interchange (EDI) - electronically transfer
routine documents (application enlarged pool of participating companies to
include manufacturers, retailers, services)
 1970s: innovations like electronic funds transfer (EFT) - funds routed electronically
from one organization to another (limited to large corporations)
 1990s: the Internet commercialized and users flocked to participate in the form
of dot-com, or Internet start-ups
 1997: Introduction of a brand new phrase – e-business
 1999: The emphasis of e-business shifted from B2C to B2B

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Evolution of e-business (cont’d.)
 2001-2010: The emphasis shifted from B2B to B2E, c-
commerce, e-government, e-learning, and m-commerce.
 In 2004, online sales accounted for 7 percent of all retail sales.
 In February 2005, Forrester Research projected that online retail
sales would reach $316 billion by 2010, more than doubling the
sales in 2004.
 The latter half of the 21st century's first decade saw the emergence
of mobile commerce, which is the use of mobile devices for
business and advertising. Collectively, e-commerce and m-
commerce combined for significant growth in customer access
to promotional messages, shopping platforms and research
information often contributing to in-store purchases.
 More small-business start-ups emerged thanks to the ability to set
up an online shop through various third-party providers and
offer products out of the home to a global audience.
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Evolution of e-business (cont’d.)
 2011-2012:Total online shopping and transactions in the United States
between $7 to $10 trillion
 2013-2014: Electronic business growth remained strong as of early 2013.
 Forrester revised its somewhat ambitious forecast in early 2010 to indicate
expected online sales of $250 billion by 2014.
 Online retail sales were expected to grow by about 10 percent per year
through 2014, at which point the Internet will account for 8 percent of all
retail sales.
 Advertisers poured more than $40 billion into online advertising during
2012.
 2015-2016: The year of m-commerce
 As online sales continue to grow, the platform on which those sales take place
is slowly migrating from desktop and laptop computers (“traditional” e-
commerce) to mobile devices such as tablets and smartphones
 E-business will undoubtedly continue to shift and change

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Digital Evolution

source: Embracing the Internet of Everything To Capture Your Share of $14.4 Trillion, CISCO 2013
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The Internet of Things has the Power to
Revolutionize Everything…

Starting with a SMART HOME …

Source: https://www.11880-elektriker.com/ratgeber/hausautomation/smart-home-systeme

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… smart factory

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… smart City

Source: https://www.linkedin.com/pulse/smart-city-blueprint-confluence-dynamic-master-plan-chakrabarti

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Disruption Example

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Disruption Example (cont’d)

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Disruption Example (cont’d)

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Key different between old and new economy

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E-Business is the use of technology to reengineer and
improve the vital business process of the enterprise

E-Business:
Improving business performance
through low cost and open connectivity
• Deploying new technologies in the
value chain to achieve
transparency/visibility
E-Commerce: • Connecting the value chain between
Marketing, buying, and and across external businesses and also
selling of products and between business partners
services over the internet
In order to :
• Simplify production processes, product
designs, and factory organization
• Automate production processes and
the
business functions that support them
• Integrate all production and support
processes using

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Enterprise area of E-Business

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Enterprise area of E-Business
 Enterprise Resource Planning (ERP)
 Concentrates on the efficiency of internal production, distribution,
and financial processes
 Customer Relationship Management (CRM)
 Focuses on acquiring and retaining profitable customers via
marketing, sales, and services
 Partner Relationship Management (PRM)
 Aims at acquiring and retaining partners who can enhance the selling
and distribution of products and services
 Supply Chain Management (SCM)
 Focuses on developing the most efficient and effective sourcing and
procurement processes
 Knowledge Management (KM)
 Focuses on facilitating internal group collaboration and decision
support

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ERP Systems

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Supply Chain Management (SCM)

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Impact of E-Business
 Increasing efficiency of procuring raw materials
 Reductions in product costs
 Better communications with supply chain partners
 Increased efficiency from streamlining the supply chain
process
 Better quality service provision and delivery
 Better information on product availability, quality and
price.

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E-Business Adoption Stages

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Seven Value Creation Strategy
1. Online purchasing strategy: allows for buying and selling
of products and information on the Internet and other
online services.
2. Digital communication strategy: allows for delivery of
digital information, products, services, or payments online.
3. Service strategy: allows for the cutting of costs,
improving of the quality of goods, and increasing the speed
of service.
4. Business process strategy: allows automation of
business transactions and work flows.
Seven Value Creation Strategy (cont’d)

5. Market-of-one strategy: allows for developing products

for a single customer with close to the same costs as mass
production.
6. Auction based strategy: allows automation of bidding for
products or customers online.
Example: www.eBay.com
7. Pricing Strategy: Allows businesses to pursue market
share by selling at low prices or giving away products and
services for free.