Presentation on Operations Aspect of E and M commerce

Before the mass acceptance of the Net, electronic commerce between businesses and consumers was constrained to processes within an existing relationship, such as ATM facilitation provided by a bank. Similarly, although commerce between businesses has been conducted electronically since the advent of EDI (electronic data interchange) in the 1970's, such processes were based primarily on pre-existing relationships between large companies.

The misconception of the Net as the sole facilitator of e commerce appears to have evolved with the growth of B2C trade on the World Wide Web. Although the Net, and more specifically the web, is not the only facilitators of e commerce, they have proven to be the predominant generators of new e commerce relationships.

E commerce is merely a part of a new method of communication of communication that has been opened up by the development of the Net.

So lets address a few questions about E commerce.

What makes E-commerce Possible?

* A diffuse, digital networking infrastructure.

* A means for delivering and rendering acceptable cyber media content (the web does this nicely)

* A mechanism for handling transactions in a secure environment (for instance, secure HTTP)

* A financial infrastructure to handle the accounting and involving for transactions in increments from fractions of a cent to millions of dollars (e-cash)

And finally and most importantly

* A viable business plan.

The first four of these points were in place by the mid 1990's; the last remains elusive to the present day.

In a very real sense, e commerce has its origins in the bulletin boards of the 1970's. In those years which we could call the Jurassic period of computing, the dinosaurs i.e. the mainframe computers were facing extinction, and the earliest of mammals i.e. minicomputers and birds i.e.PC were evolving rapidly, each spawning a new form of communication. What made bulletin boards effective was the ability to broadcast information. Early bulletin boards provided us with the first digital billboards. In the 1970's, no microcomputer user could live without them E commerce was born of the mindset using digital networks to connect consumers and suppliers electronically.

The role of IT

One of the major problems with IT industry, since the first computer was produced, has been the inability to forecast with any degree of accuracy both the size of market an how the technology will be used. The mid and late 1980's saw further changes in the use of IT in business. The role of IT became strategic. For example, American Airlines (AA) spent a lot of money developing a large computer reservations system and achieved a competitive advantage with it. It placed its terminals in travels agents' shops, giving immediate information on availability and pricing. This was a better way of doing business as far as both travel agents and consumers were concerned. AA's market share increased and it was able to charge other airlines for using its system. At this point IS, information systems became strategic in the sense of being an important factor in the competitive environment. This contrasted with its previous role in automating isolated functions such as payrolls to achieve efficiency benefits.

Obstacles to the growth of e commerce

* E business requires business re-design, of both structure and processes. Business may not be able or prepared to face this task, which may be more difficult than implementing the technology.

* Customer confidence is lacking: Internet fraud grows and privacy problems occur.

* Venture capital: The US is better than Europe at this. Money is provided earlier and more easily. US venture capitalists do not require long trading records and take more risks. The tax treatment of share options is more favorable.

* Failure stories discourage new business ventures.

* Reliability has recently been an issue with problems such as denial of service attacks, viruses and hackers.

* Security of Private data and of credit card numbers is of paramount concern to B2C consumers.

So as we are aware the Internet and technology and in turn E commerce are still growing rapidly but what of the future.

The predicted growth of worldwide e-commerce revenues made by different research groups can be seen this graph here. (eMarket , 2000)

The predictions of most of the research groups have shown a similar pattern of rapid growth. Surveys have also shown that B2B e- commerce will continue to outpace B2C e commerce in all countries and emerging technologies such as wireless devices are changing Internet markets.

Effective operations management, which gives a company the potential to improve revenues and service, would apply all the previous operations aspects to the management of their e commerce section. So that ultimately only a very high standard of service is provided leading the company to have a competitive advantage.

E commerce is definitely one if the most important aspects for businesses looking into the future. We believe that the best approach is to use e commerce as a channel of doing business. Certain businesses will survive and flourish but the majority are likely to fall by the wayside. The need to be responsive to the changing environment is yet another characteristic which e commerce demands. Businesses should not have an over-reliance on technology to overcome the weakness of a bad business model, but use it as a support to carry their initial ideas and business model.

Thanks for listening and I will now hand you over to Colin who is going to talk about M commerce.