The World of Electronic Commerce

Transcription

1 E-Commerce The delivery of information, products and services, or payments via telephone lines, computer networks or any other means [Kim & Moon, 1998] All electrically mediated information exchanges between an organization and its external stakeholders [Chaffey, 2006] 1

2 E-Business Involves E-buying, E-selling. It also refers to servicing customers and collaborating with business partners. (Chesher et al. 2003) E-Marketing- Wider in scope than Internet marketing as it refers to both digital media and web, , wireless media, Intranet, Extranets and mobile systems 2

3 The World of Electronic Commerce EC EC JIT EI Tech Data Barcoding EBB EDI VMI InterNet CE FAX 3

4 MODULE 1 OBJECTIVES At the completion of this module, you will be able to: Define EDI Explain EDI Terminology Describe the background of EDI Explain some benefits of EDI 4

5 ELECTRONIC DATA INTERCHANGE Definitions Background Benefits Module 1 5

6 ELECTRONIC DATA INTERCHANGE TRANSACTION DATA COMPANY A COMPANY B EDI is the computer-to-computer exchange of routine business documents (data) in a standard format between companies. 6

7 VALUE ADDED NETWORK (VAN) Buyer Post Office Seller 7

8 TRADING PARTNER EDI Trading partners are companies that do business via EDI. 8

9 TRANSACTION SET PO EDI Purchase Order (PO) Purchaser A transaction set refers to a type of electronic document. 9

10 PAPER DOCUMENT INTERCHANGE PO Data Entry Computer Computer Post Office Purchaser Invoice 10

11 ELECTRONIC DATA INTERCHANGE PO Data Entry Computer Computer VAN Purchaser Invoice 11

12 Implementation EC is Cross Functional Accounting Account Executives Shipping EDI has an impact on all departments Order Processing Infomation Systems 12

13 Implementation Considerations for System Design Determine Requirements Determine Readiness Select Participants EDI System 13

14 Implementation Support areas Accounting Order Processing Transportation Liaison Areas Marketing Sales Technical Areas Electronic Commerce Information Systems 14

15 ????????????? Questions 15

16 ELECTRONIC DATA INTERCHANGE Components Module 2 16

17 MODULE 2 OBJECTIVES At the completion of this module, you will be able to: List the four major components of an EDI system Recall the terms VAN, ANSI X- 12,and their meaning Recall reasons why companies are doing EDI 17

18 EDI Components Standards Hardware EDI Software Communications 18

19 Transaction Set PO EDI PO Purchaser Transaction set refers to a type of electronic document 19

20 WITH STANDARDIZATION Type a who'll bunch of things in her gain. Make it look like there are words written on this page. I am very warm. This presentation is very long. Make it look like there are words written on this page. I am very warm. This presentation is very long. Type a who'll bunch of things in her gain. Make it look like there are words written on this page. I am very warm. This presentation is very long. Make it look like there are words written on this page. I am very warm. This presentation is very long. Type a who'll bunch of things in her gain. Make it look like there are words written on this page. I am very warm. This presentation is very long. Make it look like there are words written on this page. I am very warm. This presentation is very long. Type a who'll bunch of things in her gain. Make it look like there are words written on this page. I am very warm. This presentation is very long. Make it look like there are words written on this page. I am very warm. This presentation is very long. Type a who will bunch of things in her again. Make it look like there are words written on this page. I am very warm. This presentation is very long. Make it look like there are words written on this page. I am very warm. This presentation is very long. Type a who'll bunch of things in her gain. Make it look like there are words written on this page. I am very warm. This presentation is very long. Make it look like there are words written on this page. I am very warm. This presentation is very long. 20

21 Components ELECTRONIC DATA INTERCHANGE STANDARDS ANSI X12 UN/EDIFACT 21

22 Other Standards Transportation Data Coordinating Committee (TDCC) Uniform Communications Standard (UCS) Warehouse Information Network (WINS) Voluntary Inter-Industry Communication Standard (VICS) EDI for Administration, Commerce, and Trade (EDIFACT) 22

23 TYPES OF BUSINESS TRANSACTIONS VIA EDI Other 15% Shipping Note 14% Credit/Debit 3% Invoices 24% Purchase Orders 44% 23

24 A Standard Language Type a who'll bunch of things in her gain. Make it look like there are words written on this page. I am very warm. This presentation is very long. Make it look like there are words written on this page. I am very warm. This presentation is very long. Type a who'll bunch of things in her gain. Make it look like there are words written on this page. I am very warm. This presentation is very long. Make it look like there are words written on this page. I am very warm. This presentation is very long. Type a who'll bunch of things in her gain. Make it look like there are words written on this page. I am very warm. This presentation is very long. Make it look like there are words written on this page. I am very warm. This presentation is very long. Type a who'll bunch of things in her gain. Make it look like there are words written on this page. I am very warm. This presentation is very long. Make it look like there are words written on this page. I am very warm. This presentation is very long. Type a who will bunch of things in her again. Make it look like there are words written on this page. I am very warm. This presentation is very long. Make it look like there are words written on this page. I am very warm. This presentation is very long. Type a who'll bunch of things in her gain. Make it look like there are words written on this page. I am very warm. This presentation is very long. Make it look like there are words written on this page. I am very warm. This presentation is very long. 24

