Chapter 8
E-Commerce, Web 2.0, and Social Networking
New Terms
ICT = Information Technology + Communication Technology Convergence of computer-based information technology and telecommunication technology Strategic information systems any information system used for strategic purpose(s)
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Study Questions
Q1: What types of inter-organizational systems exist?
Q2: How do companies use e-commerce? Q3: Why is Web 2.0 important to business? Q4: How does social capital benefit you and organizations? Q5: How does social CRM empower customers?
How does the knowledge in this chapter help Fox Lake and you?
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Q1: What Types of Interorganizational Systems Exist?
Pre-Internet Systems
Postal mail, telephone, fax
E-Commerce
Web Storefronts
Web 2.0
Interorganizational Systems
Enterprise 2.0
Social CRM, SOA
Google, eBay, Amazon, CNet
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Web 2.0
Web applications that facilitate participatory information sharing, interoperability, usercentered design, and collaboration on the World Wide Web. Vs. Web applications limiting users (consumers) to the passive viewing of content that was created for them. Examples - Social networking sites, blogs, wikis, video sharing sites, hosted services (ASP and ISP), mashups and folksonomies (collaborative tagging).
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Interorganizational Systems
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Q2: How Do Companies Use E-Commerce?
Merchant companiestake title to goods they sell
Nonmerchant companiesarrange for purchase and sale of goods without owning or taking title to those goods
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Example of Use of B2B, B2G, and B2C
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Nonmerchant E-Commerce Companies
Online auctions
E-commerce application enables auction company to offer goods for sale and to support a competitive-bidding process
Clearinghouses
Provide goods and services at stated price, arrange delivery, but do not take title Amazon.com sells books and other merchandise for other businesses
Match buyers and sellers Priceline.com
Electronic exchanges
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Q2: How Does E-Commerce Improve Market Efficiency?
Disintermediation
Companies learn how customers internalize competitors pricing, advertising, and messaging
Retail Store
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What Economic Factors Disfavor E-Commerce?
Channel conflict Price conflict with traditional Economic Factors channels in Logistics expenses increase Disintermediation for manufacturer Customer-service expenses increase for manufacturer
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Q3: Why is Web 2.0 Important to Business?
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Software as a (Free) Service (SaaS)
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Software as a (Free) Service
SaaSthin-client applications run in Internet cloud
License-free software Does not require an installation on the users computers Web servers download Web 2.0 programs as code within HTML, as Flash (Adobe Flash), or as Silverlight (Microsoft) code. Readily (and frequently) updated. New features added with little notice or fanfare. Google Docs & Spreadsheets Google Groups Google Earth Google Maps
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User-Generated Content
Crowdsourcing examples
Combines social networking, viral marketing, and open-source design, saving considerable cost while cultivating customers. Crowd performs classic in-house market research and development. Sets up customers to buy.
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Organic User Interfaces and Mashups Mashups
Mashup a web application that combines data from other websites Examplemap data from Google Maps to add location information to real-estate data, thus creating a new and distinct web service See www.programmableweb.com/mashups
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How Can Businesses Benefit from Web 2.0?
AdWords Vendors pay for specific words, phrases Placement on search results list depends on how much you pay for search word Vendor pays when someone clicks on their link Amount can vary day to day, hour to hour Ad Sense Google inserts ads that match web page content Google pays web page owner for every click Website owners enroll in this program to enable text, image, and video advertisements on their websites
Advertising
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Web 2.0 Not for All Applications
Dont get carried away
Information systems that deal with assets, whether financial or material, requires control, rather than flexibility and organic growth.
Examples
Credit card transaction processing Accounts payable or general ledger system interface
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Q4: How Does Social Capital Benefit You and Organizations?
Social Capitalinvestment in social relations with expectation of returns in the marketplace
Adds value in four ways:
1. Information about opportunities, alternatives, problems and other factors 2. Influence decision makers in your organization or others 3. Social credentials from linking to network of highly regarded contacts 4. Personal re-enforcement of professional image and position
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How Do Social Networks Add Value to Business?
Progressive organizations maintain a presence on Facebook, LinkedIn, Twitter, and other sites
Sales people, customer support, public relations, and endorsements by high profile people
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Fan Connections and Endorsements
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What Are the Characteristics of Web 2.0: SLATES
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Social CRM is Enterprise 2.0 CRM
Social CRM done in style of Enterprise 2.0.
Relationships between organizations and customers emerge as both parties create and process content. Employees create wikis, blogs, discussion lists, frequentlyasked-questions, sites for user reviews and commentary, and other dynamic content. Customers search content, contribute reviews and commentary, ask more questions, create user groups, etc. Each customer crafts own relationship with company.
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Classical CRM vs. Social CRM
Classical CRM
Centered on customer lifetime value Control what customer reads, sees, hears about company and its products
Social CRM
Effective reviewer, commentator, or blogger can have significant influence
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Guide: Blending the Personal and the Professional
Employees sharing personal information at socially Technology leads to blurring lines between work life and home life Work is portable and always on You need to be more careful about what you say Work networks are not social networks
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Case Study 8: Tourism Holdings Limited
Publicly listed New Zealand corporation that owns multiple brands and businesses in tourism industry.
$5 million (2009) in EBIT on $170 million in revenue Operates in New Zealand, Australia, and Fiji, and has sales offices in Germany and United Kingdom
Current list of businesses, visit www.thlonline.com/THLBusinesses
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Case Study 8: Tourism Holdings Limited (contd)
CEO considers information systems and technology a core component of its business value and invested in a variety of innovative information systems and Web 2.0 technologies
CEO speaks knowledgeably about information technologies, including SharePoint, Microsoft Office SharePoint Services (MOSS), Microsoft Report Server, OLAP, and data mining
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Case Study 8: Tourism Holdings Limited (contd)
Acquisition of multiple brands and companies created a disparate set of information systems using a variety of different technologies Converted customerfacing websites to use Microsoft SharePoint and MOSS to reduce costs and simplify IS management
Result: Excessive software maintenance and costs
Single development platform reduces maintenance expenses and focuses management attention, development, and personnel training on single set of technologies
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Case Study 8: Tourism Holdings Limited (contd)
Sells directly to consumer
Actively uses Google AdWords and Google Analytics to understand how their sites are processed Experimenting with online chat, both voice and video
www.KiwiExperience.com. Click on Plan Your NZ Trip
This case implies frequent acquisition and disposition of tourism brands poses problems for information systems
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