Introduction to e-business - HEC Montréalneumann.hec.ca/sites/cours/30-775-01/IBM-lecon1.pdf · Introduction to Friendly Foods Case Study. What is e-business? An e-business is an

Unit 1

Introduction to e-business

Topics

What is e-business?The e-business CycleIBM Application Framework for e-businessIntroduction to Friendly Foods Case Study

What is e-business?

An e-business is an organization that connects critical business systems directly to its customers, employees, partners, and suppliers via intranets and extranets and over the Web.

The Value of e-business

Companies embracing e-business are able to dramatically improve and integrate key business processes using Internet technologies.

How does an organization How does an organization become an e-business?become an e-business?

What is the value of being an e-business?

How can customers achieve e-business value for their own organizations?

Opportunities

Serve customers worldwideGrow revenue

Increase market share

Become moreefficient

Reduce costs

Enhance communitiesCustomersPartnersEmployeesSuppliers

Real-life Value of e-business

Source: The McKenna Group and IBM.

Increased orders Improved dealer satisfaction75% lower transaction costs$60M saved

Manufacturing CompanyQuadrupled revenue Saved $2.8M Improved satisfaction

Retailer

Doubled policies soldSaved $.6M annually

Saved $4 millionReduced average ticket price

Airline

Telecommunications Company

Increased customer satisfaction Saved $2.5 million

Insurance Company

High Impact Processes

Banking and Finance Customer support and developmentCustomer acquisitionPayment and billing

Retail Distribution Customer acquisitionProcurement and inventory management

Manufacturing ProcurementInventory management

Customer acquisitionCustomer support and development

Telecommunication Customer support and developmentInvoicing

Insurance Customer acquisitionCustomer/channel support & developmentClaims processing (P&C only)

Travel

1998 1999 2000 2001 2002 20030

100

200

300

400

500

600

700U

sers

(Milli

ons)

Rest Of WorldJapan/APWestern EuropeNorth America

Worldwide Internet Growth

166M

261M

623M

542M

449M

350M

Source: IDC

1999 2000 2001 2002 2003 20040

100

200$Billions

Source: Forrester

Business-to-Consumer e-commerce

$184B(U.S. only)

Business-to-Business e-commerce

1999 2000 2001 2002 2003 20040

2000

4000

6000

8000$Billions

$7.29T

Source: GartnerGroup

(Worldwide)

Explosion of business

activity and competition

Power Shift in the Marketplace

Shift of power to the customerMore informedWorldwide vendor choiceEasier to transact

Shift of advantage to the agileCompanies that are preparedCompanies that can act quickly

Source: Booz, Allen & Hamilton and the Economist, May 1999, Survey of 600 WW CEOs

% of CEOs

76%

67%

56%

56%

54%

44%

Helping CEOs Reach Their Strategic Goals

Improve Customer Satisfaction

Reduce Cost Structure

Globalize Operations

Foster Innovation

Accelerate Speed to Market

Grow Market Share

Emerging Commerce Models

There's an upsurge of new intermediaries that offer innovative trading methods at attractive cost

They are pressuring traditional channels with their:

Low cost of operation Global reachLimitless scope of products and services

e-marketplaces

Two-way simultaneous auctions in which both buyer and seller prices float

Frictionless market

Seller

Buyer

Seller

Seller

SellerSeller

Seller

Buyer

Buyer

Buyer

Buyer

BuyerIntermediaries

NetworkedNetworkedHomeHome

SmartCardSmartCard

NetworkedNetworkedVehicleVehicle

MobileMobilee-businesse-business

Pervasive Computing

The Opportunity

Ubiquity and acceptanceof the Internet

Dramatic growth of e-commerceInnovative new business models

Pervasive access

To thrive, companies must harnessthe new e-business environment

The landscape is changing --And it's changing very quickly

Topic 1 Summary

An e-business is an organization using Internet technologies to connect critical business systems to major constituents

The e-business opportunity is growing at an extremely high rate and represents an increasing portion of customer spending and revenue potential

Topics

What is e-business?The e-business Cycle

IBM Application Framework for e-businessIntroduction to Friendly Foods Case Study

The Realities of e-business

Customers do not control the Internet. The world is heterogeneous; there are clients and servers. Downtime will affect more than employee productivity There is more pressure on development cycles than ever before.

Challenges

ServeServe Customers Customers WorldwideWorldwide

Open for business around the clock

all year longExpectation

of immediate response

Technology moving at

Web-year pace

Rules ofcompetition

changing

Dramatic effect onbusiness processes

Security and privacyare real concerns

Electronicvs.

personal touch

The Road to e-business

Complexity of Processes and Business ModelComplexity of Processes and Business Model

Maximum gainCultural and IT change"Bet your business"

Transformthe business

B2B and B2C transactions

Provide access to customer data

Publish info on the Web

TH E PU N Y

P A YOFF

F ROMOFFICE C

OM P

UTE RS

E D

ITORIA

L

H

Sp

e cia

l R ep or t

M AN

A GE M ENT 'SNE WES T

S T EP

Co v

er Sto ry

THE COM PUT E R

SLUM

P

S pe cia

l R eport

M A NA G EM ENT D ISCO VE R STHE H UM AN SI DE OF A UT OMA TI ON

Low impactNot difficult

Some valueSome effortNon-disruptiveMinor risk

Real functional benefitConsiderable effort, disruption, and risk

Infra

stru

ctur

e In

vest

men

tIn

frast

ruct

ure

Inve

stm

ent

New Thinking Is Required

Run

Leverage Transform

Build

On a Strategy Level:Organizational practices

must change

Solution Frameworks for e-business

On a Technology Level:Applications and

infrastructure must develop

Application Framework for e-business

The e-business Cycle - A Proven Approach

Buildnew

applications

Transformcore business

processes

Leverageknowledge andinformation

Runa scalable, available, safe environment

Transform Key Business ProcessesTransform

Customer loyaltyEmployee awareness, self help, and communicationSupply chain managementElectronic commerceBusiness Intelligence

Key Areas

CustomersCustomersMass merchandisingrelationship based on latest transaction

PersonalizationLong-term loyal relationship

EmployeesEmployees Functionally competentBroader awareness and expertise in efficientlyserving customers

SuppliersSuppliers VendorsPartners in serving the customer

ChannelsChannels Bricks and mortar Optimum mix of electronic and physical

Inventories Inventories and and SuppliesSupplies

Based on historical and market forecasts

Reflects current customer and market activity

Business Business StatusStatus

Executive view rolled up from functional activities

View based on up-to-the-minute integrated operational activity

GoalsToday

Transform

Becoming an e-business

Source: McKenna Group and IBM, 1998.

Industry

ProcurementInventory managementManufacturingManufacturing

Retail DistributionRetail Distribution

Process

InsuranceInsurance

TelecommunicationsTelecommunications

TravelTravel

Customer acquisitionProcurement and inventory management

Customer acquisitionCustomer/channel support and developmentClaims processing (P&C only)

Customer support and developmentInvoicing

Customer support and developmentCustomer acquisitionPayment and billing

Banking and Banking and FinanceFinance

Customer acquisitionCustomer support and development

High-Impact ProcessesTransform

Success Requires

Executive vision and commitment to adapting to e-business and building the business model to support itPriorities for business processesCompany-wide teamworkAccess to proven expertise

Planning consultingCustomer relationship servicesSupply chain management servicesE-commerce servicesBusiness management/ERP servicesReturn on Web investment

Transform

New applications that span and extend existing applications and dataReduce the time it takes to build and deploy applicationsDesign applications based on standards that span multiple platforms and vendorsBuild applications that are easier to expand and that evolve with market needs