25 How EDI Works! The APL Group 664 quote danbury Ct Wilson, ct RFQ # /07/95 1 WIDGET # dz gizmos ST* NTE**Ship Complete N1 *SE* The Apl Grp Inc... N3 *664 DANBURY Converts Internal Data Format to ANSI X12 (outbound) Converts ANSI X12 Standard format to Internal Format (inbound) 25

26 EDI Components Standards Hardware EDI Software Communications 26

27 EDI Software 1. Document Support 4. Translation Communications Database 2. Mapping X12 3. Standards Support 27

28 EDI Components Standards Hardware EDI Software Communications 28

29 Hardware 29

30 EDI Components Standards Hardware EDI Software Communications 30

31 Value Added Network (VAN) U.S. Post Office Buyer Seller 31

32 Point-to-Point: EDI Without a VAN Buyer Supplier 1 A 2 B 3 C 4 D 32

33 Value Added Network (VAN): Buyer Supplier 1 A 2 B 3 C 4 D 33

34 Interconnect Strategy GE VAN AT&T VAN 34

35 ---EDI Process Integrated Systems--- Business Management System Business Management System Accounting Receiving Manufacturing Purchasing Purchase Order EDI Purchase Order Acknowledgment Order Processing Shipping Accounting Sales/Order Processing 35

36 Data integration Issues Database New Data Part List Partner s Part List Cross-referencing Database Integrated Applications EDI Software Bridge Between Applications Networking Users 36

37 EC GROWTH 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 Number of Registered EDI Users. Average Annual Growth ~ 45%. 0 *Source: EDI Forum

38 Why do Companies use EDI? 60% Percent 50% 40% 30% 20% 10% 0% Customer/supplier requirement Quick access to data Cost savings Data accuracy/error reduction In 1996, EDI grew substantially due to customer / major supplier requirements or requests. EDI is an element used to streamline business processes. 38

39 Government Health care Retail Grocery Transportation Policy Advertising EDI USERS Insuranc e Construction Manufacturing Banks Chemical Electronics Petroleum Automotive 39

40 ????????????? Questions 40

41 Manufacturing Focus EFT BPR Internet (IT) JIT EDI VMI ERS Bar-Code Maximum benefits are obtained when EDI is coupled with BUSINESS PROCESS CHANGE 41

42 EDI BENEFITS Increased Business Opportunities Reduced Inventory More Accurate Records and Decision-making Information Lower Data Entry Costs 42

43 EDI BENEFITS Decreased Mailing Costs Greater Customer Satisfaction Reduction In Order Time Better Cash Management 43

44 Bar-Code 44

45 EDI and Business Processes EFT BPR Internet (IT) JIT EDI VMI ERS Bar-Code Maximum benefits are obtained when EDI is coupled with BUSINESS PROCESS CHANGE 45

46 ????????????? Questions 46

47 ELECTRONIC DATA INTERCHANGE EDI Translation Module 3 47

48 Module 3 Objectives At the completion of this module, you will be able to: Relate the paper document components to EDI transaction set Recall the sections of an EDI transaction set 48

49 ANSI ASC X12 Standard Purchase Order Purchase Order Facilitates electronic interchange of business documents 49

50 Transaction Set Composition File = Transaction Set Record = Data Segment Field = Data Elements 50

51 Paper Vs. EDI Document Date: 12/31/92 Purchase Order # Vendor: ABC Supplies P.O. Box 180 Baltimore, MD PURCHASE ORDER Ship To: 4001 Paper Document = EDI Transaction Set Cleveland ECRC 2415 Woodland Avenue Cleveland, OH Quantity Description Price Amount 2 Legal Pads LP8X11 $8.00/DZ $16.00 ST*850*0001^ BEG*00*NE*4001**921231^ N1*VN*ABC Supplies^ N3*P.O.Box 180^ N4*Baltimore*MD*21239^ N1*ST*Cleveland ECRC^ N3*2415 Woodland Avenue^ N4*Cleveland, OH 44115^ PO1*1*2*DZ*8.00**VP*LP8X11^ CTT*1^ SE*11*

52 Envelopes Address Information Information Receipt Information Routing Date and Time Stamp Audit and Version Control 52

53 Envelope Elements Identification Information Batch Control Information Addressing Information 53

54 Trading Partner Enveloping Issues Envelope Identiffers Addressing codes Types of control numbers Control number sequence Version of standards 54

55 Envelope Structure ISA Interchange IEA 55

56 Paper Vs. EDI Document Envelope = Interchange Cleveland ECRC [electronic address] ABC Company [electronic address] ISA*05* *01*PASSWORD01*01* SENDERID ENTIFIC*01*ReceiveidentifI*950919*1503* U*00304* *1*T* ^ GS... ST..... SE... GE... IEA*1* ^ 56

