The Five Phases of E-Business (So Far)

Lic. Jorge Guerra Guerra UIGV

Quest for Competitive Advantage Has Driven Evolution of E-Business

Most Peak of Laggards Companies Business Rush to Invest Interest Have Adopted to Catch Up Technology and Technology and With Leaders New Processes New Process Initial Is Business Successes As Usual Get Publicized

Business Interest

Initial Experiments

Time
2004 Sistemas de Informacion UIGV

Equity Market Investment Leads Business Interest, Which Leads Investment

Equity Market Valuation of Leaders Total Business Investment in Relevant Applications

Business Interest

1994 1995

1996 1997

1998 1999 2000

2001 2002

2003 2004

Time
3

2004 Sistemas de Informacion UIGV

Quest for Competitive Advantage Has Driven Evolution of E-Business

Peak Competitive Advantage

E-Collaboration E-CRM E-Reengineering E-Commerce E-Marketing

Business Interest

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

2004 Sistemas de Informacion UIGV

Evolution of E-Business: E-Business Phases and Business Processes

2. E-Commerce Catalog and auction sales Order taking MRO purchasing Direct materials purchasing 3. E-Reengineering Order fulfillment Production Company planning/ forecasting Finance Administration HR 1. E-Marketing Product marketing Company marketing Online advertising 4. E-CRM Personalized marketing Loyalty management Customer service Customer analytics 5. E-Collaboration Industry planning/ forecasting Product development Sales/marketing Campaign devlpmt. Logistics mgmt. Risk mgmt.

2004 Sistemas de Informacion UIGV

Evolution of E-Business: E-Marketing and E-Commerce

q

E-business has gone through two phases already

First phase E-marketing: information on the Internet
q

Marketing to customers at all levels of the value chain

Second phase E-commerce: sales and customer service on the Internet

q q q

A channel for direct sales to end customers A channel for taking orders from business customers A channel for sending orders to business suppliers

Internet
Seller
2004 Sistemas de Informacion UIGV

Buyer
6

Evolution of E-Business: Lessons From B2C/B2B E-Commerce

q

B2B and B2C e-commerce sales are less important than other sources of economic value
10x profit on Internet cost initiatives:
Reduced production costs Improved operating efficiency

B2C

B2B

More effective marketing Lower cost, value-added customer service

Profit on Internet revenues

2004 Sistemas de Informacion UIGV

Evolution of E-Business: Third Phase E-Reengineering

q

Third phase E-Reengineering: Start with business and use the Internet and Internet technologies to improve all business processes
HR Risk Global 2000 Company Finance Mgmt. Customer Payment Procurement Loyalty Mgmt. Direct Product Customer Input Development Service Purchasing Marketing Production Orders Delivery Sales

2004 Sistemas de Informacion UIGV

Evolution of E-Business: Fourth Phase E-CRM

q

End-customer CRM
Manufacturer

Channel partner CRM

Manufacturer

Retailer

Distributor

Retailer

2004 Sistemas de Informacion UIGV

Evolution of E-Business: Fifth Phase E-Collaboration

q

Fifth Phase E-Collaboration: new intercompany value chains

Suppliers, Customers, Partners

Partners

Supply Chain
Suppliers

Development Chain Demand Chain Service Chain

Customers

Global 2000 Company

Partners

2004 Sistemas de Informacion UIGV

10

Evolution of E-Business: Proliferation of Applications

Phase 1 E-Marketing
Applications
Web servers Content management Ad networks Simple E-mail marketing

Phase 2 E-Commerce
Applications
Commerce servers E-procurement Personalization tools Auctions/ reverse auctions

Phase 3 E-Reengineering
Applications
Web-extended ERP production Web-enabled ERP HR, admin. and finance systems Web HR and finance apps. Internal supply chain management

Phase 4 E-CRM
Applications
Multichannel customer contact management Permission marketing Customer analytics and data mining Channel partner CRM Sales-force automation E-customer service

Phase 5 E-Collaboration
Applications
Multicompany supply chain management Collaborative product development Collaborative (B2B2C) selling Collaborative customer service Collaborative vendor managed inventory Collaborative logistics management

2004 Sistemas de Informacion UIGV

11

The Future of E-Business: How Applications Evolve

Phase 0 Phase 1 Phase 2 Phase 3 Phase 4

Unique

Internal Only One-toOne

SemiCustom

One-toMany Some-toMany Many-toOneto-Many

Standard

Many-toMany

2004 Sistemas de Informacion UIGV

12

The Future of E-Business: Integration Drives Standardization

q

The tendency of companies to create unique business processes will diminish as B2B integration (with standard applications and outsourcing) drives standardization.
Standard Applications Outsourcing Network Integration Standardization

Unique Intercompany Business Processes

d en Tr

n hi t ow r

i un

e ss ce ro ep qu

Projected growth in unique processes

Time
2004 Sistemas de Informacion UIGV

13

The Future of E-Business: Evolution of E-Business Will Continue

E-Knowledge Management E-Collaboration E-CRM E-Reengineering E-Commerce E-Marketing
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Business Interest

Peak Competitive Advantage

2004 Sistemas de Informacion UIGV

14