Business Information Systems

Transcription

1 Business Information Systems Session 06 E- Commerce

2 E- Commerce Chapter 08

3 Principles and Learning Objec7ves Electronic commerce and mobile commerce are evolving, providing new ways of conduc<ng business that present both opportuni<es for improvement and poten<al problems Describe the current status of various forms of e- commerce, including B2B, B2C, and C2C Outline a mul<stage purchasing model that describes how e- commerce works Define m- commerce and iden<fy some of its unique challenges 3

4 Principles and Learning Objec7ves (con7nued) E- commerce and m- commerce can be used in many innova<ve ways to improve the opera<ons of an organiza<on Iden<fy several e- commerce and m- commerce applica<ons Iden<fy several advantages associated with the use of e- commerce and m- commerce 4

5 Principles and Learning Objec7ves (con7nued) Although e- commerce and m- commerce offer many advantages, users must be aware of and protect themselves from many threats associated with this technology Iden<fy the major issues that represent significant threats to the con<nued growth of e- commerce and m- commerce Organiza<ons must define and execute a strategy to be successful in e- commerce Outline the key components of a successful e- commerce strategy 5

6 Principles and Learning Objec7ves (con7nued) E- commerce and m- commerce require the careful planning and integra<on of a number of technology infrastructure components Iden<fy the key components of technology infrastructure that must be in place for e- commerce and m- commerce to work Discuss the key features of the electronic payment systems needed to support e- commerce 6

7 Why Learn About Electronic and Mobile Commerce? Most organiza<ons have an Internet presence Sales/marke<ng manager involved with e- commerce Customer service employees help develop the Web site Human resource or public rela<ons manger may provide Web content for employees and investors Must learn about e- commerce and m- commerce 7

8 An Introduc7on to Electronic Commerce Electronic commerce: conduc<ng business ac<vi<es electronically over computer networks Types of business ac<vi<es that are strong candidates for conversion to e- commerce Paper based Time- consuming Inconvenient for customers 8

9 Business- to- Business (B2B) E- Commerce Subset of e- commerce All the par<cipants are organiza<ons Useful tool for connec<ng business partners in a virtual supply chain to cut resupply <mes and reduce costs 9

10 Business- to- Consumer (B2C) E- Commerce Form of e- commerce in which customers deal directly with an organiza<on and avoid intermediaries Squeezes costs and inefficiencies out of supply chain Can lead to higher profits Can lead to lower prices for consumers E- commerce via the Internet Many goods and services are cheaper online The Internet allows consumers to easily compare prices, features, and value 10

11 Consumer- to- Consumer (C2C) E- Commerce Subset of e- commerce that involves consumers selling directly to other consumers Example: ebay Customers buy and sell items directly to each other through the site 181 million users buy and sell items valued at more than $44 billion Other popular online auc<on Web sites: Craigslist, ubid, Yahoo! Auc<ons, Onsale, and WeBidz 11

12 egovernment Use of informa<on and communica<ons technology to simplify the sharing of informa<on, speed formerly paper- based processes, and improve the rela<onship between ci<zen and government Forms of egovernment Government- to- consumer (G2C) Government- to- business (G2B) Government- to- government (G2G) 12

13 Mul7stage Model for E- commerce Figure 8.1: Multistage Model for E-Commerce (B2B and B2C) 13

14 Mul7stage Model for E- commerce (con7nued) Figure 8.2: Product and Information Flow for HP Printers Ordered over the Web 14

15 E- Commerce Challenges Defining an effec<ve e- commerce model and strategy Community, content, and commerce Changing distribu<on systems and work processes to manage shipments of individual units directly to consumers B2C systems must be able to handle split- case distribu<on Integra<ng Web- based order processing with tradi<onal systems 15

16 E- Commerce Challenges (con7nued) Figure 8.3: Three Basic Components of a Successful E-Commerce Model 16

17 E- Commerce Challenges (con7nued) Figure 8.4: Web-Based Order Processing Must Be Linked to Traditional Back-End Systems 17

18 An Introduc7on to Mobile Commerce Mobile commerce (m- commerce) relies on the use of wireless devices, such as personal digital assistants, cell phones, and smart phones, to place orders and conduct business Handset manufacturers are working with communica<ons carriers to develop appropriate wireless devices, related technology, and services Content providers and mobile service providers are working together more closely than ever 18

