What’s e-commerce

What’s e-commerce?

E-commerce is using Internet to do business. As per whatis.com definition e-commerce is the buying and selling of goods on the Internet. Now-a-days e-commerce is not limited to buying and selling of goods on the Internet, it is about servicing customers and collaborating with business partners. Sometimes more generic words like e-Business, e-Management etc. are used to describe e-commerce.

E-commerce can be classified into B2C, B2B, C2C and C2B.

In B2C (Business to Consumer) model companies use the Internet to sell goods and services to customers. It is also called as e tailing. Online bookseller Amazon.com is a prime example of this model.

In B2B (Business to Business) model companies use Internet to collaborate between their suppliers and customers. Almost all companies are trying to use Internet to gain competitive advantage. HomeDepot, Walmart, Dell Computers, Boeing are to name a few who are using Internet to buy goods from their suppliers and collaborate with their customers.

In C2C (Consumer to Consumer) model Internet is taking away the middlemen and letting the consumer buy and sell goods in online auction sites. EBay is prime example of this model.

In C2B (Consumer to Business) model consumers offer their price to businesses. Priceline.com is a prime example of this model.

There are many companies that provide different types of e-business solutions to integrate the whole Value Chain, from SCM to CRM. The following is just a list of some of those companies (the choice of the better solution will depend on the type of business, budget and results expected):

Ariba, CommerceOne , Microsoft, iPlanet, Peoplesoft, SAP, Oracle, IBM, Seibel, Sybase, Baan, Cisco, E.piphany Software, Lucent Technologies, Nortel Networks, Onyx Software, Pivotal, Remedy, SAS, Trilogy, Web Trends, I2

We can say that today, e-commerce is another way of doing business. It goes from buying cheap airline tickets from Expedia.com, a new computer at www.dell.com. Businesses are also implementing e-marketplaces among themselves to decrease procurement costs. In summary, e-commerce provides broad alternatives and a new window to the way of doing business.

In summary, as Siebel defines it, eBusiness enables customers to conduct business anytime, anyplace, in any language or currency, through any distribution channel

Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management involves coordinating and integrating these flows both within and among companies. The ultimate goal of any effective supply chain management system is to reduce inventory (with the assumption that products are available when needed).

The product flow includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs. The information flow involves transmitting orders and updating the status of delivery. The financial flow consists of credit terms, payment schedules, and consignment and title ownership arrangements.

There are two main types of SCM software: planning applications and execution applications.

Planning applications use advanced algorithms to determine the best way to fill an order. Execution applications track the physical status of goods, the management of materials, and financial information involving all parties.

Some SCM applications are based on open data models that support the sharing of data both inside and outside the enterprise (this is called the extended enterprise, and includes key suppliers, manufacturers, and end customers of a specific company). This shared data may reside in diverse database systems, or data warehouse, at several different sites and companies.

By sharing this data "upstream" (with a company's suppliers) and "downstream" (with a company's clients), SCM applications have the potential to improve the time-to-market of products, reduce costs, and allow all parties in the supply chain to better manage current resources and plan for future needs.

There are many suppliers of SCM software or integrators that offer different approaches to Supply Chain Management. You can check I2,Oracle, with its Oracle Supply Chain Exchange or SAP

Enterprise Resource Planning (ERP)

Enterprise Resource Planning is an enterprise-wide integrated application system that helps enterprise to do their business effectively. Typically an ERP application would have modules ranging from Accounting, Finance, Human resources, to manufacturing all sharing data from a Relational Database system. However ERP has not been a great success as companies had difficulties changing their business process to fit into ERP business model. Oracle, Peoplesoft, Baan, JD Edwards, SAP are some of the leading ERP solution providers. Today most of this vendor’s have transformed ERP to suit e-business models including eCRM, eSCM and some of the vendors like Oracle are using XML to integrate between systems.

Customer Relationship Management (CRM), as defined by www.whatis.com is an information industry term for methodologies, software, and usually Internet capabilities that help a database manage customer relationships in an organized way. For example, an enterprise might build a about its customers that described relationships in sufficient detail so that management, salespeople, people providing service, and perhaps the customer directly could access information, match customer needs with product plans and offerings, remind customers of service requirements, know what other products a customer had purchased, and so forth.

According to one industry view, CRM consists of:

Helping an enterprise to enable its marketing departments to identify and target their best customers, manage marketing campaigns with clear goals and objectives, and generate quality leads for the sales team.
Assisting the organization to improve tele-sales, account, and sales management by optimizing information shared by multiple employees, and streamlining existing processes (for example, taking orders using mobile devices)
Allowing the formation of individualized relationships with customers, with the aim of improving customer satisfaction and maximizing profits; identifying the most profitable customers and providing them the highest level of service.
Providing employees with the information and processes necessary to know their customers, understand their needs, and effectively build relationships between the company, its customer base, and distribution partners.

Common suppliers of CRM solutions are Siebel, Kana Communications,Boadbase, I2 Technologies, Oracle and Peoplesoft. Check this article Rules of ROI in CRM from InfoWorld.

Business Intelligence

According to IBM Business Intelligence refers to the ability to make better business decisions through intelligent use of your data assets. It's about giving access to the right data, analyzing the data for insights, and using the insights to make better decisions.

Businesses collect large quantities of data in day-to-day operations such as data about orders, accounts payable, point-of-sale transactions, inventory customers, etc. In addition, businesses often acquire data, such as demographics and mailing lists, from outside sources.

Being able to consolidate and analyze this data for better business decisions can often lead to competitive advantage. For example, a nationwide retail clothing chain can tailor store inventories to suit local tastes, an auto insurance company can market to drivers that meet a certain profile, a pharmaceutical company can look for patterns in patient responses to drugs, a bank can determine what services are needed to retain existing customers, and a sales manager can look for trouble spots in geographic territories. For detailed customer examples, go to http://www.ibm.com/software/data/solutions

IBM supplied ten steps for business intelligent empowering decision making.

American Airlines used IBM’s Business Intelligence to do Online Budget Analysis and could make forecast adjustments. See AA use of IBM BI.

Aetna Life Insurance company, Taiwan used IBM’s MQ Series in their Data warehouse project enabling the end user the power to help customers better. To see the case study Aetna Life

Oracle also provides business intelligent software. Needing a more detailed view of store information to increase the accuracy of their planning, House of Fraser UK built a business intelligence solution using Oracle Sales Analyzer. The result is one centralized source of data, providing decision-makers with quicker and easier access to information.

Read more about House of Fraser:
Customer Snapshot
House of Fraser destinationCRM.com article

What’s Data Mining?

SAS defines Data Mining as the process of selecting, exploring and modeling large amounts of data to uncover previously unknown patterns for business advantage. It produces new knowledge to better inform decision-makers before they act. It provides the tools for building a model of the real world based on data collected from a variety of sources, including corporate transactions, customer histories and demographics, even external sources such as credit bureaus. Then, the model could be used to produce patterns in the information that can support decision making and predict new business opportunities.

The way IBM defines Data Mining is: Data mining applies advanced algorithms to uncover trends and patterns in data that remain hidden to traditional data analysis. (Translation: you discover new facts about your customers and products that will profoundly affect the way you market your business.). IBM offers DB2 Intelligent Miner for Data as a Data Mining solution.

These are some of the companies that implemented IBM Data Mining solutions (Check this link to see how they did it and what results they got)

Arcadia Group

Florida Hospital

Bell Canada

Citicorp Credit Services

Microsoft provides a data mining solution that allows customers to simplify and reduce the cost of building, managing and using today's business intelligence applications. The main framework that Microsoft offers is as follows: