E-BUSINESS TRENDSeprints.qut.edu.au/2766/1/2766.pdf · E-BUSINESS TRENDS by Nariida Smith CSIRO ... the buying and selling of goods and services on the net - ... We therefore aim

Working Paper 2 of the E-Business and Transport Project

for

The National Transport Secretariat

E-BUSINESS TRENDS

by

Nariida Smith CSIRO - Building, Construction and Engineering

&

Luis Ferreira Queensland University of Technology

&

Elspeth Mead Queensland University of Technology

19 October 2000

For further information or clarification please contact

Dr Nariida Smith Principal Research Scientist CSIRO Building, Construction and Engineering PO Box 310 North Ryde NSW 1670 Phone 02 9490 5466 Fax 02 9490 5777 e-mail [email protected] This research was undertaken in collaboration with the Built Environment Research Unit of the Queensland Department of Public Works. © CSIRO/QUT 2000

E-Business Trends Working Paper 2

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EXECUTIVE SUMMARY

The second Working Paper for the impacts of e-business on transport project, reports on a

literature and document search for trends and developments in e-business, which may have

significant transport impacts. E-business is defined as including e-commerce, either between

Businesses to Business [B2B] or Business to Customers [B2C], and the adoption of electronic

technology within businesses.

We suggest that growth in e-business stems from the combined existence of: market demand;

suitable enabling technology; and skills/familiarity in management/users/ industry/government.

Thus, we consider:

Internet Readiness: for example, 46% of Australian adults had accessed the Internet [May,

2000]; 37% of businesses had Internet access as did 88% of government organisations [June

1999]. Training will be needed for the IT professions and the community at large, but the more

urgent need is for e-business management skills.

The Market: for e-business in terms of: products, including the move of established retailers

into e-business, and increases plus changes in the services offered by intermediaries; place or

channels such as electronic portals as new market places for industry/consumers and e-

fulfilment, the new logistics practices required by e-business; regional and international

promotion to, and then the price of e-business, security for business and safety for consumers.

Technology: in four categories of application: Standardisation, for interoperability of both

hardware and software; Ease of use with new languages such as XML offering wider markets

and bandwidth limitations slowing uptake; New technologies such as electronic agents to help

users sift unwieldy amounts of information to find products, services, and even each other; and

finally Security devices such as biometric recognition.

Applications are discussed in relation to:

B2B: National and global sourcing, e-procurement is set to boom; Supply chain management,

tailoring orders to specifically service customers; Regional industries and SMEs entering the

market.

B2C: is divided into activities which require physical travel or transfer of goods such as

shopping and travel/tourism; then virtual services such as entertainment/infotainment, online

banking and trading, then health and education.

We conclude with a tabulation of the estimated significance of the developments discussed for

e-business in the short-term 2001-2005 and medium-term 2006-2010.


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TABLE OF CONTENTS

EXECUTIVE SUMMARY ................................................................................................ II

TABLE OF CONTENTS ..................................................................................................III

TABLE OF FIGURES ......................................................................................................IV

1 INTRODUCTION ................................................................................................... 1

1.1 E-BUSINESS AND E-COMMERCE....................................................................................1

1.2 E-BUSINESS AND TRANSPORT .......................................................................................2

2 E-BUSINESS READINESS.................................................................................... 3

2.1 HERE AND NOW 1999 - 2000.............................................................................................3

2.2 USERS ONLINE INTERNATIONALLY.............................................................................5

2.3 UP-SKILLING FOR THE FUTURE.....................................................................................7

3 MARKET CHANGES ............................................................................................ 8

3.1 PRODUCTS IN AND OF THE MARKET ..........................................................................9

3.2 PLACE: ELECTRONIC AND PHYSICAL CHANNELS..................................................11

3.3 PROMOTION AUSTRALIA ALL OVER..........................................................................13

4 TECHNOLOGY TRENDS................................................................................... 16

4.1 STANDARDISATION ........................................................................................................16

4.2 EASE OF USE .....................................................................................................................17

4.3 SECURITY DEVICES AND APPROACHES....................................................................19

4.4 NEW TYPES OF SERVICES..............................................................................................19

5 B2B SPECIFIC ...................................................................................................... 21

5.1 NATIONAL/ GLOBAL SOURCING .................................................................................21

5.2 SUPPLY CHAIN CHANGES .............................................................................................21


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5.3 REGIONAL AND RURAL INDUSTRIES.........................................................................22

5.4 SME’S ENTERING THE MARKET ..................................................................................22

6 B2C GOODS AND SITE SPECIFIC SERVICES.............................................. 23

6.1 SHOPPING: STAPLES AND DISCRETIONARY ITEMS...............................................23

6.2 TRAVEL AND TOURISM .................................................................................................24

6.3 SERVICES: GOING OUT AND COMING IN...................................................................25

7 B2C VIRTUAL SERVICES ................................................................................. 26

7.1 ENTERTAINMENT /INFOTAINMENT............................................................................26

7.2 ONLINE BANKING / SHARE TRADING/ BILL PAYMENT .........................................27

7.3 HEALTH AND EDUCATION............................................................................................28

8 SIGNIFICANCE OF E-BUSINESS TRENDS.................................................... 29

REFERENCES AND BIBLIOGRAPHY ........................................................................ 31

GLOSSARY ....................................................................................................................... 36

TABLE OF FIGURES

Figure 1: Business Types with Computers and Internet Access - June 1999. ....................................................4 Figure 2: Monthly Increase in Global Internet Access. ......................................................................................6 Figure 3: Countries With More Than 20% of Population Online - September 2000..........................................6 Figure 4: Middlemen Roles in Old Industrial Economy and New Information Economy. ..............................10 Figure 5: Sears Carrefour GlobalNetXchange..................................................................................................11 Figure 6: Links Between OIC Strategies and the Premier’s Vision - WA Online: Regional Strategies...........13 Figure 7: Cost Structures in Vendor to Customer Transactions. ......................................................................14 Figure 8: UDDI. ...............................................................................................................................................16 Figure 9: Woolworths Online at http://www.woolworths.com.au/...................................................................24 Figure 10: Banking Online at htttp://www.anz.com.au. ...................................................................................27 Figure 11: Estimated Significance of Developments for E-business................................................................30


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1 INTRODUCTION

1.1 E-Business and E-Commerce

This is the second Working Paper from a project designed to consider the impacts of e-business

on the Australian transport system, together with any constraints that the transport system might

place on e-commerce opportunities. As noted in our first paper, which considers the issues

involved in assessing the impacts of e-business on transport [Smith et al., 2000], the very rapid

growth of e-business provides several forecasting challenges. Many of the usual prediction

paradigms break down. Careful consideration of probable new developments and trends in e-

business itself is needed before we can assess its transport impacts.

We repeat here the operational definition of e-business used in this study, as encompassing e-

commerce including Business to Business [B2B] or Business to Consumer [B2C] and initiatives

within firms:

"Electronic commerce [e-commerce], the buying and selling of goods and services on the net - or worldwide web - is growing at a phenomenal rate as companies and consumers discover the benefits of instant access to data and the ability to make on-screen transactions. But e-commerce is not the whole story. Through the rapid development of information technology, businesses can link up all their internal and external activities - from supply and purchasing to sales and marketing - into a single seamless operation. This is defined as e-business, although the two terms are often used interchangeably." [Fisher, 1999]

When this definition is used, e-business is not such a new phenomenon as electronic data

interchange has existed for around thirty years. At the same time business has been accustomed

to bidding for share or commodities via organised markets. This may help to explain the

explosion of B2B e-commerce once the Internet provided enabling technology. We will suggest

that growth in e-business stems from a combination of:

• Existence of a market demand or need;

• Existence of suitable enabling technology; and

• Existence of skills/familiarity in management/users/ industry/government.