19 Mobile Commerce in Perspec7ve Only 12 to 14 percent of the world s 1.8 billion mobile phone users have ever used the Web from their phones Internet Corpora<on for Assigned Names and Numbers (ICANN) created a.mobi domain to help aaract mobile users to the Web Market for m- commerce in North America is maturing much later than in Western Europe and Japan 19

20 Technology Needed for Mobile Commerce Improved interface between the wireless device and its user Improved network speed Security Encryp<on, digital cer<ficates Web applica<ons that are accessible for handheld users 20

21 Technology Needed for Mobile Commerce (con7nued) Wireless applica7on protocol (WAP): standard set of specifica<ons for Internet applica<ons that run on handheld, wireless devices Effec<vely serves as a Web browser for such devices Uses the Wireless Markup Language (WML), which is designed for effec<vely displaying informa<on on small devices 21

22 Electronic and Mobile Commerce Applica7ons Many B2B, B2C, C2C, and m- commerce applica<ons are being used in: Retail and wholesale Manufacturing Marke<ng Investment and finance Auc<on arenas 22

23 Retail and Wholesale Electronic retailing (e- tailing): direct sale from business to consumer through electronic storefronts Electronic storefronts are typically designed around an electronic catalog and shopping cart model Cybermall: single Web site that offers many products and services at one Internet loca<on Manufacturing, repair, and opera<ons (MRO) goods and services 23

24 Manufacturing To raise profitability and improve customer service, many manufacturers move their supply chain opera<ons onto the Internet Electronic exchange: electronic forum where manufacturers, suppliers, and compe<tors buy and sell goods, trade market informa<on, and run back- office opera<ons 24

25 Manufacturing (con7nued) Figure 8.5: Model of an Electronic Exchange 25

26 Marke7ng Market segmenta7on: iden<fica<on of specific markets to target them with adver<sing messages Technology- enabled rela7onship management: use of detailed informa<on about a customer s behavior, preferences, needs, and buying paaerns to customize the en<re rela<onship with that customer 26

27 Investment and Finance Online stock trading Online tools for doing research and analysis Online banking Customers can check account balances, transfer money among accounts, pay bills, etc. Electronic bill presentment 27

28 Auc7ons ebay Has become synonymous with online auc<ons Customer complaints: increased fees and problems with unscrupulous buyers Constantly trying to expand and improve its services: Skype, Verisign Hundreds of other online auc<on sites Example: Priceline.com 28

29 Anywhere, Any7me Applica7ons of Mobile Commerce M- commerce devices are ideal for accessing personal informa<on and receiving targeted messages for a par<cular consumer Through m- commerce, companies can establish one- to- one marke<ng rela<onships with individual consumers any<me and anywhere The most successful m- commerce applica<ons suit local condi<ons and people s habits and preferences Examples: banking, stock trading, informa<on services, retail, adver<sements 29

30 Advantages of Electronic and Mobile Commerce Global reach: helps reduce gap between rich and poor countries Reduces costs: increases speed and accuracy Speeds the flow of goods and informa<on Increases accuracy: eliminates human data- entry error Improves customer service: informa<on about delivery status and ability to meet customer demand 30

31 Threats to Electronic and Mobile Commerce Businesses must ensure that e- commerce and m- commerce transac<ons are safe and consumers are protected Number of threats to the con<nued growth of e- commerce and m- commerce Security, theg of intellectual property, fraud, invasion of privacy, lack of Internet access, return on investment, legal jurisdic<on, taxa<on 31

32 Security Methods to increase security Payment Card Industry security standard Address Verifica<on System Card Verifica<on Number technique Visa s Advanced Authoriza<on process Federal Financial Ins<tu<ons Examina<on Council s Authen<ca<on in an Internet Banking Environment guidelines Biometric technology 32

33 TheR of Intellectual Property Intellectual property: works of the mind that are dis<nct somehow and are owned or created by a single en<ty For example: books, films, music, processes, and sogware Copyright law protects authored works such as books, film, images, music, and sogware from unauthorized copying Patents can protect sogware, business processes, formulae, compounds, and inven<ons 33

34 TheR of Intellectual Property (con7nued) Trade secrets Digital Rights Management (DRM): use of any of several technologies to enforce policies for controlling access to digital media 34

35 Fraud Phishing: sending bogus messages purportedly from a legi<mate ins<tu<on to pry personal informa<on from customers by convincing them to go to a spoof Web site Click fraud: arises in a pay- per- click online adver<sing environment when addi<onal clicks are generated beyond those that come from actual, legi<mate users Online auc<on fraud 35

