eBusiness: Strategies, Frameworks, Business Models, Networking, Security, 
ePayment, eProcurement, SCM, ERP, CRM, Case Study: Channel Conflicts

IKS - Skript 

4. Semester 2000 

by

Thomas Kramer

 

 

Theme 1: Strategy and Applications

There are 2 approaches to apply e-business:

• Portfolio oriented methods:
  IT follows strategy (reactive)
  Directed towards aligning the IS function with the company′s strategy
  IS function as a business expense
  Top-Down Approach
  
• Impact oriented methods:
  IT (partly) determines strategy (interdependent)
  IT integral part of the strategy formulation process (dynamic alignment)
  IS function as a business investment
  Bottom-Up Approach

 

EDI (Electronic Data Interchange):
The electronic communication of business transactions, such as orders, confirmations and invoices, between organizations.
Third parties provide EDI services that enable organizations with different equipment to connect.
Although interactive access may be a part of it, EDI implies direct computer-tocomputer transactions into vendors′ databases and ordering systems.

What will the future of competitive companies in terms of EDI systems be like:
Everyone tries to overtake its competitors by using ICT / EDI to add more value than others

The use of frameworks:
IT should lead to a competitive advantage by contributing to corporate strategy They recognized that where one corporation achieved a significant competitive advantage, it quickly became incumbent on its competitors to neutralize that advantage, and hence to avoid competitive disadvantages

The 5 frameworks:

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Competitive strategy is an enterprise′s plan for achieving sustainable competitive advantage over, or reducing the edge of, its adversaries. In Porter′s view, the performance of individual corporations is determined by the extent to which they cope with, and manipulate, the five key ′forces′ which make up the
industry structure:

• the bargaining power of suppliers;
• the bargaining power of buyer;
• the threat of new entrants;
• the threat of substitute products; and
• rivalry among existing firms.

Enterprises, through their strategies, can influence the five forces and the industry structure, at least to some extent.
Under Porter′s framework, enterprises have four generic strategies available to them whereby they can attain above-average performance. They are:

• cost leadership;
• differentiation;
• cost focus; and
• focused differentiation

By performing these activities, enterprises create value for their customers. The ultimate value an enterprise creates is measured by the amount customers are willing to pay for its product or services. A firm is profitable if this value exceeds the collective cost of performing all of the required activities. To gain competitive advantage over its rivals, a firm must either provide comparable value to the customer, but perform activities more efficiently than its competitors (lower cost), or perform activities in a unique way that creates greater buyer value and commands a premium price (differentiation).

Of especial importance is ′product differentiation′:

• This is the degree to which buyers perceive products from alternative suppliers to be different, or as it is expressed by economic theory,
• the degree to which buyers perceive imperfections in product substitutability. The buyers of differentiated products may have to pay a price when satisfying their preference for something special, in return for greater added-value.

Value Chain Analysis (Example: Cisco Systems)

By co-ordinating linked activities, an enterprise should be able to reduce transaction costs, gather better information for control purposes, and substitute less costly operations in one activity for more costly ones elsewhere. Co-ordinating linked activities is also an important way to reduce the combined time required to perform them. Hence co-ordination is increasingly important to competitive advantage.

Porter′s enterprise′s value chain can be used as a framework for identifying opportunities for competitive advantage.
Competitive advantage in either cost or differentiation is a function of this chain. IT is spreading through the value chain, transforming the way value activities are performed and the nature of the linkages among them. It enables an enterprise to better coordinate its activities and thus gives it
greater flexibility in deciding its breadth of activities.

Where and how can IS contribute?

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Customer Life Cycle (Example: MSN Home Advisor)

1. Requirements

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2. Acquisition

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3. Ownership

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4. Retirement

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5. CRM

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Generic Strategies
In a nutshell: Overall Cost Leadership

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Product Differentiation

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Market Niche

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In detail:

(1) Differentiation

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(2) Cost

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(3) Innovation

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(4) Growth

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(5) Alliance

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6. The IT advantage?

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7. Critics on the frameworks

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Theme 2: Business Models

8. Examples for e-commerce relationships:

9. Type of business models:

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Theme 3: ICT Architecture

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10. Signaling and Transmission modes:

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11. Components & Networks:

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12. Components & Networks: Why networks ?

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LAN: Local Area Network

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WAN: Wide Area Network

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Main Network Topologies:

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Bus topology:

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Star topology:

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Ring topology:

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Major LAN Protocols:
Ethernet

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Token-Ring

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Protocols - Seven layer OSI model
OSI (= Open systems interconnection)

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The layers within the OSI model

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Theme 4: Security and Authentication

Security Requirements

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Encryption & Authentication

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Symetric vs. Asymetric Cryptography
Symmetric

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Asymmetric

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Hybrid Cryptosystems

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Integrity

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Digital signature

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Digital certificate

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Theme 5: Internet Payment Systems

Electronic Payment Systems (EC)

Time of Payment

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Customer Segment

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Amount

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Media

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Intermediaries (Zwischenhändler)

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Anonymity

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Electronic Cash

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Cash Card

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Internet Payment Methods
Credit Card-based Methods

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Digital Cash

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Customer Accounts

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Smartcard-based Systems

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Elektronic Cheques

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SET-Standard

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CyberCash (EDD)

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ECash

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Theme 6: E-Procurement

Erfolgspotentiale von Electronic Procurement.

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Das Potential von E-Procurement:

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E-Procurement - Process Improvement:

1. First steps to success:

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2. Pick a target:

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3. Dissect & Redesign process:

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4. Design IT or design IT-Solutions:

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Process Improvement Benefits:

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E-Procurement Summary:

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Theme 7: Supply Chain Management

What is supply chain management?

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Business Challenges:

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Technology Challenges:

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The benefits of SCM: The aims of SCM & the levers to achieve them:

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The processes of SCM:

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The role of IT in SCM:

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ERP (Enterprise Ressource Planning) & SCM - systems:

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SCM - Impact on Technical Architecture

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SCM - Summary

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Theme 8: Customer Relationship Management

The customer has to be pulled to the company
ERP = PUSH the customer
CRM = PULL the customer

Definition:

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Benefits:

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CRM Process:
Where CRM approaches:
Customer Life Cycle

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Capturing data (Retirement)

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The CRM software-components:

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Major Sectors in CRM: Marketing Automation

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Sales Automation

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Customer Service and Support

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Theme 9: CASE: E-Business in the Automotive Industry

The "AutoByTel.com" System:

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The "AutoByTel.com" Business Model:

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The Dealer′s Perspective: The traditional Business Model

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Dealer Relation

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The competitors:

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A direct model ?

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Options to grow: New Products and Services

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