E-business particularly provides increased speed and/or reach. For all advantages there are

associated constraints, however, we choose to discuss these in the context of their related

positive opportunities. We consider first, in Section Two, the current state of the Internet

economy in Australia, which provides our current skill and knowledge base. Section Three then

addresses the market for the various strands of e-business and Section Four considers

technology, including both hardware and software that is coming online. This is followed in the


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later sections of the paper by discussion of some resulting developments in B2B and B2C

activities. B2C is further divided into activities, which require physical travel or transfer of

goods, and those that are virtual. The final section of the paper describes the overall impact of

these changes on communities in Australia.

1.2 E-business and Transport

It would take a book, or perhaps an encyclopedia, rather than a paper, to fully assess all

emerging trends in e-business. Thus we concentrate on those that have particular transport

impacts. The special nature of transport means that we need to consider three types of impacts:

Indirect Impacts: Demand for transport is a derived demand arising from the need for personal

travel or movement of goods from one place to another. Thus, growth in any areas of the

economy can lead to increased transport demand. For example, increased goods or services

production can increase call for deliveries, or general growth in the economy may lead to

increased construction with more truck movements to building sites.

Inverse Impacts: Just as e-business growth may lead to general growth in the movement of

goods and services, transport constraints could stifle e-business growth.

Direct Impacts: Like other businesses, transport organisations, from large multinationals to

small local carriers, are effected by the e-business revolution in two ways. Generic applications

available to business in general are used for purposes such as automating offices. At the same

time industry specific applications such as automated vehicle tracking in transport, are being

taken up. Similarly, businesses are impacted by these changes in two ways, internally, when

they adopt them, and externally, when their suppliers or customers adopt them.

All growth in e-business can have some transport impacts and this causes a dilemma in setting

the scope of consideration for this paper. We therefore aim to limit discussion to developments,

which will have very large impacts on business in general, or have significant transport impacts.

For example, there are many developments in four areas of e-commerce: web site design,

product development, marketing and e-fulfilment. First, we concentrate on product

development and marketing as it affects overall e-business take up. We then consider e-

fulfilment, which is concerned with the logistics of physical delivery of goods sold via e-

commerce, for its transport implications. We merely indicate growth in areas rather than discuss

specific transport implications, as this is the task of the third Working Paper in this series. We

also leave discussion of specific e-business transport applications, which some people in the


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industry strongly believe extend to Intelligent Transport Systems [ITS], to Working Paper

Three.

Before proceeding to our discussion of trends we note that we can offer only an overview rather

than in-depth analysis of trends. Discussion is based on a literature review and document review

of newspapers and reputable Internet sources. We note that the published academic literature

[due to the delays between the timing of research and publications dates], needs to be

augmented by information from sources that allow quicker or instant publication. However,

newspaper reports can seldom offer in-depth analysis. Moreover, although this paper addresses

a key change in the use of the Internet from publication of content to service provision, the

WorldWide Web [WWW] provides a vast library of content. Rather than trawl through all

sources for all trends, we have searched and followed up articles on trends of interest. Thus this

work should be read in its context, as a paper to inform our future consideration of possible e-

business impacts on transport rather than a study of e-business futures. Finally, it is impossible

to report on e-business without some use of e-jargon. We provide a glossary to assist in

interpretation and expect criticism for both too little and too much use of e-language, depending

upon the views of the reader.

2 E-BUSINESS READINESS

2.1 Here and Now 1999 - 2000

The extent to which opportunities provided are taken up depends on the ability of industry and

consumers to do so. This in turn depends on the current state of skills and knowledge and also

on existing facilities. The rise of e-business is just one part of a global change to the information

economy. The National Office of the Information Economy [NOIE] has been set up to monitor

and report these trends. It is a particular concern of NTS that this work should not “reinvent the

wheel”, but take into account available work from state and federal investigations. We thus

direct readers to a recent NOIE report which reports a full assessment of the “The Current State

of Play” in Australia [NOIE, 2000c]. However the rapid rise in take-up of e-technology means

that any numbers are out of date almost as soon as they are produced, and even “The Current

State of Play” is no longer current. Here we report the latest available Australian Bureau of

Statistics [ABS] figures highlighting particularly relevant results at a national level.

Whether statistics are all drawn from a single report or augmented by data from several sources,

care must be taken in comparing data across industry sectors or localities. Statistics may have

been collected at slightly different dates. In most circumstances this does not matter but with


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Internet take up it renders comparisons almost worthless. The numbers can instead be used as

indicators of the lower bounds for usage and are thus valuable for setting predictions of future

use in context. We have deliberately chosen to report on data trends in a later report so that our

final reports are based on the most up to date data available.

Population and Households Online: By May 2000, 67% of Australian adults had accessed a

computer, either at home, [47%], or in the workplace [43%] in the last year. Thirty-eight

percent of adults accessed the Internet from other places, either through other people’s

computers [22%], the library [14%] or educational institutions [11%]. [Source: ABS, 2000b]

Of the 46% of Australian adults who accessed the Internet from May 1999 to May 2000, 28%

accessed the Internet from their homes and 21% from their workplace. Another 23% accessed

the Internet from other places, such as other people’s homes [14%] educational institutions [7%]

and at libraries [5%]. [Source: ABS, 2000b]

Many people are accessing the Internet for private purposes, such as shopping or browsing at

work, as well as at home. There are also increasing opportunities for public access both at

Internet cafes, or even terminals in shopping malls. Local government also provides public

access to the Internet in libraries and community centres.

Businesses Online: At the end of June 1999 in Australia, 72% of employing businesses

[excluding agricultural businesses] used computers. This is a significant increase from the 49%

of businesses using computers in 1994. Thirty-seven percent of all businesses had Internet

access.

Figure 1: Business Types with Computers and Internet Access - June 1999.

[Source: ABS, 2000a]

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Access to the Internet at the end of June 1999 was highest in Electricity, Gas and Water supply

[72%], Property and Business services [63%], Mining [56%], and, Finance and Insurance

[56%]. Lower proportions of Internet access were recorded in the business sectors of

Accommodation, Cafes and Restaurants [17%], and, Transport and Storage [19%]. [Source:

ABS, 2000a]

Government Online: At the end of the financial year 1997-1998, 95% of Government

organisations in Australia used computers with 73% having access to the Internet. With a

further 15% of government organisations expressing the intention of obtaining Internet access in

the next financial year, it was projected that 88% of government organisations would have

Internet access by June 1999. Whereas some government organisations [37%] had web

sites/home pages, a further 33% indicated they intend to obtain web sites/home pages in the next

financial year. This adds to 70% of government organisations expected to have web sites/home

pages by June 1999. [Source: ABS, 1999]

Government organisations use the Internet for a variety of activities, with a significant

proportion of activity for e-mail [97%]. The Internet is highly utilised for receiving [45%] and

lodging [28%] government forms and tenders, whilst other Internet activities include marketing

and promotional activities [31%]. [Source: ABS, 1999]

2.2 Users Online Internationally

In a global economy neither e-business nor its customers are limited by national boundaries.

Therefore, it is important that international populations online are considered. Presently, global

access to Internet services is increasing exponentially with over 378 million users online.

Although this equates to only 6.2% of the world’s population this is a significant increase from

the 201 million online [4.8%] in September 1999 and 147 million online [3.6%] in September

1998 [NUA, 2000b.


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Figure 2: Monthly Increase in Global Internet Access.

[Source: NUA, 2000b, Oct, Nov 98, Jan, Oct, Nov and Dec 99, April and May 2000 calculated.]

From a global perspective, 22 countries have over 20% of their populations online. Australia

has 40.5% of the population online, surpassed by Singapore [41.9%], the Netherlands [42.8%],

Norway [49.6%], Sweden 50.7%], Iceland [52.1%] and the United States of America [53.7%]

[NUA, 2000a].

Figure 3: Countries With More Than 20% of Population Online - September 2000.