Build Applications on Proven Assets

Build

Key Areas

Broad access via the WebOptimized to the individualFrom everywhere with anythingTo new and existing applications and information

A New Generation:Network-Centered Applications

Scalable, available, reliable applications Security and privacy built into applicationsFlexibility to evolve with market needs

Build

The Application Model You Choose Matters

NT LinuxAIX SolarisOS/2 NetWareHP-UXOS/400OS/390

BUILD RUN MANAGE

Build

Integrated applicationsExisting applications expanded with e-business functions Software that spans platforms and vendorsBuilt-in security and privacyStandards-based components that evolve with market needs

Success Requires

Build

Be open for business 24 hours a day, 7 days a week, 365 days a yearRespond rapidly to any and all requests Manage the extended enterprise effectivelyProvide a secure environment for electronic transactions and data transfersProtect customer privacyCreate a more cost-effective infrastructure that grows as business grows

Run An Enabling Infrastructure

Run

Key Areas

Available and Responsive

What's needed?What's needed? What's it worth?What's it worth?

Cost of outage

Lost business

Brand reputation

Personnel costs

Customer satisfaction

Loyalty

vs.

Redundancy

Scalability

Clustering

Workload Management

Availability

Run

A scalable, available, secure environmentOpen for business non-stopCapacity on demandAccessible from anywhereSingle-action management across the extended enterpriseAppropriate level of security

Success Requires

Run

A responsive cultureOrganizational knowledge shared across the companyInformation turned into action and market advantage

Improved brand imageCustomer needs anticipatedLoyal customers

Continuous ImprovementLeverageKey Areas

"An organization's ability to learn and translate that"An organization's ability to learn and translate that learning into action rapidly is the ultimate learning into action rapidly is the ultimate competitive business advantage." competitive business advantage."

Success Requires

An organization that learns from experience:Effectively captures and analyzes business informationMakes information available to the people who need itShares experience across the organization

Leverage

The Road to Successful e-business

e-business Success

Web presence

Web transactions

Webinformation

access

An integrated,enabled

e-business

Build

TransformLeverage

Run

Executive visionThe right approachExpert help

PeopleToolsSolutions

Topic 2 Summary

The e-business opportunity is growing at an extremely high rate and represents an increasing portion of customer spending and revenue potentialThe e-business opportunities with the highest ROI differ from one industry to another, but all face common challenges in:

Customer relationship managementSupply chain managementElectronic commerce

The e-business cycle defines IBM's approach to creating a successful e-business

Topics

What is e-business?The e-business CycleIBM Application Framework for e-business

Introduction to Friendly Foods Case Study

Topic 3 Objectives

Describe the Application Framework for e-businessState why the Application Framework for e-business is important Describe the main features of the Application Framework for e-businessList some of the products that support the framework

Web Publishing

e-business

Awareness Presence Pilot Adoption

Use the Internet Internally

Establish a Web site

Allow Access to Core Systems(read only)

Allow Transactionson Core Systems

Improve Core Business Process(es)

Redefine Core Process(es)

Stage of Adoption

Focus

Security Chasm

Business Value

Chasm

Next Generation e-business

Source : The McKenna Group Interviews and Analysis

Integrate Core and Redefined Processes with Partners and Customers

e-business Adoption Process

Process Investment

Cross- Process Integration

Value Network Creation

Supp

liers

Supp

liers

Custom

ersC

ustomers

EnterpriseEnterpriseResourceResourcePlanningPlanning

SupplySupplyChainChain

ManagementManagement

InfrastructureInfrastructure

e-comm

ercee-com

merce

CustomerCustomerRelationshipRelationshipManagementManagement

e-co

mm

erce

e-co

mm

erce

Business IntegrationBusiness Integration

Transforming Core Processes

CollaborationCollaborationBusiness IntelligenceBusiness Intelligence

Knowledge ManagementKnowledge Management

--

Web Presence e-business Transactions

Integrated e-business

"Next Generation"