36 Invasion of Consumer Privacy Online profiling: prac<ce of Web adver<sers recording online behavior to produce targeted adver<sing Clickstream data: data gathered based on the Web sites you visit and the items you click on 36

37 Lack of Internet Access Digital divide: difference between people who do and people who don t have access or capability to use high- quality, modern informa<on and communica<ons technology to improve their standard of living Exists between: More and less developed countries Economic classes The educated and uneducated Those who live in ci<es and those who live in rural areas 37

38 Return on Investment The investment required for a large firm to establish and operate a B2B or B2C Web site can be in the millions of dollars Common problem with determining return on investment: difficult to forecast project costs and benefits 38

39 Legal Jurisdic7on When conduc<ng e- commerce, sales must not violate county, state, or country legal jurisdic<ons Examples Selling stun guns and similar devices Selling cigareaes or alcohol to underage customers 39

40 Strategies for Successful E- Commerce Companies must develop effec<ve Web sites that include the following characteris<cs: Easy to use Accomplish the goals of the company Safe and secure Affordable to set up and maintain 40

41 Defining the Web Site Func7ons Decide which tasks the site must accomplish Create an aarac<ve presence for the company Meet the needs of its visitors Examples: obtaining informa<on about the organiza<on and its products, buying products or services, gejng advice, registering complaints Redefining your site s basic business model to capture new business opportuni<es 41

42 Establishing a Web Site Web site hos<ng companies Allow you to set up a Web page and conduct e- commerce within a maaer of days Liale up- front cost Storefront broker: companies that act as middlemen between your Web site and online merchants that have the products and retail exper<se 42

43 Building Traffic to Your Web Site Obtain and register a domain name Make your site search- engine- friendly Meta tag: special HTML tag that contains keywords represen<ng your site s content Keywords are used by search engines to build indexes poin<ng to your Web site Web site traffic data analysis sogware Adap<ng Web site design for global consumers 43

44 Maintaining and Improving Your Web Site Be alert to new trends and developments in e- commerce Be prepared to take advantage of new opportuni<es Personaliza7on: tailoring Web pages to specifically target individual consumers Explicit: captures user- provided informa<on Implicit: captures data from customer Web sessions 44

45 Technology Infrastructure Required To Support E- commerce and M- commerce Successful implementa<on of e- business requires significant changes to exis<ng business processes and substan<al investment in IS technology Poor Web site performance drives consumers to abandon some e- commerce sites in favor of those with beaer, more reliable performance 45

46 Technology Infrastructure Required To Support E- commerce and M- commerce (con7nued) Figure 8.6: Key Technology Infrastructure Components 46

47 Hardware Storage capacity and compu<ng power required of the Web server depends on: Sogware that will run on the server Volume of e- commerce transac<ons E- commerce solu<ons should be designed to be highly scalable Web site hos<ng: third- party Web service provider 47

48 Web Server SoRware Security and iden<fica<on Access controls Encryp<on Retrieving and sending Web pages Web site tracking Web log file Web site development HTML/visual Web page editor, sogware development kits 48

49 Web Server SoRware (con7nued) Web page construc<on Web editors and extensions Sta<c Web page: contains same informa<on Dynamic Web page: responds to a specific Web user s request Examples of Web server sogware packages: Apache HTTP Server, Microsog Internet Informa<on Server 49

50 E- Commerce SoRware E- commerce sogware tools Catalog management: provides standard format Product configura<on: build product online to meet user needs Shopping cart facili<es Transac<on processing Web traffic data analysis Web services: sogware modules suppor<ng specific business processes that users can interact with over a network as needed 50

51 E- Commerce SoRware (con7nued) Figure 8.7: Electronic Shopping Cart 51

52 Electronic Payment Systems Digital cer7ficate: aaachment to an e- mail message or data embedded in a Web page that verifies the iden<ty of a sender or a Web site Cer7ficate authority (CA): trusted third party that issues digital cer<ficates Secure Sockets Layer (SSL): communica<ons protocol used to secure sensi<ve data Electronic cash: amount of money that is computerized, stored, and used as cash for e- commerce transac<ons 52

53 Electronic Payment Systems (con7nued) Credit card Charge card Debit card Smart card: a credit card sized device with an embedded microchip to provide electronic memory and processing capability 53