[Source: NUA, 2000a]

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2.3 Up-skilling for the Future

There are three broad areas where skills and knowledge will be needed in step with e-business

changes:

Information Technology Professionals: The need for information technology professionals is

widely understood and acknowledged in all areas of the economy. Apart from numbers of

industry reports pointing to this need, the size of situations vacant columns, both in newspapers

and their electronic counterparts, provide ample evidence of demand for such skills. There have

also been reports, for example, “The New Australian Learning System”, produced by

professional organisations, including the Institution of Engineers Australia [Victoria] [IEAust,

2000], stressing the importance of lifelong learning systems to provide ongoing training to keep

pace with rapid change.

Community Education: Numbers of initiatives are under way to prepare the community at large

to cope with the information age. All State education department have had initiatives in place to

ensure that literacy in information technology is added to the basic skill sets of all school

leavers, see for example “Learning Technologies in Victorian Schools 1998-2001” [Education

Victoria, 1998]. While this is helpful for the future, it is also necessary to address the skills of

people who have left school before computer training was provided, or indeed before computers

were even invented. Governments and private organisations are addressing this need. For

example the Western Australian Premier announced in his speech at the 2000 Summer School

opening:

“Our vision is that all Western Australians can join and benefit in the digital revolution by ensuring all homes are online regardless of their location or financial circumstances and we would like to achieve that within five years.” [Court, 2000]

This will include education throughout communities as a key plank in the program.

Management Skills: Addressing limits in understanding communication technologies by those

making decisions in Australian business may be the most important, but least acknowledged

area of the up-skilling necessary to take up opportunities from e-business. This is not related to

the keyboard skills of individual managers but rather it pertains to their broader education in the

opportunities and pitfalls of the new economy and those areas particularly relevant to their

industries. It has been suggested that there are three levels of entry into e-business: first

procurement, second Internet presence and third e-business-based strategies. With most

businesses at level one or two, business skills to get to the final level will be needed [Teresko,

2000].


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While some consultants may be available to provide advice, even to engage such people and to

set their briefs requires understanding and knowledge. The concept of lifelong learning applies

equally in this context. New courses are becoming available in management of IT, in e-business

itself and most MBA programs offer IT and e-business strands.

Institutional Practices: E-business plans often depend on the financial institutions that support

them and government regulation, ranging from permits to tax treatment. The assessment

frameworks used by institution and government are usually those that served the old economy

well, but may have problems accommodating the new. The need to trade across jurisdictional

boundaries can cause problems as can the speed of change in technology. For example, vehicle

fleet financing institutions may use actuarial data to establish the value of fitting safety devices

to vehicles. Electronic back to base devices for reporting crashes do not have a “track record”

for such assessment and before they can develop on the available technology, the technology

will have again changed.

3 MARKET CHANGES

We address market issues before discussing technology in view of the “sea change” in e-

business from technology push to market pull. This has been described as the businessmen

taking over from the “techs”. It has immediate implications for the up-take of technology for at

least two reasons:

• Decision making about e-business has moved to higher up the echelons of power in

companies; and

• There has been a change in emphasis from the technology the IT professionals want to

build, to the IT people want to use.

At the same time, it has been argued that e-business changes the market emphasis from supplier

push to customer pull, whether the customer status is that of another business or private

individual. While some commentators consider that the e-marketplace is entirely new, we take

the view that it is still useful to consider the likely success of e-business products using the

traditional 4Ps of marketing: product, place, promotion and price [King, 2000]. We do so in line

with our view that, while technologies may be completely new, they are introduced to markets

that mix both old and new practices and sold to managers or consumers, who, likewise are all

subjects of their own histories. Thus we group important market developments as related to

products, both new e-business services and goods or services new to the electronic market

place; place, e-business distribution systems and channels; promotion, target markets and


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geographic regions concluding with discussion of price, including the pricing of

telecommunications infrastructure and service.

3.1 Products In and Of the Market

Bricks to Clicks: In the first phase of e-commerce, the new “dot.com” online companies

challenged the traditional ones. However, “the empires are now striking back” as established

companies embrace the Internet moving from “bricks to clicks”. While almost all large

companies have adopted some e-business practices, a new round of deeper adoption of full e-

business strategies is beginning. Companies have decided to take on the new e-tailers who have

been eroding their market share, and with the benefit of established capital, depth of

management expertise and established networks, they intend to win.

A particularly relevant example here is the new General Motors e-GM unit to pull all GM’s

electronic B2B, B2C, in-vehicle wireless and web-based service initiatives under a single chain

of command that will extend to the top of the global organisation. GMs goal is to first offer its

car models directly to thousands of customers worldwide via a single web transaction. The

customer relationship would then be expanded to include wireless Internet services throughout

the life of the car such as interactive navigation services [Gardner, 1999]. In taking up such a

strategy GM, in common with other companies, needs to avoid losing existing supply channels.

In GM’s case, independent dealers could move to other car suppliers.

Apart from the big influence large companies entering the market will have on B2B transactions

along supply chains, they also bring extra confidence for clients not comfortable with the idea of

online shopping. Brand name equates with customer trust. There is far less concern in providing

credit card details to a known large company with a visible presence, such as Woolworths or

Coles, compared to an unknown company somewhere in virtual space.

E-commerce development is now turning full circle, as a growing number of dot.com

companies are opening physical stores to sell their products moving from “Clicks to Bricks”.

For example, the Personal Computer [PC] company Gateway, which previously sold direct to

consumers by Internet or phone, has opened nearly 200 stores across the USA [Sandoval, 1999].

It is worth noting that the same excellent supply chain management which allow the customer to

track the ordered PC from factory to delivery also applies in the new setting.

“Middleman” Services: Initially, numbers of commentators, for example Benjamin and Wigand

[1995], saw the Internet as providing opportunities for direct communication between suppliers

and customers, saving transaction costs for companies by elimination of “middlemen”.


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Experience has shown, however, that while some kinds of intermediaries were cut out, the

Internet provides new opportunities for middlemen. New types of roles include electronic data-

brokers collection, aggregation then dissemination of data to customers [Sarkar et al., 1996].

New interpretations of old roles, include packaging and on-selling of market research, and

particularly sourcing of goods or services by agents on behalf of customers.

New Intermediaries for Tradition Services: While agents have existed as long as markets, the

Internet makes it possible for agents to link more suppliers to more customers at lower prices,

making the service more affordable and thus available to many more people. They are

particularly welcomed by “time poor” companies and individuals. It has been suggested that

electronic intermediaries may change traditional linear supply chains [Vandermerwe, 1999].

Figure 4: Middlemen Roles in Old Industrial Economy and New Information Economy.

[Source: after Vandermerwe 1999]

Intermediaries to Service Web Needs: While some intermediaries carry out existing tasks in

new ways, others provide services needed specifically by web-based businesses. For example,

ANZ operates and manages an online financial gateway to manage secure Internet transactions

[ANZ, 2000a]. ANZ eGate provides online multi-payment solutions through integration with

non-Internet commerce systems, such as Interactive Voice Response [IVR], or Mail Order

Telephone Order [MOTO]. This type of intermediary provides both security and extended

services.

Other intermediaries exist purely to offer secure connections. For example, trusted services,

such as certification authorities and registration authorities, are of particular relevance to the

Internet. Kueter and Fisher [1999] discuss business models for trusted services based on the

BESTS – Business Environment Study of Trusted Services, carried out in 1988 for the

European Commission.

Middle men

Providers End Users

Manufacturers End user Middle men


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3.2 Place: Electronic and Physical Channels

Portals: Portals can be viewed as the electronic equivalent of a traditional physical market

place. Thus, there seems little doubt that portals will be an integral part of the e-commerce in

the future and their overall influence is likely to increase. Currently, portals serve two broad

types of market in two different manners:

Industry Portals have been set up predominantly for procurement analogous to wholesaler

market places. Vertical Portals are set up to focus on particular industries. For example,

GlobalNetXchange is where the retail giants Carrefour, Sears, Kroger Sainbury, Metro and

Coles deal with 70,000 suppliers, partners and distributors worldwide [Oracle Corp, 2000].

