Chapter 1

The World of E-Business

 Types of e-Commerce
 Business-to-Consumer
– E-commerce between organizations and individual
consumers
 Business-to-business (e-Business)
– E-commerce between businesses
– accounts for a much larger portion of e-commerce
than business-to-consumer
– EDI

 Business-to-administration
 Consumer-to-administration
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Ingredients of an e-Business Solution
Customers
Customers

Finance/
Finance/
CRM Web Accounting/Auditing Stake-
CRM Webselling
selling Accounting/Auditing
Management holders
ManagementControl
Control

Knowledge Ordering
Ordering
Management

Order
Purchasing
Purchasing Production Delivery
Delivery
Fulfillment Production
(ERP)

Distributors
Distributors
Supply
SupplyChain
Chain
E-Markets,
E-Markets, Suppliers
Suppliers
Auctions,
Auctions,
Intermediaries
Intermediaries Partners
Partners
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 Advantages of Electronic Business

 Improved operational efficiency and productivity

 Reduction in operating costs and costs of goods
and services
 Improved competitive position
 Penetration into new markets through new channels
 Improved communications, information and
knowledge sharing
 Harmonisation and standardisation of processes
 Improved
– internal information access
– relationships with suppliers
– customer service

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Inhibitors of Electronic Business
 Management/Strategy Issues
– lack of a clearly defined e-Business strategy
– organisational changes required by e-Business
– management attitudes and organizational inflexibility
 Cost/Financing
– costs of implementation of e-Business
– calculating the Return on Investment (ROI)
 Insufficient security & trust
 Legal issues
 Technology Concerns
– limited interoperability
• most existing applications
– depend on proprietary solutions which do not interoperate

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 Chapter 2
e-Business Strategy
 Program

 What is an e-business strategy?

 Strategic positioning
 Three levels of e-business strategy
 The changing competitive agenda
 The strategic planning process
 Strategic alignment
 Consequences: theoretical foundations
 Implementation

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Three Levels of e-Business
Strategy

1. Supply chain or industry value chain level

2. Line of business/SBU level
3. Corporate or enterprise level for each firm
- encompasses a collection of business units

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IT supporting e-business strategic objectives
(or COMP3760/6760 in a nutshell) …

Enterprise
strategy
Business
functions
Application
Peter architecture
e-Business
infrastructure
Jian Sourcing /
staffing
Financing

COMP3760/6760

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The Consequences of e-Business

 When analyzing the business effects of E-

business consider the next approaches

1. theory of competitive strategy

2. resource based view

3. theory of transaction costs

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 Chapter-12
e-Business Modeling
Business Process Modelling Notation
 BPMN
– http://en.wikipedia.org/wiki/Business_Process_Modeling_Notation
– is an attempt at a standards based business process modelling language
– that can unambiguously define business logic
– and information requirements
– to the extent that the resultant models
• are executable (unlike Visio etc.)
– Other examples
» Sybase PowerDesigner
» Rational Suite etc.
 Business logic and information requirements
– are maintained in a model
– that is consistent with and
• reflects the actual EIS supporting business activities

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http://en.wikipedia.org/wiki/Business_Process_Modeling_Notation
BPM: Discussion cycle

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http://en.wikipedia.org/wiki/Image:BPMN-DiscussionCycle.jpg
 Chapter 3
Business Models
 Program

 Introduction
 Pressures forcing business changes
 Business models-definitions
 Business models-classification

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 Pressures Forcing Business
Changes
 The unprecedented challenges which businesses
are facing nowadays
– makes competition fiercer and more global
– customers become increasingly demanding because of
competing products and service offerings
 The increasing competition leads companies
– to rethink their position in the market place
 To have success in today’s market
– business networking strategies are required to provide high
quality, cost-efficient products reflecting the customers need
• made possible by the development of modern information
technology

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 5 Business Models

1. Internet-enabled
2. Value-web
3. E-business enabled
4. Market participant
5. Cyber-intermediary

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 Chapter 4
E-Business Relationships
 Supply Chain
Demand

Manufacturing
Basic raw Assembly Wholesale Retail Consumer
material

Supply

Four types of info flows:

Many industry examples ..
 Transaction: orders, bills…
Sugar …?  Customer demand
Beef … etc.?  Supplier information
 Knowledge flows
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 IT’s Impact on Business Processes
CAPABILITY ORGANIZATIONAL IMPACT / BENEFIT

TRANSACTIONAL UNSTRUCTURED PROCESS INTO ROUTINIZED TRANSACTIONS

GEOGRAPHICAL ELECTRONIC TRANSFER MAKES PROCESSES INDEPENDENT

OF GEOGRAPHY
AUTOMATIONAL REPLACES/REDUCES HUMAN LABOR

ANALYTICAL USES COMPLEX ANALYTICAL METHODS

INFORMATIONAL BRINGS GREAT AMOUNTS OF DETAILED INFORMATION

INTO PROCESS
SEQUENTIAL ENABLES CHANGES IN SEQUENCE OF TASKS; POSSIBLE
TO RUN SIMULTANEOUSLY
KNOWLEDGE CAN CAPTURE, DISSEMINATE KNOWLEDGE, EXPERTISE
MANAGEMENT TO IMPROVE PROCESS

