Week 2

Question 1

What is electronic-commerce?

Answer 1

Electronic-Commerce:
The buying and selling of information,
products and services via the Internet and the World Wide Web.

Question 2

Explain electronic-business

Answer 2

Electronic-Business:

The conduct of transactions by means of electronic communications networks (e.g., via the Internet and/or possibly private networks) end-to-end.

e-Business processes are integrated end-to-end across the company, with key partners, suppliers and customers & can respond with flexibility and speed to customer demands and market opportunities.

companies link their internal and external processes more efficiently & flexibly, work more closely with suppliers to satisfy the needs & expectations of their customers.

Question 3

What’s the difference between e-commerce and e-business

Answer 3

uCompared with e-Commerce, e-Business is a more generic term, it refers not only to information exchanges related to buying and selling but also to servicing customers & collaborating with business partners, distributors & suppliers.

Question 4

e-business requirements

Answer 4

• Identify/measure quantifiable business objectives
• Ensure organizational/operational flexibility
• Re-think entire company supply chains
• Transform the company to a process-centric one
  
  • Define business processes
• Understand security requirements
• Align business organizations with a flexible IT architecture
• Establish ubiquity within standards
  
  • Efficient process management
  • Efficient enterprise integration technology

Question 5

What are the advantages of electronic business?

Answer 5

• Improved operational efficiency and productivity.
• Reduction in operating costs and costs of goods and services.
• Improved competitive position.
• Penetration into new markets through new channels.
• Harmonisation and standardisation of processes.
• Improved relationships with suppliers and improved customer service.

Question 6

What are inhibitors of electronic business?

Answer 6

• Management/Strategy Issues
  
  • lack of a clearly defined e-Business strategy
  • Organizational changes required by e-Business
  • Management attitudes and organizational inflexibility
• Cost/Financing
  
  • Costs of implementation of e-Business
  • Calculating the Return on Investment (ROI)
• Insufficient security & trust
• Legal issues
• Technology Concerns
  
  • Limited interoperability as most existing applications depend on proprietary solutions which do not interoperate.

Question 7

What are the characteristics of e-Business?

Answer 7

• Collaborative product development.
• Collaborative planning, forecasting and replenishment.
• Procurement and order management.
• Operations and logistics.

Question 8

Explain customer relationship management (CRM) systems:

Answer 8

Customer Relationship Management (CRM) systems: “front-office” systems that help the enterprise deal directly with their customers. CRM integrates & automates customer-serving processes within a company (personal information gathering & processing, and self-service throughout the supplying company in order to create value for the customer).

Question 9

Explain ERP systems

Answer 9

1. Enterprise Resource Planning systems (ERP): management information systems that integrate & automate many of the business practices associated with the operations or production aspects of a company. An ERP system includes:
   
   1. Production: manufacturing resource planning and execution process
   2. Buying a product: procurement process
   3. Sales of products and services: customer order management process.
   4. Costing, paying bills and collecting financial/management accounting and reporting process.

Question 10

Explain supply chain management

Answer 10

Supply Chain Management (SCM): A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials; transformation of these material into intermediate and finished products & distribution of these finished products to customers. A supply chain essentially has three main parts, the supply, manufacturing and distribution.

Question 11

Explain E-Market

Answer 11

1. e-Market: an electronic gathering place that brings multiple buyers & sellers together, provides to its participants a unified view of sets of goods & services & enables them to transact via automated means.

Question 12

Explain knowledge management

Answer 12

Knowledge management: knowledge regarding markets, products, processes, technologies, & organizations that a business owns that enable its business processes to generate profits. Also includes the subsequent planning and control of actions.

Question 13

What are the 2 main sides of e-Business applications?

Answer 13

• Buy side: organizations that use e-Business facilities for their buying needs, e.g., spot purchasing and/or enterprise-wide procurement.
• Sell side: businesses that sell their products via the transaction mechanisms offered in e-Business applications.
  
  • Manage multiple selling channels.
  • Ability to take multiple types of orders from customers.
  • Ability to differentiate and customise products and services from other suppliers.
  • ability to adapt and grow the e-Business without dramatic technology changes, organizational restructurings, business processes or radical new investments.
  • Empower suppliers and buyers & enable suppliers of all sizes!

Question 14

Explain Value Chain

Answer 14

Value chain: ‘every firm is a collection of activities that are performed to design, produce, market, deliver, and support its products or services.