Horizontal Portals in contrast harness the collective buying power of a few big companies to

obtain bargain pricing on a variety of purchases, such as office supplies, not necessarily integral

to the final products of the company. High volume, low value items of that kind consume a lot

of money in large companies. The first significant horizontal portal initiative in Australia was

E.comony set up by PricewaterhouseCooper [PwC, 2000b]. The final category of industry

portal, less relevant in Australia, is the single company owned portal for procurement by very

large companies with branches widely spread geographically, for example, Wal-Mart RetailLink

in the USA [Cuneo, 2000].

Figure 5: Sears Carrefour GlobalNetXchange.

[Source: Oracle Corp, 2000]


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Consumer Portals provide access to the general public to a range of goods and entertainment, an

extension of a community market or a shopping mall or, alternately, they concentrate on access

to a narrower range of services.

All market places need to consider specialisation versus diversification and optimum size.

However, these questions are much more significant for electronic portals without physical

constraints to limit size. This is particularly relevant for consumer portals where the portal

supplier derives profits from a variety of sources including advertising on the site. The portals

which survive in the future will be those which manage size and degree of specialisation. For

example, the Walt Disney Internet has just relaunched a revamped Go.com portal with a focus

on leisure content rather than general news and entertainment [Tourtellotte, 2000].

There is further discussion of portal related issues in later discussion of specific B2B and B2C

applications.

E-fulfilment : E-fulfilment is the unique process of providing physical products for e-commerce

customers which includes activities such as telemarketing operations, customer service,

warehousing and shipping, procurement and inventory management, processing and disposition

of returns. While other electronic commerce strategies, such as product development and web

site design, attract more media attention, e-fulfilment is one of the key determinants of e-

commerce success or failure, since the majority of e-commerce businesses sell physical

products. See for example, Swarzt [2000].

Fulfilment of customer orders is not a new concept, yet while it is too early to define a “right”

way of e-fulfilment, there is a general agreement that just adding an electronic ordering system

to an existing supply and distribution system is the wrong way. Companies setting up or moving

into e-commerce have a series of opportunities for new practices. These include establishment

of purpose built distribution centres, shipping to affiliates, and delivery, for out-sourcing e-

fulfilment.

You’ve Got E-mail: No discussion of e-business communication channels would be complete

without the some discussion of the communications tool used by almost all businesses and for

that matter consumers connected to the Internet. An IDC study has found the number of e-mails

sent on an average day is expected to hit 10 billion worldwide this year and they predict that the

figure will triple to 35 billion in 2005 [The Australian, 2000a]. In this context, software to

provide automated systems access, scanning, routing and storage to handle this deluge of


CSIRO & QUT Page 13

communications will definitely be needed. Reassessment of appropriate uses of e-mail both

within and between businesses may also be appropriate.

3.3 Promotion Australia All Over

Regional Markets: Improved telecommunications are widely cited as being a way of

overcoming rural and regional disadvantage. Programs to use the Internet to overcome the

tyranny of distance are being implemented by governments across Australia, for example, “WA

Online” [WA, 2000]. The intention is to both provide better quality of life and particularly

assist regional businesses. As the advantage is derived specifically from improved access to

wider markets, in our context we need to consider where such promotion will have particular

advantages, which will in turn have implications for transport.

Figure 6: Links Between OIC Strategies and the Premier’s Vision - WA Online: Regional

Strategies.

[Source: Adapted from WA, 2000]

International Markets: Austrade is delivering a series of 240 e-commerce workshops across

Australia, as part of an e-commerce exports initiative. The workshops cover both the strategic

and practical aspects of e-commerce for exporters and draw on Austrade’s information base and

professional expertise. Ros Mitchelson from the Austrade Commission for North Queensland

stated:

“E-commerce … presents great opportunities for local exporters, both large and small and irrespective of location to increase exports and generate jobs” [NOIE, 2000b].

Phase One:Technology inschools &teachertraining.

Phase Two:Educatingparents &other groupsto utilisetechnology.

Phase Three:Connectinghomes to theInternet &providingtuition.

Phase Four:Government& privatesector servicesonline.

Telecommunications

IndustryDevelopment

Business &Community Online

E-commerceDevelopment

Government Online

Primary Influence Secondary Influence


CSIRO & QUT Page 14

Other government authorities and industry groups share this opinion and are offering both

sessions on e-commerce, as part of meetings and conferences together with specific purpose

seminars on the subject, for example, the Australian Food and Grocery Council [AFGC, 2000].

As similar initiatives are taking place across the globe, the threats, as well as the opportunities,

from a wider market place will need to be considered.

Prices, Costs, Security and Regulations: While numbers of commentators emphasise the

potential for e-business to cuts cost, it is clear that not all e-business services are cheaper than

their conventional alternatives. Both the actual amount saved and its impact on the final price

will differ from business to business.

Figure 7: Cost Structures in Vendor to Customer Transactions.

Figure 7 shows the cost structures which determine the final price of services. There are also

additional costs that need to be factored into the price.

Security for Business and Clients: Organisations need to include within their e-business

strategy processes for ensuring the confidentiality, integrity and availability of their data. These

are key issues in general consideration of e-trends. As expected the rises in e-business is

accompanied by a rise in e-crime. Increased value in business information in a knowledge

economy increases incentive for theft and electronic access makes theft easier. Apart from theft,

e-business systems are also vulnerable to sabotage of data and systems by people both inside

and outside the firm. The speed and reach of the Internet, together with increasing automation

of systems, makes these systems throughout the world vulnerable. In May 2000, the virus “I

love you” infected the world via e-mail and is estimated to have cost industry and government

upward of $US10 billion dollars [Investor.com, 2000].

As our study deals with the rise in e-business and its subsequent transport impacts, we view

security issues in terms of adding to costs or setting barriers to market entry. For further

Other

Transaction Costs

Transportation Search

Costs

Customer Financial

Services

Vendor


CSIRO & QUT Page 15

discussion of security issues and strategies we direct readers to some of the many reports on the

subject for example, [NOIE, 2000d, KPMG 2000a].

Barriers to entry include:

• Concerns about outsiders accessing company data for theft or damage;

• Concerns about client privacy;

• Concerns about security risks from third party service providers and potential partners; and

• Fears about loss of consumer confidence from negative publicity about e-business security.

Cyber defence architecture, or in layman’s terms, systems to guard against such fears, all come

at a cost. Some of these costs are IT related but other are issues of due diligence in assessing

firms and individuals with access to systems. At the same time, systems recovery in case of

breach also adds to costs. There are problems in recovering those costs via legal systems. The

law lags behind e-technology and the criminal, even if identified, could be on the other side of

the world.

Australia’s standards agencies are now putting in place electronic security standards to allay

fears of businesses entering the new economy. Together with New Zealand protocol agencies,

they are finalising a system for accrediting companies who meet Internet security standards.

Standards and accreditation procedures will govern certification, security of information for

companies and individuals and risk management. The federal government will be among the

first large organisations to promote the standards as mandatory part of doing business

[Zampetakis, 2000].

Safety for Households: Households considering Internet use, are faced with a different set of

Internet security issues. All can have legitimate fears about invasion of privacy and possibility

of strangers accessing both their person details including home address. These concerns can be

particularly acute for households with children who may also have the additional concern about

access to unsuitable material.

In August 2000, the federal government launched Net Alert, an advisory service with a toll free

number and information web site, to help families manage Internet content access with greater

certainty. The site provides information on a range of issues including safe surfing, use of filters

to screen out unwanted sites, and how to protect children from online “stranger danger”

[DCITA, 2000].


