Electronic Business Electronic Business: Digital Markets and Digital Goods Lecturer: Richard Boateng, PhD. Lecturer in Information Systems, University of Ghana Business School Executive Director, PearlRichards Foundation, Ghana Email: richard@pearlrichards.org 10.1 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Electronic Business: Digital Markets, Digital Goods Lecturer: Richard Boateng, PhD. Lecturer in Information Systems, University of Ghana Business School Executive Director, PearlRichards Foundation, Ghana Email: richard@pearlrichards.org 10.2 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Class Website www.vivaafrica.net 10.3 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
1. Chapters 9 and 2 of Laudon and Laudon (2009) 2. Chapters 10 and 2 of Laudon and Laudon (2010) 3. Selected readings on class website Laudon, K. C. and Laudon, J. P. (2009) Essentials of Management Information Systems. 8th/9th/10th Edition, Pearson Education Inc., Upper Saddle River, NJ 07458. Laudon, K. C. and Laudon, J. P. (2010) Management Information Systems: Managing the Digital Firm. 11th Edition, Pearson Education Inc., Upper Saddle River, NJ 07458. 10.4 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
LEARNING OBJECTIVES This session seeks to introduce the course and also explain the basic concepts of information systems, e-business and e- commerce. Learning objectives include: 1. Identify the unique features of e-commerce, digital markets, and digital goods. 2. Describe how Internet technology has changed business models. 3. Identify the various types of e-commerce and explain how e- commerce has changed consumer retailing and business-tobusiness transactions. 10.5 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Visit Nike ID www.nikeid.com create your own shoe 10.6 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Electronic Visit Nike Business: ID Digital www.nikeid.com Markets and Digital Goods create your own shoe 10.7 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
10.8 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
10.9 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Internet Business Doing Business on the Internet Information Systems E-commerce E-business 10.10 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
What is an information system? 10.11 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
What is Information Systems Information system: Set of interrelated components Collect, process, store, and distribute information Support decision making, coordination, and control Information System IT + People + Processes and Policy 10.12 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Data and Information Information vs. data Data are streams of raw facts Information is data shaped into meaningful form Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information, such as the total unit sales of dish detergent or the total sales revenue from dish detergent for a specific store or sales territory. 10.13 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Types of Information Systems 1. Executive Support System (ESS) 2. Decision Support Systems (DSS) 3. Management Information Systems (MIS) Strategic-Level Management- Level Plan and Project, Forecast - Senior Managers Decision Analysis; Summary Reports - Staff Managers & Middle Managers 4. Knowledge Work Systems (OS) 5. Office Systems (OS) Knowledge- Level Models; Graphics; Documents & Mail -Professionals & Clerical Workers 6. Transaction Process Systems (TPS) Operational-Level Sorting; lists; Detailed Reports; Pay Slips - Operations Personnel; Supervisors 10.14 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Systems that Span the Business SAP ERP: Human Resource Systems - Leave Request Example Executive Support Systems Sales Planning and Forecasting http://www.sap.com/solutions/business-suite/erp/demos/index.epx 10.15 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Types of Business Information Systems Transaction processing systems Perform and record daily routine transactions necessary to conduct business Examples: sales order entry, payroll, shipping Allow managers to monitor status of operations and relations with external environment Serve operational levels Serve predefined, structured goals and decision making 10.16 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Types of Business Information Systems Management information systems Serve middle management Provide reports on firm s current performance, based on data from TPS Provide answers to routine questions with predefined procedure for answering them Typically have little analytic capability 10.17 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Decision support systems Serve middle management Support nonroutine decision making Example: What is impact on production schedule if December sales doubled? Often use external information as well from TPS and MIS Model driven DSS Types of Business Information Systems Voyage-estimating systems 10.18 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Executive support systems Support senior management Address nonroutine decisions requiring judgment, evaluation, and insight Incorporate data about external events (e.g. new tax laws or competitors) as well as summarized information from internal MIS and DSS Example: ESS that provides minute-to-minute view of firm s financial performance as measured by working capital, accounts receivable, accounts payable, cash flow, and inventory 10.19 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Systems from a constituency perspective Transaction processing systems: supporting operational level employees Management information systems and decision-support systems: supporting managers Executive support systems: supporting executives 10.20 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Enterprise applications Span functional areas Execute business processes across firm Include all levels of management Four major applications: a) Enterprise systems Systems That Span the Enterprise b) Supply chain management systems c) Customer relationship management systems d) Knowledge management systems 10.21 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Enterprise Systems Enterprise systems integrate the key business processes of an entire firm into a single software system that enables information to flow seamlessly throughout the organization. These systems focus primarily on internal processes but may include transactions with customers and vendors. Figure 2-8 10.22 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Systems That Span the Enterprise Enterprise systems Collects data from different firm functions and stores data in single central data repository Resolves problem of fragmented, redundant data sets and systems Enable: Coordination of daily activities Efficient response to customer orders (production, inventory) Provide valuable information for improving management decision making 10.23 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Systems That Span the Enterprise Supply chain management systems Manage firm s relationships with suppliers Share information about Orders, production, inventory levels, delivery of products and services Goal: Right amount of products to destination with least amount of time and lowest cost 10.24 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Example