Web-Based Collaboration

Pervasive Computing

Content Management

Business Intelligence

SecureNetwork

Systems Management

Web-based Transactions

Workflow/Business Integration

E-marketplace

Unified Portals

Web-Based MessagingWeb

Serving

Evolution of e-business Application Capabilities

--

Building e-business Applications

An architecture that enables continued e-business transformation through the use of:

An open, standards-based e-business platformPatterns for e-businessA comprehensive product set

Application Frameworkfor e-business

Build Run Manage

Windows NT/2000 Linux AIX NetWare Solaris HP-UX OS/2 OS/400 OS/390

© Copyright IBM Corp. 2001 27

Draft Document for Review April 10, 2001 5:40 pm 6248chIBMAF.fm

Chapter 2. IBM Application Framework for e-business

An e-business is an organization that interacts with its customers, suppliers, business partners, and employees using web technologies, reaching new markets, building lasting customer relationships.

The IBM Application Framework for e-business is a proven approach for building and integrating successful e-business applications. It includes products from IBM and other leading software vendors that are:

• Industry standards-based for maximum flexibility in a multivendor environment. The examples of such standards are: Linux, CORBA, Java, HTML and XML. It includes the client, application server, data, and infrastructure standards that make it possible for a client to access data and services anywhere in the network.

• Implemented on servers for rapid deployment and update.

• Scalable as offerings and volumes grow.

Figure 1 shows e-business applications implemented on servers tying customers to different e-business activities.

Figure 1. Server based e-business applications

The framework environment allows for:

• Building on existing IT investment to make use of the current information system deployed in the enterprise as well as to promote fast growth

• Reusing elements for quick action to capture opportunities and respond to challenges

• Designing management capabilities into the application for maximum performance and availability

Latest e-business information is available on the Web site:

http://www.ibm.com/ebusiness

In this chapter we introduce an overall view of the e-business Application Framework. Technology details of each component and their application to different domains will follow in the next chapters.

Branches Customer SupportCenters

CollaborationBusiness Intelligence

Business Partners

eCommerce

BusinessSystems

PC S erver

32 0

Web StandardsConnectors

WebApplication Server

Web Browser

Operational Dataand Applications

http://www-3.ibm.com/e-business/index.jsp

http://www-3.ibm.com/e-business/index.jsp

Jean Talbot

Chapter 2. IBM Application Framework for e-business 35

Draft Document for Review April 10, 2001 5:40 pm 6248chIBMAF.fm

Details on the architectural components of the Framework are available on the Architecture Overview white paper:

http://www-4.ibm.com/software/ebusiness/arch_overview.html

Following are the high level architecture elements of the Application Framework:

• System model, presents an overview of the system elements and interconnection between them.

• Application programming model, highlights the software tools and products used to build, run and manage e-business applications.

2.3.1 System modelIBM’s Application Framework for e-business provides a model for designing e-business solutions. The Framework is based on an n-tier distributed environment where any number of tiers of application logic and business services are separated into components that communicate with each other across a network. In its most basic form, the Framework can be depicted as a “logical” three-tier computing model, meaning that there is a logical, but not necessarily physical, separation of processes. This model is designed to support clients with high-function Web application and servers for small and large enterprises.

The characteristics imposed by the framework system model help designers to meet the requirements of e-business applications. Figure 7 shows a high level system model for running an e-business application.

Figure 7. The Application Framework system model

ServerServer320

MiddleTierFirst Tier ThirdTier

Webserver,Applicationserver,Transactionserver,

Servlets, JSP,BusinessLogic

Beans, DataAccessBeans, Connectors

TCP/IP

HTTP(S)

EnterpriseInformation

Systems

Thinclient,Browser

Netscape/IE,PDA,

Mobilephones,HTMLpages,

WebTV

http://www-4.ibm.com/software/ebusiness/arch_overview.html

Student Notebook

Figure 2-6. Attributes of e-business Applications (in212225)

Notes:

• Standards-based - Not proprietary

• Server-centric - most processing occurs on the server

• Leverage core systems - access/integrate with existing applications

• Scalable - handle large volumes of users

• Quick to deploy, easy to use - very short development cycles, little or no usertraining required

• Manageable - programs and data can be monitored and maintained

2-10 Application Framework DRAFT June 13, 2000 8:53 a.m. Copyright IBM Corp. 1997, 1999

Course materials may not be reproduced in whole or in partwithout the prior written permission of IBM.