CSIRO & QUT Page 16

Senator Alston at the Net Alert Launch stated:

“While there are some dangers in surfing the net, they should not outweigh the positives and prevent Australians embracing a medium with enormous potential to inform, educate and bring people together.” [DCITA, 2000]

4 TECHNOLOGY TRENDS

The range of software and hardware initiatives likely to impact business in ways that will then

impact transport is wide. They may be grouped into four broad categories as predominantly:

providing standardisation; making use easier or cheaper; improving security; offering

completely new type of services. We use the term predominantly, as clearly many initiatives fall

in multiple categories. For example, most standardisation initiatives make use cheaper. We

discuss the implications of these categories using example developments in each case.

4.1 Standardisation

Standards such as the Universal Description, Discovery and Integration [UDDI] will address

interoperability. The standard creates a platform-independent, open framework for describing

services, discovering businesses, and integrating business services using the Internet

[UDDI.org., 2000a]. It is worth noting that standardisation initiatives will need time to take

effect. In the short-term, lack of standardisation, whether between companies or between

countries, will continue to be a problem.

Figure 8: UDDI.

[Source: UDDI.org., 2000a]

• UDDI is the first cross-industry effort driven by platform and software providers, marketplace operators

• As e-business leaders, these technology and business pioneers are acting as the initial catalysts to quickly develop the UDDI standard.

• The UDDI standard takes advantage of WorldWide Web Consortium [W3C] and Internet Engineering Task Force [IETF] standards such as Extensible Markup Languare [XML], and HTTP and Domain Name System [DNS] protocols.

• Businesses of all sizes can benefit from UDDI, because the standard comprehensively addresses problems that limit the growth and synergies of B2B commerce and Web services.

• The long list of organizations participating in the UDDI project represents many industries and core competencies. As such, UDDI is not owned or led by any one company.

• In time, the UDDI project will be turned over to a standards organization with the continued commitment of the cross-industry design teams that initiated UDDI.


CSIRO & QUT Page 17

4.2 Ease of Use

XML: Extensible Markup Language [XML] is a universal language designed for data

interchange on the web [UDDI org., 2000b]. XML allows Internet developers to create

personalised tags, enabling the definition, transmission, validation, and interpretation of data

between applications and between organisations. The first version of Commerce Extensible

Markup Language [cXML] appeared in 1999. cXML is a documentary type definition [DTD]

based on XML tags that defines fields for specific documents, such as purchase orders, order

response, and other core e-business documents [Shanker, 1999].

As such languages become more “user friendly” and accessible to users without the need for

computer expertise, the field will open to more players, with the potential to cut out human

interfaces between firms. Moreover, since newer languages are easier to learn than earlier

languages and have such high functionality, third party businesses might set up to write

applications for SME’s. Previously provision for this market was not cost effective.

Bandwidth Innovations: The twin advantages of Internet connection speed and reach are

compromised when data transmission speeds are slow. The communications bandwidth is a

measure of the range of frequencies the signal occupies. It takes more bandwidth to download

an image per second than to download a page of text per second. Sound files, computer

programs, and videos require more bandwidth again.

Cable bandwidth: is usually shared between users, with each user allocated a proportional share

of the 10Mbps of the Australian digital cable [Telstra, 2000b]. Extra users with extra data needs

create congestion. More bandwidth is constructed by installing more cables, thus lowering the

amount of users to share bandwidth. In remote areas, it is expected to take some years for the

necessary infrastructure to support the use of the Internet via cable to become available. The

discussion paper of the “National Bandwidth Inquiry”, addressing bandwidth issues in Australia

was released on November the seventh, this year [NOIE, 2000e].

Asymmetric Digital Subscriber Line [ADSL]: is a modem technology new to Australia that

connects existing telephone lines with bandwidth to receive data up to 1.5 Mbps per user

[Telstra, 2000a]. In comparison to the traditional modem operating at a maximum of 57,600

bps [converting digital signals into analogue signals for transmission over telephone lines],

ADSL is a significant improvement. Hence, ADSL is positioned to play a crucial role for

Internet users in remote regions, who having had limited bandwidth access via traditional

modems, now have the option of using ADSL.


CSIRO & QUT Page 18

Wireless Application Protocol [WAP]: As the name implies this newer form of Internet

connection does not require any cable. However, signals still require bandwidth, for

transmission via radio frequencies. This means that there are upper limits to WAP use.

However, within these constraints, WAP is opening a new world of communications where the

device connecting to the Internet is likely to be a mobile phone or a small combination handheld

computer and telephone. In contrast to other areas of Internet, consumers, as well as businesses,

are leading in uptake of this technology. In particular Short Message Services [SMS] are

extremely popular. While short messages are more suited to say “lets meet at 2pm” than for

discussion of business strategy, wide familiarity with such technology should increase interest

in the higher end devices suitable for m-commerce.

M-commerce tools should be particularly useful for more mobile workforces, such as sales

representatives currently using their car as an office. They also allow data recorded by workers

“in the field” to be beamed immediately back to base rather than be downloaded later.

M Commerce Devices: Japan was the first country in the world experience rapid growth in the

mobile Internet market. Funk [2000] reviews appropriate contents/applications, service menus,

and business models for the mobile Internet based on the Japanese experience. Care needs to be

taken in translating results from a different culture and application on a different scale to

Australia. Funk [2000] notes there were 15 million mobile Internet subscribers in Japan in

August 2000 growing at 9% per month. However, he addresses some issues of particular

relevance such as the trade off between reach offered by mobile Internet and richness offered in

fixed-line will be affected by Java-based phones, faster data and PDA applications; packet

communication is required; the need for content and service providers to focus on “high reach

and low rich” applications, rather than try to replicate fixed line services. He finally suggests

that the customers for these devices may not come from the fixed-line market. The take up is by

young people in Japan.

Tracking Technologies: Scanning technologies have already impacted businesses, ranging from

carriers tracking containers, to factories tracking component parts, and to supermarket checkout

operators using point-of-sale scanners [Kinsey, 2000]. New wireless product identification

systems [Karkkäinen et al., 1999], which allow products or parts to be identified without

physical handling, have the potential to provide even greater advantages. Moreover, these

advantages could be realised quickly, just as the change to bar code tracking with hand held

devices was quickly implemented throughout the retail industry.


CSIRO & QUT Page 19

4.3 Security Devices and Approaches

Concern about security is one of the key impediments to e-business growth. Over a third of 400

European business leaders polled [with more than 25% from the UK], cited online security as a

problem holding them back [PwC, 2000a]. Alongside the institution arrangements discussed in

the previous section, technological solutions are being developed to address these issues.

Various security technologies are used to defend networks against attacks initiated from both

within and without an organisation. Current security methods, used wherever the Internet and

corporate networks intersect, include: Routers, network traffic-managing devices between sub-

networks and routes. Packet-filtering rules, based on security polices to permit or deny traffic.

Since these are not capable of understanding context or the data, Firewalls are needed to

establish controls with monitoring software to detect and thwart external attacks on the site.

Extensions beyond firewalls include Intrusion Detection Systems [IDSs] and Vunerability

Assessment Tools. The two alternative philosophies may be adopted with all such devices:

• Prohibit everything that is not expressly permitted; or

• Permit everything that is not expressly denied.

Those who operate their systems under spirit of co-operative computing may prefer the second

philosophy. Unfortunately, this philosophy does not work well in today's hostile computing

environments [Merkow, 2000].

Concerns with security have also prompted initiatives to replace passwords, which have been

used for security for centuries with safer alternatives. Biometric technology will replace the

password method for ensuring sensitive information is protected for unauthorised access.

Options include scanning the iris of the eye, voice pattern recognition or fingerprint recognition

[The Australian, 2000b].

4.4 New Types Of Services

E-agents: Intelligent agents are software applications that have a predefined knowledge base

and/or learning system about their user's goals and wishes and, through adaptive reasoning, use

this information to execute their user's request. The concept is not new and applications vary

from the simple to highly sophisticated, differing in terms of: agency, ability to function

autonomously, intelligence, reasoning ability and mobility. Sinmao [1999] suggest that e-agents

engaged in e-commerce must have the ability to travel from computer to computer, gathering

information until search parameters are exhausted.


