Download Business(organization) to Customer(individual) (O-2

Business(organization) to Customer(individual) (O-2-I)
Section 3
Disintermediation
Disintermediation
Disintermediation
What is Disintermediation?
it is used to describe the possible threat of the internet
on businesses that used to work as intermediaries
between the producer and the consumer.
Disintermediation Examples
1- Online Banking :
online banking has significantly reduced bank employees.
2- Online PC Sales :
e.g. Dell Computer company which made most of its
selling directly to customers via the Internet. This
process had reduced the need for intermediaries like
computer stores or resellers
Re-intermediation

While the Internet may remove the need for some
intermediaries, it gives rise to new types of
intermediaries, a process known as reintermediation.

This is the introduction of new intermediaries
between the individuals (the customers) and the
product or service.
Re-intermediation Examples
 Some
examples of new intermediaries
are:

Search engines and web directories
These sites act as intermediaries between the
user and the information they are accessing

Reviews and / or links sites
Some sites offer a range of information and
advice on a topic and part of the service will be
a set of links to other sites
Re-intermediation Examples (2)

Portal sites:
they are major sites that are frequently visited. They
act as gateways to the internet like: AOL, MSN, and
Yahoo.

Intelligent Agents: computers that behave in a
relatively intelligent way to perform a certain task
online.
 Some examples of categories where these agents
could help in are: Product Brokering, Merchant
Brokering, Negotiators
Intelligent Agents
Product Brokering:
is like alerting a user to products or information
that, in the light of the person's previous behavior,
might be of interest or relevance to him
 Merchant Brokering:
are agents that roam the Net comparing prices,
reporting back ‘ best buy ' options
 Negotiators:
are intelligent agents that engage in negotiations
(perhaps with other agents) to reach deals on the
user's behalf within a set of parameters

Some e-commerce models
Some of the ways of making money on the web
include :
 Advertising: Many sites offer their information
free, but aim to make themselves the main portal in
a particular area. The advertising space on their site
then becomes valuable
 Affiliation: Affiliation is the linking of different
companies or services. For example a sports review
site which links with online gaming, or the baby
discussion portal which links with child products
Some e-commerce models (2)
Subscription: the website offers some material free,
as a 'taster', but if the user wants more information
and services, then they have to pay a subscription
fee
 Selling information: the most basic form is simply
selling e-mail addresses (or other details) to
marketing companies

a website can record which customers bought which
products, what people are interested in, their web
use, their shopping habits and so forth this
information is valuable for many research companies
Section 4
Organization to Organization
O-2-O
e-business and e-commerce

O-2-O is considered as the most dominant and
profitable area on the internet.

No need for a large number of customers
because normally business customers will buy
in big volumes.
e-business and e-commerce
e-business Vs. e-commerce:

e-commerce: is used to describe online
transaction between an individual and an
organization.

e-business: is used for online transactions
involving two businesses or organizations ( O2-O).
Electronic Data Interchange
EDI (Electronic Data Interchange):
is the process by which companies use computers
over some network to exchange data in a
predetermined format and following some fixed
rules ( or protocols).

EDI is used to increase profits or reduce costs. (
for example, it reduces paper work ).
EDI before The Internet
Advantages:




Speed: same-day exchange of documents.
Accuracy: fewer mistakes due to typing or
transcription errors
Economy: fewer clerks needed in the purchasing
and goods-receiving chain.
Although these were large benefits, in practice
adoption of EDI was much less widespread
than expected! Why??
EDI before The Internet (2)
Disadvantages:
 Cost: In the early days, most computing was done
through Mainframes which was very expensive
compared to the current situation.

Networking Complexity: For two businesses to
communicate, they needed to build their own dedicated
network, which was quite a complex and expensive
operation.

The Emergence of Alternatives: like overnight
shipping and other technologies that could compete
with EDI.
EDI after The Internet

With internet, there is a network connecting almost
everybody.

So, regular companies can use available
computers for EDI simply and cheaply ( i.e. no
need for dedicated machines).

This makes EDI now a very attractive concept for
many companies.
Automotive Network Exchange
(ANX)
ANX:
is a form of an extranet which is similar to the internet
but only authorized users can access it.

An extranet uses Internet techniques (&protocols) but is
limited to authorized users only, inside a particular
company, plus some trusted outsiders - clients,
consultants, customers, suppliers.

ANX was introduced by three American car makers (
Ford, Chrysler, and GM) to exchange information with
each other.
Automotive Network Exchange
(ANX)

ANX could be seen as a controlled and more secure
version of the internet but for limited users only.

Now ANX can be used for EDI type functions like:
placing orders, arranging just-in-time delivery,
billing, payments, etc.

ANX is now being promoted as the 'business-class
Internet', where it will move beyond its application to
just the automotive industry and become a standard
for all industry type.
The impacts of the Net on
Organizations
1. An Informed Customer Base: the easy access of
information through the internet enables customers who want
to buy a certain product to have the ability to search and find
the best deal.
 an informed customer could be a company that knows it
can get the parts - you supply - cheaper elsewhere
2. Increased Competition: The availability of information
and the increase of the reach will increase competition
between organizations
 Besides competing on price, other benefits may also be
offered, such as guaranteed delivery, after sales care or
additional benefits which give them a competitive edge
The impact of the Net on
Organizations
3.Increased Collaboration: through internet, there is a
possibility for businesses to communicate together in an
efficient manner on a certain project.



Joint development and design
Small organizations may group together to create buying
cartels and get bulk prices
Manufacturers of different car components in a particular
area may create a global car components manufacturers
website
The impact of the Net on
Organizations
4.Outsourcing: is the process by which some functions of
an organization are performed by an external company

Ex: In the health industry outsourcing can be anything from
food preparation and cleaning services to expert surgeons

The deconstruction process may well result in an
increase in outsourcing. Why?
if an organization is viewed as a collection of units, each
with their own function, then it may be the case that some of
these functions can be better performed by an external
organization
Extensible Markup Language
( XML):

XML allows users to define their own tags, so businesses
can communicate together using a set of predetermined
tags that could be fixed by both of these businesses. For
example, XML can inform the receiver of a web page
whether the received document is an invoice or something
else.

XML describes the content of a web page in terms of the
kinds of data that it contains, which is what makes it
powerful for electronic document exchange

XML is used for complex transactions that need security
and more standardization between organizations ( which
can’t be supported by HTML).