The value chain is a model that describes a series of value-adding activities connecting a company’s supply side (raw materials, inbound logistics and production processes) with its demand side (outbound logistics, marketing and sales).

The value chain model provides managers with a tool to analyze and, if necessary, redesign their internal and external processes to improve efficiency and effectiveness.

Question 15

2 types of activities Value chain

Answer 15

• A value chain usually describes a major line of business and encompasses two types of activities, primary activities and support activities.
• The primary activities are those that have a direct relationship, potential or actual, with the organisation’s customers. They contribute directly to getting goods and services to the customer, e.g., inbound logistics, including procurement, manufacturing, marketing and deliver to buyers.
• Support activities provide the inputs and infrastructure that allows the primary activities to be performed.

Question 16

Name & explain the value chain 5 primary activities

Answer 16

• Inbound Logistics: receiving, storing & disseminating inputs to the production process of the product or service.
• Operations: all processes associated with transforming the inputs into outputs.
• Outbound Logistics: all activities concerned with distributing the products or services to customers.
• Marketing & Sales: provides opportunities for the potential customer to buy products or services. Includes such processes as advertising, pricing, tendering, sales force management, selection of distribution channels, etc.
• Service: processes concerned with the provision of service as part of the deal struck with customers. Includes repairs, maintenance, spare parts supply, product upgrades, follow-up services, training and installation, and so on.

Question 17

Name & explain the value chain 4 secondary activities

Answer 17

• Firm Infrastructure: encompasses administration & (general) management for overall planning and control.
• Human Resource Management: refers to all those activities associated with the recruiting, training, developing, appraising, promoting and rewarding of personnel.
• Product / Technology Development: this function includes all activities that relate to product and process development.
• Procurement: this function is responsible for purchasing goods, services and materials required as inputs for the production process.

Question 18

Explain business process

Answer 18

• A business process consists of one or more related activities that together respond to a business requirement for action. It:
  
  • defines the results to be achieved, the context of the activities, the relationships between the activities, and the interactions with other processes and resources.
  • may receive events that alter the state of the process and the sequence of activities.
  • may produce events for input to other systems or processes.
  • may also invoke applications to perform computational functions, and it may post assignments to human work lists to request actions by human actors.
• A process is an ordering of activities with a beginning and an end; it has inputs (in terms of resources, materials & info.) & a specified output.
• We define a process as any sequence of steps that is initiated by an event, transforms information, materials, or business commitments, & produces an output.

Question 19

Explain workflow & process-oriented workflow

Answer 19

• A workflow as the sequence of processing steps during which information and physical objects are passed from one processing step to the other. It links together technologies and tools able to automatically route events and tasks with programs or users.
• Process-oriented workflows are used to automate processes whose structure is well defined and stable over time, which often coordinate activities executed by different machines and which only require minor user involvement (often only in specific cases).

Question 20

What are the characteristics of Business Processes?

Answer 20

• Processes exist within an environment, which is both the internal business environment in which the process operates and the external organizational environment that can trigger the process.
• Every process has a customer & is initiated by a customer order.
• Every business process implies processing: a series of activities (processing steps) leading to some form of transformation of data or products for which the process exists. Transformations encompass multiple activities.
• Communication is an important part of any business process. Communication will take place both within the process and with the environment.
• Workflows/processes have inventories or queues; these are locations where steps in the workflow are waiting for being processed.
• Processes & workflows have decision points. Decisions have to be made with regard to routing and allocation of processing capacity.
• Every process delivers a product, like a mortgage or an authorized invoice.

Question 21

Explain operational, tactical and strategic level relationships

Answer 21

• operational level relationships: companies decide internally what they need & next look outside to see who can deliver. There is no sharing of information between the buyers & sellers. The only information exchanged concerns the orders placed. Problems here are:
  
  • Independence, uncertainty & absence of opportunities to plan ahead.
• Tactical inter-firm relationships: agreements for a period about amount and type of products to buy (or sell), manufacturing series and reservation of production capacity, moments of delivery, inventories to be kept.
  
  • As a result both organizations benefit from a more stable supplier/buyer relation, reduced uncertainty and so reduced inventory levels (e.g. safety stocks) and improved delivery times.
• Strategic level relationships: companies act collaboratively in a specific market where they produce specific product. The supplier develops, designs & produces specific components for the buying organization. These types of inter-firm collaborative relationships are called Value Added Partnerships.