CSIRO & QUT Page 20

E-agents have come into their own since users of the WWW need to sift unwieldy amounts of

information to find products, services, and even each other. Their advantage over mere search

engines is that they can act independently of the users adapting to the information they acquire.

Sample applications include:

Buyer agents: Deloitte Research has estimated online shoppers will routinely use intelligent

agents to e-shop by 2002. A variety of intelligent agents can be sent out by buyers to help

locate stores, brands, product or service categories, products and services, and desired prices to

comparison shop for best products [Deloitte, 1999].

Seller agents: can use intelligent agents to track demand and market share changes, engage in

competitive knowledge mining, and even learn through collaboration from buyer agents. This

allows mass application of personal service. They might also employ broker agents.

To really impact the market, e-agents need to be affordable and compatible across different

computer operating platforms. Methods for assessing site validity/ trustworthiness are needed.

Advances in artificial intelligence need to be incorporated to allow the agent to deal with

exceptions to normal procedures and resolve security issues of access.

Intelligent Devices: Another type of intelligent devices are technically innovative appliances,

designed for consumer based online household applications. These intelligent devices have

capabilities such as paying household accounts, transferring funds, online ordering, grocery

inventories, sending e-mail messages and broadcasting television programs. While devices like

Sunbeam’s bathroom scales, which interact with the fridge to compile suitable diet regimes

[Thalia, 2000], may attract media attention, one of the first online function of most devices will

be the ability to signal need for repairs. While some of these may be made to system software

online, others may result in service calls.

According to GE Appliances, recent research indicates that within the next decade, 98% of

household appliances will have computer-processing ability, and be remotely operable via

landline or mobile phone [Wolf, 2000].

Visualisation and Virtual Reality: Improvements in data visualisation already allow

prospective home buyers to “walk-though” the house for sale in the estate agents office, or

examine an antique vase for sale from all angles across the net. Significant improvements in

three-dimensional imaging are expected. New technology is even being trialed to deliver scents

to Internet user devices. Data requirements and speed currently inhibit the use of these


CSIRO & QUT Page 21

techniques to allow shoppers to walk though a virtual market rather than choose items from a

flat list. Within the next five years Internet shopping experiences may be transformed.

5 B2B SPECIFIC

The sophistication of B2B applications within Australian companies range from the simplest e-

mail usage to communicate with suppliers and then customers, to full integrated e-strategies

linking all areas of the business. Because B2B currently dominates the markets, many of the

developments have already been discussed in our consideration first of markets and then of

technology. The following are specific to B2B.

5.1 National/ Global Sourcing

E-procurement is set to boom. According to a survey commissioned by

PriceWaterhouseCoopers [PwC, 2000c], approximately 62% of all European companies expect

to be conducting as much as 30% of their spending with suppliers electronically by the end of

2001. The survey of business leaders in four European countries showed that only about 5% of

spending by companies is currently with online suppliers, however, the e-procurement market

was set to double by the end of 2001.

High volume low value items, such as office supplies, consume a lot of money in large

organisations. Horizontal Portals give SMEs access to national or in some cases even

international suppliers. At the same time when large organisations move to e-procurement, there

is a knock on effect throughout industry as suppliers all need to set e-business systems. For

example, the South Australian government is moving towards a total e-procurement system.

This will mean all current suppliers to government will need to be able to deal online [SA,

2000].

E-procurement extends the market for both buyers and sellers. This should result in general

goods news for buyers with cheaper prices and more choice. However, sellers will have both

the access to wider markets and more competition in their local markets.

5.2 Supply Chain Changes

Procurement is just one part of the supply chain that is changing with different patterns of

tailoring orders to specifically service customers, and new transportation scheduling and vehicle

tracking applications. E-gistics describes the new approach to supply chain management where

logistics is combined with communications technology. While there are numbers of articles


CSIRO & QUT Page 22

discussing aspects of Supply Chain Management [SCM], including discussion of benefits to

individual companies, there have been limited comprehensive studies done on the use of the

Internet in SCM. Lancioni et al., [2000], reports the results of a 1998 survey of companies in

the United States of America citing 16 areas of SCM improvement.

Placement of depots, warehouses and even back offices is being rethought. New warehouses are

more like freight transfer depots. There are reduced inventories thus less storage, but, more

orders, smaller order sizes and more customisation. That means sites with cheap land for large

warehouses are no longer required. Instead the smaller transfer depots can be sited to optimise

the supply chain. E-gistics application plan warehouse siting as well as delivery patterns based

on customer and vendor requirements.

5.3 Regional and Rural Industries

All businesses can derive advantage for access to up to date information of value. In regional

Australia, Internet information ranges from better and more detailed weather information,

though market prices to detailed technical advice. However, that advantage does not necessarily

result in extra shipments. Agricultural products are seasonal, and subject to world commodity

prices, as are mining products. Access to the market may provide particular advantages to some

types of industries and regional organisations, which are joining together with business

themselves to promote these. The largest industry in this group is tourism. Innovations in

promoting tourism are discussed in section 6 of this paper under B2C, as the Internet for the first

time lets small tourism operators or small towns, access potential customers across the country

or across the world.

Niche Businesses: Similarly, the Internet allows regional producers of products direct to

specific markets, to be found by their customers. These customers can range from people

wanting organic produce in areas relatively close to the supplier, to people wanting particularly

innovative equipment across the world.

5.4 SME’s Entering the Market

While large bricks and mortar companies have been the first to move from bricks to clicks more

small to medium enterprises can be expected to enter the market. This will be due to two factors

discussed previously:

Market forces: both from their competitors and from larger clients, such as government

organisations and big business moving to e-procurement; and


CSIRO & QUT Page 23

Technology Improvements: For example, XML languages allow data to be transferred between

applications both within firms and between firms, saving re-keying data. For example Glushko

et al., [1999] suggest that EDI systems are likely to be fully integrated with WWW based B2B

systems, using XML and other enhancements. Moreover, ease of use means these savings in

time and money will be available to SMEs, as well as large enterprises. In the past, XML played

the field when Application Service Providers [ASPs] hosted translation processes for companies

unable to bear individual XML costs.

6 B2C GOODS AND SITE SPECIFIC SERVICES

B2C e-business is divided into two sections. This section deals with transactions that require

either physical transfer of goods/services or delivery of site-specific services. That is the range

of transactions, which cannot be entirely transacted in virtual space, and will finally require

transport or travel at some stage, whether it is to attend an Olympic event or deliver a bag of

groceries.

For many of these, the issues are more efficient delivery instead of collection and likelihood of

induced travel and extra deliveries. Additionally, in contrast to B2B transactions, there is still

considerable dispute about the likely rate of take up of such services. NOIE [2000c] reported

that in 1999 retail Internet sales were 0.4% of the total retail sales in Australia.

6.1 Shopping: Staples and Discretionary Items

Australian Grocers are entering the B2C arena following their earlier B2B initiatives. This is an

area, which seems to spring to mind when e-commerce and transport are mentioned together,

and the opportunities for efficient delivery patterns to replace individual supermarket trips. It is

still too early to measure the impact of such services, since the major retailers services have as

yet only been established with groceries in parts of Melbourne and Sydney. However, it is

worth noting that even staple items may attract “window” shoppers, checking variety and price.

Current services already face transport logistics problems in suiting deliveries to times which

suit the customer but still allow efficient deliveries.

The same delivery issues apply to discretionary goods, where there is less opportunity for

multiple deliveries to adjacent locations. The on-going viability of the e-business to fulfil

customer orders for discretionary goods, while still making a profit, depends upon whether:

• The goods can be transported cheaply in relation to their price and some delay is accepted

[eg: books from Amazon.com Incorporated, 2000];


CSIRO & QUT Page 24

• The goods are sufficiently expensive that relatively high delivery charges can be added; and

• The goods can be sent from an affiliate near the customer [eg: Fleurop-Interflora, 2000].

