1. Which forces cause the transition to an e-Business/Digital Business/e-Commerce?

Information Intensity of the Business – broadly, the amount of information required to be carried
out while conducting the business.

2. What are the sources of Information Intensity?

 Information Intensity of the Product, say digital Vs. physical product

 Information Intensity of the process, say, order booking Vs. transport of materials

But then ….Why didn’t the Indian banking business take to the e-Commerce mode till the mid-90s, in
spite of very high Information Intensity?

Pressures to Perform! – Sources?

 Competition
 Regulations
 Demands from Customers
 Internal Drive

Any framework that you know of?

Whenever any of the above two forces undergo a change, there is an occasion to move around the
quadrants (of the three frameworks) – generally in the forward direction – towards e-Commerce or
towards enhancing your e-Commerce operations further!
Those who recognize the changes, make their moves at the right time and in the right direction – as
indicated by the two forces!

1. Important Aspects of e-Commerce:

A. Pure Vs. Partial e-Commerce

o Definition given:

Only if all the three activities – ordering & ; payment, order fulfilment and delivery are done in the
digital mode, it is Pure e-Commerce – otherwise it is partial e-Commerce….

For Pure e-Commerce, All interactions with all external entities have to be in the digital mode,
otherwise it should be called Partial e-Commerce or Mixed Commerce mode.

Any framework that you could use to identify whether a business is in the Pure e- Commerce mode
or the Partial mode?

The Value-Chain, Value-System Framework!

Is Porter’s Value-Chain Framework applicable to all businesses equally?

Therefore, a combination of a very good understanding of:

 The appropriate model of the value-chain for your business

 The information intensity of the business vis-à-vis the value-chain and ….
 Your interactions with the external entities – the value linkages (interdependencies) across
your value system….

…. gives you a very good idea of the scope and the applicability of e-Commerce in your business!

…. This also gives us another way of looking at a fully Digital Business – the Entire value-chain along
with the linkages across your value system, should be purely digital!

Another typology for businesses:

 Brick & ; Mortar

 Click & ; Mortar
 Entirely Digital (Pure E-Commerce!)

Many times, it is a mix of Brick & ; Mortar and Click & ; Mortar – often when a legacy Brick & ;
Mortar business is getting into a Click & ; Mortar mode also or is transiting to a click & ; Mortar
mode.

The parallel operating of the brick and click mortar modes often give rise to coordination problems
across the two modes.

Another typology for businesses:

 Brick & Mortar

 Click & Mortar
 Entirely Digital (Pure E-Commerce!)

Many times, it is a mix of Brick & ; Mortar and Click & ; Mortar – often when a legacy Brick & ;
Mortar business is getting into a Click & ; Mortar mode (Barnes & ; Noble) also or is transiting to a
click & ; Mortar mode. The parallel operating of the brick & ; mortar and click & ; mortar modes
often give rise to coordination problems across the two modes (Barnes & ; Noble again!)

Once again, to understand the scope of transition to e-Commerce is determines by the Information
Intensity of your value chain and also the value linkages across your value system!

C. Electronic Marketplaces:

The Electronic Marketplace is a website where one connects with multiple vendors, shops or persons
on the same platform. It can be for selling & ; purchasing (or exchanging?) goods, services or
information. Electronic markets can also match individuals to others or to jobs.

Important Components of an e-Commerce Environment

1. Typical E-Commerce/M-Commerce Applications

 Direct Marketing
 Network Marketing
 Online Banking
 e-Purchase
 Online Payments
 e-learning
 e-Complaint Registration – Amazon, Jhansi District Administration….
 e-tendering

2. Types of Roles

 Buyers
 Sellers
 Vendors (long term relations)
 Intermediaries
 IT Professionals
 End users
 Managers

3. Technologies

 Networks
o WANs
o LANs
o VPNs
o Intranets
o Extranets
o The Internet
 Multimedia and Network Publishing Tools
 Messaging/Data Communications Hardware & ; Software
 Infrastructure for Business Transactions
o Smart Cards
o Catalogues/Directories
o Security/Privacy Protocols
4. Government & ; Regulatory Environment (Public Policies)

 Security & ; Privacy related issues & ; corresponding regulations

 Technology standards
 Tax Policies & ; Structure
 Monitoring of compliance

5. Mechanisms for Marketing & ; Advertising

 Market research – consumer behaviour and other research

 Marketing strategies – Positioning, Promotion strategies, Media planning
 Determining web content, website design
 Managing ranking on Google and other sites

6. Business Partnerships

 Managing complementary products

 Joint Ventures
 Strategic partnerships with vendors
 Business Consortia

7. Data Management

 Internal databases
 Data flowing in from websites – data acquisition
 Data analytics
 Access controls

Types of e-Commerce environments – a further refinement?