57 Paper Vs. EDI Document Folder = Functional Group GS*PO*CECRC01*DISC* *1426* 0001*X*003050^ ST*850* SE*17*1001 GE*1*

58 Envelope Structure ISA ISA*05* *01*PASSWORD01*01 *SENDERID ENTIFIC*01*ReceiveidentifI*950919*1503* U*00304* *1*T* ^ GS... ST..... SE... GE... IEA*1* ^ GS GE IEA 58

59 Transaction Set ISA GS ST ST*850*0001^ Transaction Set BEG*00*NE*4001**921231^ N1*VN*ABC Supplies^ N3*P.O.Box 180^ N4*Baltimore*MD*21239^ N1*ST*Cleveland ECRC^ N3*2415 Woodland Avenue^ N4*Cleveland *OH* 44115^ PO1*1*2*DZ*8.00**VP*LP8X11^ CTT*1^ SE*11*0001 SE GE IEA 59

60 Paper Vs. EDI Document Document = Transaction Set Date: 12/31/92 Purchase Order # PURCHASE ORDER Vendor: ABC Supplies Ship To: P.O. Box 180 Baltimore, MD Quantity Description Price Amount Legal 2 Pads LP8X Cleveland ECRC 2415 Woodland Avenue Cleveland, OH $8.00/DZ $16.00 ST*850*0001^ BEG*00*NE*4001**921231^ N1*VN*ABC Supplies^ N3*P.O.Box 180^ N4*Baltimore*MD*21239^ N1*ST*Cleveland ECRC^ N3*2415 Woodland Avenue^ N4*Cleveland, OH 44115^ PO1*1*2*DZ*8.00**VP*LP8X11^ CTT*1^ SE*11*0001 Document Transaction Set

61 Data Segment Date: Purchase Order # PURCHASE ORDER Vendor: Ship To: Line Item = Data Segment Quantity Description Price Amount 2 Legal Pads LP8X11 $8.00/DZ $16.00 PO1*1*2*DZ*8.00**VP*LP8X11^ 61

62 Paper Vs. EDI Document 4001 Date: 12/31/92 Purchase Order # Vendor: ABC Supplies P.O. Box 180 Baltimore, MD PURCHASE ORDER Ship To: 4001 Cleveland ECRC 2415 Woodland Avenue Cleveland, OH Data Elements N1*VN*ABC Supplies^ 62

63 Paper Vs. EDI Document Code = Qualifier Data Segment Delimiter N1*VN*ABC Supplies^ Separator = Element Delimiter 63

64 Summary Communications Protocol ISA ISA*05* *01*PASSWORD01*01* SENDERID ENTIFIC*01*ReceiveidentifI*950919*1503*U* 00304* *1*T* ^ GS... ST..... SE... GE... IEA*1* ^ GS ST SE GE IEA 64

65 Module 3 Summary The paper business document and its components can be compared with the EDI transaction set. EDI enveloping can be compared functionally to postal envelopes. EDI Software translates business documents into a standard format for transmission 65

66 ????????????? Questions 66

67 Organizational Issues in EC/EDI Implementation Paper Intensive Non - Integrated Mind Sets Cultural Change Conveying Key Messages Building a Case for Action Bottom Up Support Selecting EC Technologies Move From Automated Integrated 67 Linking EC Technologies to Business Results

68 Organizational Issues in EC/EDI Implementation Two Key Messages: Here is where we are and why we can t stay here. This is the company we must become. Supplier/Customer Mandate Increased Competition Globlization of the Marketplace Reduce Costs eople must buy-in! 68

69 Organizational Issues in EC/EDI Implementation Elements of an effective case for action: Business context Problem Marketplace demands Diagnosis Cost of no action 69

70 Organizational Issues in EC/EDI Implementation Increased competition and a rapidly changing business environment have forced the implementation of technology in businesses of every size. Implementing Electronic Commerce can position your company to compete with a wide range of competitors. A small business has the advantage of skipping layers of management when implementing electronic commerce. Execution can happen quickly, risk free, and at a low cost. 70

71 Organizational Issues in EC/EDI Implementation How to bring people into the change process. Start with reality. Get all the facts out. Give people the rationale for change, laying it out in the clearest, most dramatic terms. When everybody gets the same facts, they ll generally come to the same conclusions. J. Welch, CEO of General Electric To inaugurate large-scale change, you may have to create the burning platform. You have to give people a reason to do something differently. Scaring people isn t the answer. You have to appeal to them. The more they understand why you want to change, the easier it is to commit to it. L. Bossidy, CEO of Allied-Signal Fortune Magazine, Dec 13,

72 Organizational Issues in EC/EDI Implementation The cost of integration in the absence of a cultural change actually are higher. This is true because a new technical system has been introduced within the old culture. The organization retains redundant processes. Non concurrent processes slow the cycle. Hand-offs further slow the process. Creates an environment for error. Rework is a characteristic. These findings are especially pertinent today because of the need to lower costs, the requirements to be flexible and the ability to take advantage of the opportunities. 72

73 Electronic Communication(EC) Vision for the Future Virtual Enterprise 3,000 Pound Gorilla Prime Contractor Prime Contractor Vendor Vendor 1st tier Vendor 1st tier 73 1st tier 2nd tier

74 ????????????? Questions 74