of a Supply Chain Management System Customer orders, shipping notifications, optimized shipping plans, and other supply chain information flow among Haworth s Warehouse Management System (WMS), Transportation Management System (TMS), and its back-end corporate systems. Figure 2-9 10.25 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Systems That Span the Enterprise Customer relationship management systems: Provide information to coordinate all of the business processes that deal with customers in sales, marketing, and service to optimize revenue, customer satisfaction, and customer retention Integrate firm s customer-related processes and consolidate customer information from multiple communication channels 10.26 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Internet Business Doing Business on the Internet Information Systems E-commerce E-business 10.27 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Electronic Commerce: Sharing business information, managing business relationships and facilitating transactions with Internet technology. (linking buyers and sellers). Electronic Business: Executing all the firm s business processes with Internet technology. (sales, finance, human resources, manufacturing) Intranet: Business builds private, secure network based on Internet technology Extranet: Extension of intranet to authorized external users 10.28 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Systems That Span the Enterprise Intranets: Internal networks built with same tools and standards as Internet Used for internal distribution of information to employees Typically utilize private portal providing single point of access to several systems May connect to company s transaction systems 10.29 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Extranets: Systems That Span the Enterprise Intranets extended to authorized users outside the company Expedite flow of information between firm and its suppliers and customers Can be used to allow different firms to collaborate on product design, marketing, and production 10.30 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Systems That Span the Enterprise E-business (Electronic business): Use of digital technology and Internet to execute major business processes in the enterprise Includes e-commerce (electronic commerce): Buying and selling of goods over Internet E-government: The application of Internet and networking technologies to digitally enable government and public sector agencies relationships with citizens, businesses, and other arms of government 10.31 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Unique Features of Internet Technology for Business 1. Ubiquity Internet/Web technology available everywhere: work, home, etc., and anytime 2. Global reach The technology reaches across national boundaries, around Earth 3. Richness Supports video, audio, and text messages 4. Universal Standard Internet provides a universal standard for communication 10.32 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Unique Features of Internet Technology for Business Unique features (cont.) 5. Interactivity The technology works through interaction with the user 6. Information density Vast increases in information density the total amount and quality of information available to all market participants 7. Personalization/Customization: Technology permits modification of messages, goods 8. Social technology The technology promotes user content generation and social networking 10.33 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Electronic Commerce and the Internet Key concepts in e-commerce Digital markets reduce Information asymmetry Search costs Transaction costs Digital markets enable Price discrimination Dynamic pricing Disintermediation 10.34 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
The Benefits of Disintermediation to the Consumer The typical distribution channel has several intermediary layers, each of which adds to the final cost of a product, such as a sweater. Removing layers lowers the final cost to the consumer. Figure 10-2 10.35 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Key concepts in Internet Business (cont.) Digital goods Goods that can be delivered over a digital network E.g., Music tracks, video, software, newspapers, books Cost of producing first unit almost entire cost of product: marginal cost of producing 2 nd unit is about zero Costs of delivery over the Internet very low Marketing costs remain the same; pricing highly variable Industries with digital goods are undergoing revolutionary changes (publishers, record labels, etc.) 10.36 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
10.37 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Music Industry and Internet 10.38 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
INTERNET BUSINESS MODELS 10.39 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Internet Business Models 1. Social Network Online meeting place Social shopping sites Can provide ways for corporate clients to target customers through banner ads and pop-up ads 2. Online marketplace: Provides a digital environment where buyers and sellers can meet, search for products, display products, and establish prices for those products 10.40 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
3. Content provider Providing digital content, such as digital news, music, photos, or video, over the Web yahoo, 4. Service provider Provides Web 2.0 applications such as photo sharing and interactive maps, and services such as data storage - google maps, flickr, 5. Portal Supersite that provides comprehensive entry point for huge array of resources and services on the Internet yahoo 6. Blogs Personal web pages that contain series of chronological entries by author and links to related Web pages wordpress.com 10.41 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
10.42 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
7. Virtual storefront: Sells physical products directly to consumers or to individual businesses prada.com, best buy 8. Information broker: Provides product, pricing, and availability information to individuals and businesses kbb.com, pricerunner.co.uk, nexttag.com 9. Transaction broker: Saves users money and time by processing online sales transactions and generating a fee for each transaction expedia.com, etrade.com 10.43 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
10.44 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Types of Internet Business Business-to-consumer (B2C) Business-to-business (B2B) Consumer-to-consumer (C2C) Government-to-citizen (G2C) Government-to-government (G2G) Government-to-business (G2B) Mobile commerce (m-commerce) 10.45 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
Information Technology Capital Investment Considering the context of a developing country like Ghana, is the internet a strategic choice for every firm or otherwise, should every firm do business online? 10.46 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
E-commerce in Ghana Where are we? Go to the Class website: www.vivaafrica.net Under Case studies download the paper on E-commerce in Ghana and Read for discussion and a quiz next week. 10.47 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 10.48 www.vivaafrica.net Dr. Richard Boateng (richard@pearlrichards.org)