 B2B
 B2C
 G2C
 G2B
 G2G
 G2E
 C2B
 Intra-business e-Commerce: B2E, B2D
 C2C – any different from B2C & ; C2B?
 Collaborative Commerce – A form of B2B, where all organizational participants work in a
peer-to-peer relationship – say for Joint. Product Development (could be termed ‘small
business consortia for specific purpose?)

Social Commerce:

Social Commerce is the use of social networks, social media in conducting the e- Commerce
operations.

Social media may be useful for firms in securing advice from consumers as far as B2C operations are
concerned. It can also be useful for customers for getting opinions from co-shoppers in the C2C
interactions within B2C e-Commerce.
A. The Concept of Value-Chain:

 The Value-Chain as a framework to understand organizational activities.

 The total number of activity types that the value-chain framework represents.
 The significance of primary & ; support activities as far as the direct & indirect value addition
to the final value is concerned.

B. The Concept of Linkages within a Value-Chain

 Linkages denote the interdependencies among value activities.

 Thus, an enhancing investment in one activity often strengthens other linked activities.

C. Another useful concept to understand the value additions through linkages:

 A Typology for Firms:

o Up-stream firms
o Mid-stream firms
o Down-stream firms

D. The Concept of a Value-System

The entire series of value-chains from the suppliers of the very basic inputs to the final consumer of
the concerned product/service.

 The Supply-side value-chains

 The value chain of the firm
 The demand-side value-chain

E. Linkages across a Value-System and their importance for understanding possibilities and
opportunities for e-Commerce

F. The ‘Saturn’ ex le for illustrating the concept of a Value-System and Value Linkages.
What is Management Education About?

Professional Management Education:

 Enables one to identify whether there is anything wrong/ineffective about the way the
organization is being managed.
 Enables one to identify what is possibly wrong.
 Enables one to diagnose the possible reasons behind the problems.
 Enables one to develop possible alternative solutions to remedy the situation.
 Enables one to also compare and develop possible alternative ways to implement the
solutions

What should be the next step?

Actual Implementation of a Solution!! ....

Professional Management Education cannot give this ability ……..

Henry Mintzberg on the Practice of Management and Management Education

Three Critical Aspects of Effective Practice of Management:

 Art – Judgement, Intuition, Creativity

 Craft - Experience
 Science - What You are Expected to learn at Management Schools

High Quality Management Education refers to the ‘Science’ of Effective Practice of Management

Often great managers perform very well Using mainly their Art and Craft….

Then, Why it is Important to appreciate ‘Science’?

 Art and Craft differ across managers facing the same situation
 Art and Craft differ across situations for the same manager
 Often, decisions - particularly at higher levels, are group decisions – leading to possible
inconsistencies of quality of Art & ; Craft across members
 Thus, Science increases the chances of consistency of performance across situations and
managers
 Disdain towards Science often results in missing out on opportunities
 Science helps to prevent disillusionment about MBA education at later stages of career….

At the same time, it is also important to appreciate the Limitations of ‘science’ in Management

The Second Pillar: M.I.S. – The Discipline

The Why and What of the Discipline of M.I.S. – A Personal View

The Three Fundamental Assumptions behind M.I.S.:

1. The importance of information and hence the importance of information Processing is

increasing exponentially…. Therefore, the importance of information technology is also
increasing accordingly….
2. Information technology has a tremendous potential to benefit organizations; this potential is
increasing exponentially due to the extremely rapid developments in Information
Technology.
 3. Organizations have failed rather miserably to exploit this potential of IT – the gap between
the potential and the actual benefits accrued is also increasing exponentially!

Objective behind the Discipline of M.I.S.

 To find out the reasons behind this failure of organizations and....

 To try to develop management approaches to remedy the situation!

This is very important as:

 Organizations play an extremely important role in our lives.

 IT has (potentially) a very critical role to play in the effectiveness of organizations!

Reasons behind Organizational Failure to Exploit the Potential of Information Technology

 Ineffective planning/envisioning of IT Applications / Information Systems/ Information

Technologies – Organizational IS/IT Environments
 Ineffective Management of Organizational IS/IT Environments

What is an Organizational IS/IT Environment?

Organizational IS/IT Environment

In today’s developed & developing world, it is an extremely important aspect of the overall
organizational environment, shaped by the infusion of certain Information Technologies and their
application to organizational activities.

What does it look like? - It can be understood in terms of the following components.

