E Business Technology Developments

Chapter 8Harrison & Samson (2002)

Electronic Business Definition The use of the Internet and other

forms of information technology to facilitate communication and transactions between buyers and sellers involving the transfer of goods, services, or information, normally conducted over open or dedicated networks.

Evolution of E-Business Electronic Data Interchange SABRE System The Internet

EDI Enabled the automation of several

complex and time consuming functions that were previously done manually

Benefits of EDI Reduced inventory requirements Shorten cycle time Increased productivity & customer satisfaction Enabling or empowering the workforce Reduced errors and waste

SABRE System Allowed for centralized data

aggregation among all airlines in order to provide information regarding ticket pricing and seat availability

Disadvantages of EDI and SABRE Proprietary Costly and time consuming to implement Costly to set up dedicated network (i.e.,

Value added networks – VAN)Therefore, only large organizations (with a

large volume of transactions) were more likely to enjoy economy of scales from these systems than small organizations.

The Internet Unlike EDI, the Internet provides

benefits of aggregated information, speedy installation, and low-cost access

Business uses the Internet in 3 distinctive phases

Use of the Internet or E-Business (3 phases) 1. Providing information 2. Business to consumer 3. Business to business

The Internet Economy By year 2003, B2B will constitute

approximately 10% of total trade in products in the US.

Auctions and Exchange – are intermediaries and market-makers where buyers and sellers converge to conduct real-time business transactions

Benefits of E-Business Increased penetration by reaching

out to more customers Improved customer service Reduced costs Reduced cycle time Reduced information-based

disadvantages