Comp1503

E-Business/E-Commerce
History and Trends
Daniel L. Silver, Ph.D.

Theme
To thrive in the e-commerce world,
companies need to structurally transform
their internal foundations to be effective.
They need to integrate their creaky
applications into a potent e-business
infrastructure.
from the E-Business: Roadmap for Success by
Dr. Ravi Kalakota
2001

Daniel L. Silver

History of E-Commerce

ARPAnet created in 1969 (evolved to TCP/IP)

Personal computers exploded in 1981
Processing power increases, cost decreases

LANs and WANs became requirements in 1980s

The Internet was of significant size by mid 1980s
WWW started in 1990 with HTTP and HTML
General browser technology created in 1993 (used
HTTP, ftp, gopher, and .gif and .jpg images)
Search engines soon followed (AltaVista, Lycos)

2001

Daniel L. Silver

Business Evolution on Web

Processes

Functionality

Transactions

Web-enabled
applicatons

Interactivity
Dynamic web pages

Publishing
Static web pages
Time or Maturity

2001

Daniel L. Silver

Effects of E-Commerce
Spam
Bandwidth load shift
Work load time shift
Work place shift
Play time shift
Growth of on-line virtual communities
Privacy challenges / new privacy products

2001

Daniel L. Silver

Effects of E-Commerce

Liberalization of pornography
Promises of wealth creation beyond your wildest
dreams seemed unbelievable well it was!!
Reducing TV consumption?
Dynamic and free content
Uncharted legal issues
Reinforcing media / converging media
Access to commodities such as prescription drugs
without normal levels of control

2001

Daniel L. Silver

Effects of E-commerce

Credit card fraud

Tax avoidance
Many new copyright issues
Free access to information
How to save a life (CPR, FirstAid, choking)
How to build a bomb, or counterfeiting instructions

Accuracy of information sources in question

Hacking and computer viruses
Shifting barriers of competition
Disintermediation and reintermediation

2001

Daniel L. Silver

Where has E-Commerce Had the

Greatest Impacts?
Postal service
Real estate
Communications
Radio / TV
Finance (banks)
Entertainment
Travel agents
Stock brokers

2001

Daniel L. Silver

What do all these

Businesses have
in common?
Information = $
Time = $
Client self-service
is acceptable
8

Pre- dot.com Crash

8 Rules of E-Business
1.
2.
3.
4.

2001

Technology is the cause and driver, it is no

longer an after thought
Information collection, integration and
timely dissemination is the business
Outdated business processes must go or
your business will die
Create flexible outsourcing that excites
customers
Daniel L. Silver

Pre- dot.com Crash

8 Rules of E-Business
5.
6.
7.
8.

2001

E-Commerce means: the cheapest, the

most familiar or the best
Enhance the entire experience around the
product (selection, order, receipt, service)
Promote reconfigurable business models
to meet customer needs
The tough task: Align business strategies
and processes fast, right, and all at once
Daniel L. Silver

10

Before the dot.com Crash

1995-2000 $125B in financial capital sunk into the

new dot.com companies from venture capitalists
and later mutual fund holders
The vision was an easily accessible world-wide
market that was self-regulated
The extraordinary profits would go to first movers
the new intermediaries
The first E-Commerce period was driven by goldrush fever
Few real objectives, few business plans, few
winners

2001

Daniel L. Silver

11

Reasons for the dot.com Crash

Corporate America was rebuilding their
internal business systems in 1999-2000,
when this completed Crash!
Huge competition in the telecomm. Industry
caused revenue to Crash!
Xmas 1999 showed that E-Comm shopping
was not really that popular Crash!
Re-valuations of IT companies (dot.coms)
Crash!

2001

Daniel L. Silver

12

Lesson from the dot.com Crash

From technology perspective E- !

Ramp-up from 1000s to 1000000s of users
A solid technological base (DC,DP,DB)

From business perspective -Commerce?

Only ~ 10% of dot.coms survived
Remember eToys.com, Furniture.com

Yet B2C sales growing at ~50% per year

Users have learned to use the web for
information about products andservices
2001

Daniel L. Silver

13

Trends effecting
E-Commerce/E-Business

Consumer Trends
Speed of Service, Self-Service (empowerment)
Integrated solutions, not piecemeal products

Service/Process Trends

2001

Convergence of sales and service

Long-term Customer Relationship Management
Flexible fulfillment and service delivery

Daniel L. Silver

14

Trends effecting
E-Commerce/E-Business

Organizational Trends

Brand not capital: contract JIT manufacturing

Retain the core, outsource the rest
Increase process visibility (to customers, suppliers)
Employee retention, cont. learning/innovation

Technology Use Trends

Enterprise wide applications, use middleware for
integration
Integrate voice, data, video comm. channels
Handheld and wireless an explosion !

2001

Daniel L. Silver

15

Five Major Predictions for the

E-Commerce Future
1.
2.
3.
4.

5.

2001

E-Commerce technology take-up will continue to

grow by ~50% until about ~2006
E-Commerce prices will rise to cover real costs
of doing business on the web
E-Commerce profits will rise to meet levels of
bricks and mortar stores
Major players will become the experienced
Fortune 500 companies who have been watching
(eg. WalMart, Sears, JC Penny, the Gap)
The number of successful dot.coms will further
reduce and adopt clicks and bricks strategies
Daniel L. Silver

16

Constructing the E-Business

Architecture

The New Era of Cross-Functional

Integrated Applications

Middleware
Procurement
Management

Supply
Chain
Management

Enterprise
Resource Knowledge
Planning Management
Selling
Customer
Chain
Relationship
Management
Management
2001

Daniel L. Silver

17

Constructing the E-Business

Architecture

The New Era of Cross-Functional Integrated

Applications

CRM = Customer Relationship Management

ERP = Enterprise Resource Planning
SupCM = Supply Chain Management
SellCM = Selling Chain Management
PM = Procurement (Operational Resource)
Management
Middleware = Integration Applications
KM = Knowledge Management (DW/Analytics)
2001

Daniel L. Silver

18

Constructing the E-Business

Architecture

CRM = Customer Relationship

Management
Marketing, Sales, Service

ERP = Enterprise Resource Planning

2001

Forecasting and Planning

Purchasing and Material Management
Inventory Management
Finished Porduct distribution
Accounting and Finance
Daniel L. Silver

19

Constructing the E-Business

Architecture

SupCM = Supply Chain Management

Market demand
Resource and capacity constraints
Real-time scheduling

SellCM = Selling Chain Management

2001

Product Customization
Pricing, Contract and Commission Management
Quote and Proposal Generation
Promotions Management
Daniel L. Silver

20

Constructing the E-Business

Architecture

PM = Procurement Management
Office Supplies, Business Travel, Entertainment,
Service contracting, IT h/w, s/w and networking

KM = Knowledge Management (DW/Analytics)

Data Warehousing
Business Analytics (data mining)
Executive Info Systems, Decision Support Systems

Middleware = Integration Applications

e.g. SAP (ERP) to SAS (KM)

2001

Daniel L. Silver

21

The E-Business Architecture

Partners, Suppliers
PM

SupCM

Employees

KM

ERP

Stakeholders

Middleware
SellCM

CRM

Customers, Distributors
2001

Daniel L. Silver

22

Question

In Groups of 2 or 3 answer the following:

What do you predict to be the most significant

new trend (paradigm) in E-Business /
E-Commerce?
Who will be affected the most by this trend?

2001

Daniel L. Silver

23

THE END
danny.silver@acadiau.ca