TRACKING ALLOWS DETAILED TRACKING OF TASK STATUS, INPUTS,

OUTPUTS
DISINTERMEDIATION CAN CONNECT PARTIES DIRECTLY, NO LONGER REQUIRING
INTERMEDIARY
Source: Davenport & Short “The New Industrial Engineering”(1990)

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 Chapter 5
Governance Structures
Coordination of the Flow of Goods and
Services
 Markets:
– supply and demand forces
 Hierarchies:
– in house production and management decisions
 Networks:
– joint (inter-firm) planning and collaboration
• Historical? – e.g. Hansa(Hanseatic) trading cities?
http://www.exploregeorgia.com/en/news/images/lufthansa%5B1%5D.jpg

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http://www.cs.wustl.edu/~ksl2/images/Lubeck.jpg
 Asset Specificity
 Of a transaction
– refers to the degree to which it is supported by assets
– that are specific to this transaction alone and
– which cannot be used otherwise or elsewhere without incurring a
significant reduction of value
 Is a transaction supported by assets that are specific to the
transaction?
– Site specificity
• Coal mines and power stations
– Physical asset specificity
• Asset specific to a particular transaction
– Human capital specificity
• Employees
– Time specificity
• Value within a period of time
– security, terrorism etc.
 If High Asset Specificity then:
 Hierarchical coordination
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 How does IT affect Governance
Structures?

 The ‘Electronic Market Hypothesis’

 The ‘Move to the Middle Hypothesis’

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 Chapter 8
Electronic Markets
 Classification Based on Purchasing
Process and Products
products bought
buying method

operating inputs manufacturing

inputs

MRO = systematic MRO hub catalog hub https://

Maintenance, sourcing www.seomining.com/
Repair, ebusiness-
Operations architecture/module3/
catalog-hubs.php

spot sourcing yield manager exchange

https://en.wikipedia.org
/wiki/Yield_management

Table 1 Four types of electronic market (source [Kaplan 2000]).

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 How do e-Markets Differ from
Traditional Markets?
 Personalization and customization
 Information goods
 Search
 Transaction mechanisms
 Price discovery
 Facilitation
 e-Payment systems

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Source: https://advantagemedia.com.au/wp-content/uploads/2018/12/positioning
-differentiation-value-proposition-in-marketing.jpg
Impact on Market Structure and Efficiency

 Cost reduction
 Network externalities https://en.wikipedia.org/wiki/Network_effect
 Switching costs https://en.wikipedia.org/wiki/Switching_barriers
 Economies of scale and scope
 Technological uncertainty

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Source: https://capital.com/files/imgs/glossary/600xx/Market-impact-definition.jpeg
 Context-related Success Factors
 Stakeholder Motives:
– opposite motives of key stakeholders is serious threat
 Products traded:
– Complexity of product description:
• items - simple product descriptions more suitable for e-markets
– Asset specificity:
• e-markets best for sourcing goods with low asset specificity

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Source: https://slideplayer.com/slide/4712994/
 Process-related Success Factors (1)
 Functionality and support:
– must match requirements of users
 Learning costs:
– high learning costs are barriers to adoption
 Trust:
– critical element for screen-based trading
 Quality of information:
– availability of correct information on
• products
• trading partners
• contracts

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Source: https://time.com/99707/keys-to-success-6-traits-the-most-successful-people-have-in-common/
 Process-related Success Factors (2)
 Information security:
– safeguard of integrity and confidentiality of information
 Geographic location:
– dependent on perceived risks for participants, localized e-
markets will evolve
• consider ebay.com, ebay.com.au etc.
 Partnerships:
– with industry leaders and domain experts can contribute
to perceived trust

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Source: thecourier.com.au
Knowledge Management

32
 Stage 5: Formalised Knowledge (e.g. formulae and models)

The knowledge hierarchy Stage 4: Categorised Knowledge (e.g. classification systems)

Stage 3: Codified Knowledge (both print and electronic format)

Stage 2: articulable Tacit Knowledge (an unknown subset of that below)

… thoughts, ideas, know-how, techniques, sub-conscious

Stage 1: Tacit Knowledge (we don’t know what we know)

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 KM Evolution (Gottschalk and Khandelwal 2003)

 Stage 1
– tools
• standard range of hardware and software platforms, are made available for end users
– knowledge workers
• word-processors, spreadsheets etc..
 Stage 2
– organisation starts to map information about their staff
• ‘who knows what’
• internal directory listing the staff members and their areas of knowledge, either hard or soft.
• knowledge at this stage resides in the individual
• face to face contact takes place, emails are sent
• use of tools is diminished at this stage
• employees make use of tools to find colleagues who help them with queries in the firm
 Stage 3
– storing data
– knowledge is taken from the individual and stored
– data mining techniques may be put to use so that other individuals
• can have access to the expertise that reside within
• Lotus notes
 Stage 4
– information systems processing knowledge for the benefit of workers
• neural networks, expert systems, other AI techniques come into the fore
• examination of the stored data, co-incidences discovered
– Milk and bread