Portable and Portable and InterchangeableInterchangeablePresentation/AccessPresentation/Access

Portable and Portable and InterchangeableInterchangeable

Data/DocumentsData/Documents

Portable and Portable and InterchangeableInterchangeableBusiness LogicBusiness Logic

WebWebXMLXML

JavaJavaLinuxLinux

Open andOpen andPortablePortable

Operating System ServicesOperating System Services

Open e-business Platform

Web Application Server ORB, Java VM,

RDB and Transaction

JavaServlets, JSP, EJBClient

HTML, XML,WML, VXML

Infrastructure TCP/IP, HTTP, SSL, X.509v3, LDAP, PKI, SNMP, WfM, WBEM...

IntegrationXML, CORBA/IIOP,

Messaging

Standards for :InfrastructurePresentationApplication LogicData Logic

LINUX

Standards - Leading the Industry

The Infrastructure for e-business

Infrastructure that meet business requirementsBuilding a flexible server environment


Build Run Manage


ApplianceServers

Web ApplicationServers

Data TransactionServers

ApplicationApplicationServerServer

Enterprise

Basic Transport

ClientClient

ClientClient

1990

NetworkClientNetwork

Client


Service Provider

Evolving Today

Intelligent Network

NetworkClient

NetworkClient

Security Directory

Network Mgmt.

Mobility

Policy Mgmt.Caching Transcoding

MulticastClass of Service

NetworkClient


Enterprise

Evolving Infrastructure

Student Notebook

Figure 2-8. Client/Server Extended Model (in212235)

Notes:

One model is the typical Client/Server model which:

Requires all clients be the same platformRequires the client and server be deployed at the same time

This means that many applications are hardware, software, server dependent.

2-12 Application Framework DRAFT June 13, 2000 8:53 a.m. Copyright IBM Corp. 1997, 1999


Student Notebook

Figure 2-9. e-business Application Model (in212240)

Notes:

Another model is an e-business application model which:

• Integrates with existing hardware and software implementations• Supports the universal client

This means you can build the application without regard to the hardware and softwareon the client.

Unit 2. Introduction to the Application Framework 2-13 Copyright IBM Corp. 1997, 1999


e-business Evolution

Infr

astr

uctu

re In

vest

men

t

Optimal Investment

Awareness Presence Pilot Adoption Process Investment


Stage of e-business Adoption


Over - InvestmentWaste of Capital

Under - InvestmentLoss of Customers

e-business Infrastructure Investment

e-business Evolution

Infr

astr

uct

ure

In

vest

men

t

Technology A

Technology B

Technology C

Optimal Investment

Stage of e-business Adoption

Technology Shift

Stretching a technology beyond its design point is sub-optimal."One size" does not fit all.

e-business Infrastructure Investment

Awareness Presence Pilot Adoption Process Investment



A

B

C

The IBM Advantage

11 Flexible and scalable design acrossinfrastructures and platforms

Adopt e-business Application ModelRely on multiplatform standards

22 Products and technologies that make it work Speed growth and extend assetsBuild on a proven foundation witha sound futureHarness the power of integratedenterprise-class middleware and tools

33TM

Knowledge and expertise to acceleratee-business transformation

Start fast and smart with IBM services


Build Run Manage


OS/400OS/2 AIX HP-UX Solaris OS/390NT

DevelopmentTools and

Components

Application Server

Software

Secure Networkand Management

Software

IBM Application Framework for e-business

Field-tested methodology simplifies development and deploymentRich product portfolio supports simple to sophisticated applicationsBased on cross-platform standards including JavaFocus is on building solutions, not on details of products/components