Except in the last case, there is no longer any need for a local supplier with associated threats to

local business. The full impacts depend whether the entire market grows or shoppers simply

move purchases to the Internet. While there is some evidence for market growth, this may be

due lack of comparable goods at the present moment.

Figure 9: Woolworths Online at http://www.woolworths.com.au/.

[Source: Woolworths , 2000]

6.2 Travel and Tourism

Tourism and Travel services are especially effected by the increased speed and reach of the

Internet. Unlike physical goods, these services have no “second chance of sale”. Suppliers

have long practised yield management, offering discounts to avoid empty rooms or seats.

Airlines have developed sophisticated booking and allocation systems, but up till recently they,

rather than their customers, were the main beneficiaries. Instant access via Internet connections

now allow clients to benefit from these systems, either by personally seeking best offers or

using intermediary services set up to do so on their behalf.

Bookings made online then provide transaction cost savings, which may be passed on to the

customer. The new entrants into the Australian Airline market, Virgin Blue [Virgin Blue, 2000]

and Impulse airlines [Open Skies, 2000], are both using Internet transaction savings to offer

lower fares. This in turn may attract both more travel by regular air travellers and new travellers

into the market. This is likely to apply for both business travellers who make up the bulk of the

current market and leisure travellers.


CSIRO & QUT Page 25

Tourism should be boosted by lower cost air trip opportunities, but the reach of the Internet may

offer even greater potential for increase in tourism. For the first time, small individual suppliers

or regional tourism associations are able to contact potential tourists directly. While small

hotels in regional areas boast of letters from happy international tourists who found them

through “home -made” WWW sites, commercial intermediaries have swiftly moved in to create

everything from the WWW equivalent to holiday guidebooks to complete search services.

While at first these were new dot.coms, the established brick and mortar travel agencies have

now moved into the field.

It should be noted that applications can still lag behind intent. A report produced by Anite

Travel Systems describes research conducted among 36 of the biggest tour operators in the UK

in September 1999 [Anite Travel Systems, 2000]. Asked to rank the obstacles to e-commerce,

tour operators put “technical barriers” top of the list, followed by cost, reliance on existing

channels, lack of knowledge, consumer resistance, and lack of sponsors. The verdicts on the

importance of systems integration and transaction-processing capability were virtually

unanimous, with 86% identifying systems integration as a major consideration in the design of

e-commerce solutions. However, most full-service e-commerce systems capable of handling

real-time reservations and end-to- end transactions are at the pre-planning stage. One reason is

that the skills required are an order of magnitude higher than for a simple marketing-oriented

WWW site. These obstacles are yet to be overcome.

In-bound tourism is currently Australia’s most valuable export industry, at 13.7%, or around

$A13.9 billion in 1996 and has potential for growth [Access Economics, 1997]. Extra

international access beyond the resources of conventional advertising channels will certainly

increase opportunities to attract travellers. Web based services also allow companies to better

cater to niche markets and special interests such as adventure tourism or eco-tourism. This may

mean the total market is expanded and more importantly dispersed to regional destinations.

Currently, a large number of international visitors do not travel beyond Sydney.

6.3 Services: Going out and Coming in

Internet Booking services are now available for people wanting to:

• Buy tickets to sporting events, concerts, film and theatre. Tickets to events throughout

Australia can be purchased and paid for on Ticketek’s Internet site [Ticketek Pty. Ltd.,

2000].


CSIRO & QUT Page 26

• Book at restaurants on sites such as The Restaurant Guide, with options to select from

restaurants located throughout Australia. The site supplies additional information such as

wheelchair access, credit card acceptance, smoking and non-smoking availability and

outdoor eating areas [ITC, 2000].

• Call in services, from meals to plumbers and baby sitters.

In most cases these Internet services replace telephone services. Therefore, they may not lead to

extra business, just cheaper or more efficient handling of business.

7 B2C VIRTUAL SERVICES

The B2C trends of interest are the indirect effects on transport: substitutions versus additional

use, any related deliveries or travel and possibly changes in time use, meaning less travel for

other purposes.

While all e-business is market segment dependent, these areas are likely to be particularly so.

While some areas, such as telephone banking, are becoming well established, others are among

the most “futuristic” changes and thus it is difficult to assess likely impacts. This difficulty is

exacerbated because the majority of information on new directions comes from people

promoting initiatives. Thus this section will concentrate particularly on the sorts of expected

changes that will impact on transport.

7.1 Entertainment /Infotainment

Entertainment services provided by the net cover a very wide scope such as:

• Access to “hobby” information, for example, there are large numbers of sites to trace

genealogy such as “The Genealogy Home Page” which has over 400 links to libraries,

newsgroups, maps, software, events, mail lists, genealogy societies, resources and online

information [Wood, 2000].

• Access to online “communities” of interest ranging from local gardeners to international

chat rooms, for example, “The Home Vine” allows entrance to chat rooms with themes such

as home renovation, cooking and gardening [CyberSites Inc., 2000].

• Access to sports, news, and music from around the globe, for example “ABC News Online”

has links to global, regional and local news, sports results, political and art features [ABC,

2000].


CSIRO & QUT Page 27

• Participation in games ranging from role-playing to Internet gambling.

• Adult services of various kinds.

An issue in all these cases is time and money taken away from other pursuits. Although from

time to time, there are reports of net “addiction” leading to all day spent at a keyboard, this is

likely to be a minority behaviour. Additionally, in some cases wide spread changes of this kind

could be reflected in less need for transport of goods or travel for services.

An example of this is with online music distribution where music can be downloaded from the

Internet and payment made via credit card. Although this distribution will not entirely replace

the music store and need for transportation, the services offered are competitive, with free

software, music samples and information for the consumer, for example, MP3.com [2000].

7.2 Online Banking / Share Trading/ Bill Payment

Banking online is becoming an accepted norm by society, to access account balances and

reconciliations, transfer funds and pay accounts. Recently, banking institutions have been

expanding their online services to encompass a broader range of services. For example, ANZ

offers online investing, on their “ANZ E*TRADE” site, where investors can buy and sell shares

listed on the Australian Stock Exchange, 24 hours a day [ANZ, 2000c]. Share payments are

transferred from linked accounts and when the market opens, orders are executed and confirmed

electronically. Online investors can log into personalised “watchlists” to check balances,

transactions, holdings, stock prices and market information.

Figure 10: Banking Online at htttp://www.anz.com.au.

[Source: ANZ, 2000b]

Apart from those offered by the banks there are numbers of other share trading sites both locally

and internationally.


CSIRO & QUT Page 28

There are also increasing options for bill payment to both businesses and government. The

advantage in these cases as with online banking is saving in transaction costs for organisations.

When considering potential trip savings via the virtual cash economy, it is important to consider

the large inroads that credit cards, and debit cards at point of sales has made to retailers

requirement to transport cash.

7.3 Health and Education

Health has been predicted to be one of the faster growing areas of Internet services. At the same

time, it is hoped that Internet education services such as “TAFE, Queensland Online” [TAFE,

2000] will open up wider markets, both nationally and internationally, with considerable

economic impacts. However, in terms of the purpose of this review to consider developments

for assessment types, it is unlikely that advances in either area will have significant implications

for trip making in the next five to ten years.

Health: While robot surgery has been performed at a distance, in the short to medium term

more likely developments are the increasing use of the current technological links between city

teaching hospitals and General Practitioners [GPs] in remote communities. These virtual

methods provide better advice rather than reduce consumer needs for travel to specialists. Even

in remote areas and regions, services are likely to be via a known GP. There should much less

incentive for self-diagnosis via the Internet in Australia, in comparison to America, where

medicine is expensive and a large proportion of the population has no medical insurance.