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 Why do KM?
 Globalisation
– Cultural factors
• Eastern/western
– Concepts of knowledge sharing
– Generations
• Boomer (1945-1963)
• X (1964-1976)
• Y (1977-1994/present)
– Gender?
 Organisational learning
– Knowledge accumulation
– Knowledge transfer

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Social Network Analysis

 Sociograms A sociogram without multidimensional scaling

– with/without multidimensional scaling

 Cliques

Cantonese clique

Cantonese
speakers

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A sociogram with multidimensional scaling
 Organisation Z

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 Organisation Z

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 Chapter 6
e-Business Technological
Infrastructure
Two-tier Client/Server Architecture
 Client/server introduces a two-tier client/server architecture
 Tiers in client/server application refer to
– # of elements into which application is partitioned
– not # of platforms where executables are deployed
 Tiers into which application is partitioned is known as logical partitioning of an
application - as opposed to physical partitioning
– # of platforms where application executables are deployed

•Main design goal of •Web & Application

TCP-IP was to build •clients
interconnection of
networks - provided
universal connection
services over
heterogeneous
networks •Internet /
•Private Network
•Most client server have
application interface
and business logic on •Database-server
the client side, rules on
client side etc …
•Client-Tier •Server-Tier
40
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Three-tier architecture http://en.wikipedia.org/wiki/Three_tier

 Three-tier architecture overcomes limitations of two-tier

architecture
– middle tier introduced between:
user system interface client + database management server
 Partitioned into 3 logical tiers:
– presentation tier:
– responsible for the graphical user interface (GUI) layer
» usually in the form of a web-browser
– processing tier (or middle-tier):
– contains the business logic
– responsible for processing associated applications supported
» scheduling, transaction processing monitors (TPS), message servers,
application servers
– data tier:
– holds the permanent data associated with the applications supported e.g.
» modern and legacy application databases
» transaction management applications
– interprets requests from a client and routes them to a suitable data resource
41
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Source: http://upload.wikimedia.org/wikipedia/en/6/66/ 42
Overview_of_a_three-tier_application.png
Web Technologies and Applications
 WWW vs. Internet

– quite separate from internet (Tim Berners-Lee – CERN etc.)

– viewed as vast information system consisting of software
applications or processes that exchange information and
• act on behalf of user or another application

– WWW architecture consists of:

• Identifiers
– single specification to identify objects in the system:
» the Uniform Resource Identifier (URI).
• Formats
– non-exclusive set of data format specifications designed for
interchange between agents in system. e.g. HTML, XML, schemas
(e.g. XML schemas .xsd) etc.
• Protocols
– small and non-exclusive set of protocol specifications for interchanging
information between agents - e.g. HTTP
43
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1. Customer, business partner etc. service provider sends requests from a web browser
2. Request sent to the web server via relevant network (internet, intranet, extranet via
http, soap etc.
3. Web server recognizes the request handles request from static web pages ….,
passes dynamic processing to the application server
4. Application server extracts information from a variety of back end data sources in line
with business rules.
5. Results finally sent back to web server for passing on to client location

•Web & Application

•clients

•DATABASES &
•WEB- •APPLICATION-
APPLICATION-
SERVER SERVER •LEGACY
SYSYEMS

•Internet /
•Private Network

•Client •Presentation •Processing •Data

•-tier •-tier •-tier •-tier

Multi-tiered architecture for developing web-based applications

44
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EDI – The Infrastructure for e-Business
 Electronic Data Interchange (EDI)
– defined as transfer of structured data
• by agreed message standards between computer applications

 Network for transmitting standard transactions

 Paperless trading environment
 Routine documents
– purchase order
– billings
– shipping manifests etc.
 Documents translated into standard business language

 In use since 1970s on private VANs

– http://en.wikipedia.org/wiki/Value-added_network

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 EDI – The Infrastructure for e-Business
Two key elements in basic EDI:
 electronic documents replace paper counterparts
 exchange of documents in standardised format

Supplier
Customer Request for Quote
Quote
Purchase Order Order
OrderManagement
Management
Purchasing
Purchasing PO
Acknowledgement

Manufacturing
Manufacturing

Shipment Notice
Receiving
Receiving Shipping
Shipping
Carrier
Carrier
Shipment Bill of
status lading

Billing
Billing
Accounts Invoice
Accounts
Payable
Payable
Accounts
Accounts
Receivable
Receivable

Remittance Advice Remittance

Transfer of Funds
Payment data Customer
Customer
(EFT) Supplier
Supplier
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Bank Bank 46
Account data Bank Notice of payment
Bank
remittance
Collaborative technologies: workflows

 Workflow system
– automates business process, in whole or in part
• during which documents, information, or tasks
– passed from one participant to another for action
– according to set of rules

 Workflow
– normally comprises number of logical steps (activities)
– can depict various aspects of a business process including
• automated and manual activities
• decision points and business rules
• parallel and sequential work routes
• and how to manage exceptions to the normal business process

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