 Technology
 IT Applications
 Data
 IT Professionals
 End Users
 Management Mechanisms for IS/IT Environment

E-Commerce

 An opportunity presented by recent technology trends

 Computer Networks - The Internet, Intranets, VPNs and the Web
 Data Management – Data Analytics
 Cellular and Mobile Networks - Mobile Apps
 Cloud Computing
 Data Security Technologies
 IoT

The above, when deployed by an organization, create a specific IS/IT environment within the
organization (and even across organizations), which has to be managed for effectiveness.

What is e-Commerce?

Commerce & ; e-Commerce:

Commerce:

The Buying and Selling of Goods and Services (Oxford)

e-Commerce:

The buying & ; selling of goods & ; services deploying IT and especially the Internet (directly derived
from the above).

A Wider Definition:

Deploying the Internet, Intranets, Extranets, VPNs, etc. to purchase, sell, transport or trade
goods/services/data. (also barter system?)

e-Business – a related Concept:

 Conducting all types of business online using the Internet

 Conducting all internal activities online using the Internet
 Conducting all organizational activities – both external and internal - using information
technology.
o e-Business

Strategic Quadrant Business (Strategic Grid – Mcfarlan et al)

Delivery Sector Business (Industry Sector Framework – Earl)

Digital Masters (Andrew McAfee et al)

Delivery Sector: The output is delivered on the network.

Digital Masters:

Industries – Banking, High-Tech Industries, Retail ….

Characteristics:

 Strong overarching digital vision

 Excellence governance across silos
 Many digital initiatives generating business value in measurable ways
 Strong digital culture

The Strategic Grid M C Kenny

E-Commerce and the Organization

An organization typically interacts with:

1. Suppliers/Vendors

2. Customers

a. Individual customers

b. other organizations

3. Government Organizations/Regulatory Bodies

4. Competitors

E-Commerce Environments: A Classification Scheme

1. Business to Customer
2. Business to Business
3. Government to Citizen
4. Government to Business
5. Government to Government

Why is this typology important?

1. Management of e-Commerce environments is essentially Management of the Organizational IS/IT

Environments involved

and ….

2. There are significant differences among the IS/IT environments entailed in each of the above e-
Commerce initiatives

The Strategic Grid:

An e-Commerce initiative almost always pushes a business into the Strategic quadrant of the Grid,
through the turnaround quadrant.

Turnaround Strategies to enter and manage the Strategic Quadrant successfully involve major
organizational initiatives regarding –

 New roles for Strategic Management of IS/IT – IT Director & ; the CIO
 Education of the senior management and the IT professionals about strategic importance
and management of IT
 IT Scan, IT Fit and IT Forecast exercises
 Resources for the IS/IT function
 Power and authority with the IS/IT function

A major aspect of managing e-commerce involves management of IS/IT environment of the

concerned organization.

- The concept of ‘organizational IS/IT environment’, especially in the context of e-Commerce.

The Sector Framework (Michael Earl):

Four sectors depending on their orientation towards IT Deployment:

- Delivery
- Dependent
- Drive
- Delayed

A. The Delivery Sector:

 the offering is delivered on the network / using a network extensively – it is the means of
delivering the offering to customers.
 Typical industry sectors – Banking, other Financial Services, Travel Agencies, Insurance,
Retail etc.
 Critical resource/asset – Technology Infrastructure
 Critical management aspect: Simultaneous control-oriented and innovation-oriented
management of the technology infrastructure.
 Tight Central Control & ; Coordination

B. The Dependent Sector:

 Successful implementation of business strategies is increasingly dependent on IT.

 IS/IT strategies derived from business strategies.
 Considerably freedom to business managers in respect of IS/IT strategy & ; management

C. The Drive Sector:

 No clear direction or IS/IT strategy

 Considerable amount of experimentation/innovation with new ideas
 Ideas from other businesses

D. The Delayed Sector:

 Ad-hoc IS/IT planning, no specific focus

Sectors Relevant for e-Commerce: Drive and Delivery Often, for e-Commerce: Delayed to Drive to
Delivery. More infrequently, it is – Dependent to Delivery

Levels of Digital Mastery:

A. Digital Masters

Industries – Banking, High-Tech Industries, Retail, Insurance, logistics operators ….

Characteristics:

 Strong overarching digital vision

 Excellence in governance across silos
 Many digital initiatives generating business value in measurable ways
 Strong digital culture
B. Conservatives

Industries - Large Manufacturing Organizations

Characteristics

 Overarching digital vision, but still developing

 Mature digital infrastructure, with a few select, focused advanced digital features
 Slow transition towards a strong digital culture

C. Fashionistas

Industries – Across all sizes and industries, except those in the Digital

Mastery & ; Conservative segments

Characteristics:

- Many advanced digital features, in silos and with no clear focus

- No planned coordination
- No overarching visions

D. Beginners