More significant impacts of e-heath can be expected within the business applications of

streamlining practices and control of patient data. In Australia, the General Practice Computing

Group [GPCG] has just released a draft “Strategic Framework for IM and IT in General

Practice 2001-2006” [GPCG, 2000]. However, in these cases improved business practices

should improve patient outcomes and thus health and disease rather than increase demand.

Education: Current Development in education falls into two groups. Firstly, electronic services

are used to improve the quality of education for students who attend a “campus” with virtual

libraries, information resources and course material online. Secondly, electronic services are

utilised for distance based learning with course material available over the Internet; and student-

lecturer interaction through video conferencing and e-mail.

Distance education is not only targeting traditionally remote students, but also new students in

closer proximity, offering options of “learning at ones own pace”, rather than regimented time

frames. It is expected that this area will grow, with the majority of educational institutions


CSIRO & QUT Page 29

currently introducing more “Virtual Campus Strategies” and “Flexible Lecture Options” to

attract a larger student base for their services. If the global information revolution does require

lifelong learning, the numbers of students requiring both types of services will grow.

8 SIGNIFICANCE OF E-BUSINESS TRENDS

An NOIE commissioned study “E-Commerce Beyond 2000” [NOIE, 2000a] sought to forecast

the economic impacts of e-commerce to the year 2016 using the Monash Model, a General

Computable Equilibrium model of the Australian economy. The model considered specific

impacts including, process transformation, process efficiencies, new products and services,

industry re-structure and change. Specific macro economic impacts of e-commerce, over the

next decade, identified included:

• an increase in national output by 2.7%;

• real investment up 4%;

• consumption up 3%;

• real wages up 3.5%;

• aggregate employment up 0.5%; and

• real exchange rate up 2%.

However, they note there will be significant sectoral variations with tourism/entertainment

peaking 5% higher and a net flow-on to transport, as a consequence of its critical role in

underpinning economic activity in Australia.

It is likely that the NOIE study provides a lower bound of the impact of e-commerce since

current techniques for measuring the state of the economy are geared to measures of output.

This was appropriate for manufacturing economies, old economies, where success stemmed

from producing more products at lower costs. However, information based economies, new

economies, may aim to produce products better suited to customers. Success then is less easily

measured in terms of units produced or cost per unit. Additionally, when all aspects of e-

business are added, impacts will be even larger. Although some of these will be productivity

gains others will be improved service to clients.

In later papers we will attempt to quantify the overall impacts of trends on transport. Figure 11

is designed to assist that assessment. In it we list the issues and developments discussed here

which are likely to have significant impacts either immediately, 2001-2005, or in the medium

term 2006-2010. We note whether those impacts will be expected to speed or slow e-business

growth.


CSIRO & QUT Page 30

Figure 11: Estimated Significance of Developments for E-business.

2001-2005 2006-2010

E-business Readiness

Shortage of Management Skills

Regulatory & Institutional Structure

Security

Market

Entry of Old Economy Companies

E-Business Intermediaries

Portals Industry

Portals Consumer

Regions Online

Technology

Standardisation

Band Width

Product Tracking

E-Agents

B2B

E-Procurement

Supply Chain Changes

SMEs Entering Market

B2C

Shopping

Travel/Tourism

Virtual Services


CSIRO & QUT Page 31

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GLOSSARY

ABS – Australian Bureau of Statistics.

ADSL – Asymmetric Digital Subscriber Line.

API - Application Programming Interface; a language/message format used by an application program to communicate with the operating system.

ASP – Application Service Providers.

B2B – Business-to-Business; online transactions conducted between companies.

B2C - Business-to-Consumer; online transactions, conducted between a company and individual consumer.

Bandwidth - The quantity of data transmitted over a network measured in bits per second.

Bar code - A series of printed bars representing alphanumeric characters, that can be ‘read’ by computer systems.

bps – bits per second.

BESTS – Business Environment Study of Trusted Services.

Broadband - Any transmission system that combines multiple signals on one single circuit such as a cable that supports video, voice and text concurrently.

Browser - Program such as Explorer or Netscape that locate and display HTML documents.

CSIRO – Commonwealth Scientific Institute and Research Organisation.

cXML – Commerce Extensible Markup Language; XML designed for e-commerce.

Cyberspace – The term electronic forms of communication, as an environment that users enter and experience, such as over the Internet.

DNS – Domain Name System.

DTD – Document Type Definition.

e-Business – All business transactions conducted on the Internet.

e-Commerce – All transactions involved with the trade of goods and/or services, and payment conducted over the Internet.

e-Health – this term encompasses telehealth and telemedicine – is the use of the use of electronic digital data transmissions for administrative, clinical and educational purposes, locally and regionally.

e-jargon – terminology used in the world of electronic activities.


CSIRO & QUT Page 37

e-language – see e-jargon.

e-mail – electronic mail that permits computer users to exchange messages, images and attached files on the Internet.

Encryption - Disguising a message to conceal its meaning.

e-procurement – The purchasing of goods online.

Extranet – The Internet becomes an Extranet when a company open its internal networks to authorised users. Authorised distributors and suppliers can connect to the company’s network over the Internet, to view data made available by the company.

Firewall - Computer system, between the Internet and a private network that prevent unauthorised users from accessing the private network.

HTML - Hypertext Markup Language; document language used for creating WWW pages.

Hypertext - Links to other sections of the same document or to other documents or sites on the WWW.

IDS - Intrusion Detection Systems.

IETF - Internet Engineering Task Force.

ISP - Internet Service Provider; provides connection to the Internet.

IT – Information Technology.

ITS - Intelligent Transport System.

IVR – Interactive Voice Response.

Java - Programming language often used on web sites.

LAN – Local Area Network – a network of computers installed and networked within a physical area.

Marketplace - Online trading environment that brings buyers and sellers together.

NOIE – National Office for the Information Economy.

NTS – National Transport Secretariat.

Online – connected and accessing the WWW.

Portal – the term to describe a web site that is the initial place people see when using the World Wide Web. A portal offers access to a range of web sites, search engine/s and often offers services such as e-mail to entice patronage.

QUT – Queensland University of Technology.

SCM – Supply Chain Management.


CSIRO & QUT Page 38

Server - Computer or software program that provides services to clients over a network on demand.

SME – Small and Medium Enterprises.

SMTP - Simple Mail Transfer Protocol; the worldwide electronic messaging [ASCII character] standard that makes mail possible between the Internet and other networks.

STS – Short Test Service.

Telehealth – health care at a distance.

Telemedicine – delivery of health care in which GP’s examine patients through telecommunications technology.

UDDI – Universal Description, Discovery and Integration.

URL - Uniform Resource Locator; a standardised method of identifying resources or documents on the Internet.

W3C - WorldWide Web Consortium.

WAN - A communications network covering a large geographic area, such as a country.

WAP – Wireless Application Protocol; connection to the Internet without physical link through devices such as a mobile phone.

Web browser – a program designed for navigating the World Wide Web.

Web page - Text and images sent to a web browser by a web server, which can be viewed.

Web server - Server supporting one or more web sites that supplies web pages to web browsers on demand.

Website - One or more interlinked web pages belonging to a business and linked to a single homepage.

WWW - World Wide Web; a set of Internet servers that provide hypertext services to users with WWW browsers.

XML - Extensible Markup Language; a metalanguage containing rules for construction of other markup languages. XML users can make up customised tags to expand the quantity and variety of information provided about the data held in a document.

We would like to thank the following for their permission to use images of their Internet pages:• ANZ.com – http://www.anz.com.au.• Globalnet Xchange [GNX] – http://www.globalnetxchange.com/US/home.jsp• Woolworths Online – http://www.woolworths.com.au

Documents

E-BUSINESS TRENDSeprints.qut.edu.au/2766/1/2766.pdf · E-BUSINESS TRENDS by Nariida Smith CSIRO ... the buying and selling of goods and services on the net - ... We therefore aim