IntroductionBackup.PRZ 5

IBM VisualAge

Helps professional programmers extend existing applications and add new functionVisual programming environmentSupports major languages, platforms and team development

Lotus DominoDesigner

IBM WebSphereStudio

Provides integrated tools and workbench for developers using IBM WebSphere Wizards guide development of servlets and JavaBeansSite management

Customizable templates that speed deployment of collaborative applicationsBuilt-in services like workflow, content management and full-text searchVisual development environment

Reusable business components accelerate delivery of applications running on e-business servers

SanFrancisco and eSuite

Development Tools and Components


IBM MQSeries

Connect applicationsSpeed application deployment and integrationManage and integrate business process flow across more than 35 application environments

Rapidly develop and deploy collaborative applicationsAdvanced capabilities for managing work and information flowIntegration with database, ERP and transaction systems

Speed transition from publishing to Web-based transactionsFor transaction intensive environmentsSupport for distributed business components

Lotus Domino IBM WebSphere DB2 UniversalDatabase

Best performing database for UNIX and NTHandles multimedia as well as conventional dataOptimized for Web applicationsDelivers enterprise class reliability and availability

Application Server Software


IBM SecureWay Family

Scaleable, standards-based cross-platform directoryDirectoryintegration across an extended enterprise

Tivoli

Standards-based Public Key Infrastructure (PKI)Integrated security

Simplest solution for host integrationDeliver Web applications"on demand"Mobile access

Locate Connect Secure Manage

Scaleable, open, cross-platformSingle-action managementEasy deployment and maintenanceBusiness system management

Secure Network and Management Software


ScalableReliableFlexibleSecureSupporting heterogeneous environmentsBased on open standards

Topic 3 Summary - A Complete Platform for e-business


Build Run Manage


Security

Client Network Server Appl.Server

Enterprise Data and

Applications

Systems Management

Connectors

Performance

e-business Building Blocks

Client Building Block

Main Issues/Decisions:Internet vs. Intranet customerUser skill levelSite language supportUsers' usage patternsApplication code distributionApplication maintain stateEnd-to-end response time

Client

Network Building Block

Main Issues/Decisions:Internet involvementProtocol useData, object, and application placementsSecurity functions Network functionEnd-to-end response time

Network

Server/Application Server Building Block

Main Issues/Decisions:Single or multiple server designClient choice and server designNumber of tiersDevelopment technologyClient-side logic and server-side logicPresentation, application, and data

access logicDistributed object support End-to-end response time

Appl.ServerServer

HTTP ServersServe up Web pagesServe up clients (Java Applet classes) Web Application Servers

Run (Java) componentsRun transactionsIntegrate with legacy data and applications

Commerce ServersSecure paymentShopping cartsBrowse catalogPersonalized shopping

Server Types

Connectors Building Block

Main Issues/Decisions:Enterprise systems, applications, and data accessData transferInformation statusSynchronous or asynchronous connectionsSecurity policiesOperating system, network protocols, and application environment connections

Connectors

Main Issues/Decisions:Transaction encryptionUser identificationClients/servers securityAccess restrictionsSecurity data storagePrivacy rulesLegal requirementsCompany policies

Security

Security Building Block

Performance Building Block

Main Issues/Decisions:Projected user volumeScalabilityAvailability requirementsServer workload managementSite statisticsPerformance measurement

Performance

Management Building Block

Main Issues/Decisions:Infrastructure installationDistributed application deploymentUser and security administrationSoftware distributionApplication monitoringResource management

Management

Topic 1 Summary

Now that you have completed this topic, you should be able to:List the main technology building blocks that affect e-business solutionsDescribe the main issues that each building block must considerDescribe the role each building block plays in the e-business application or solution