Chapter 3 - Repository UNIKOM

  Electronic Commerce Electronic Commerce

  

  Electronic commerce is the use of Electronic commerce is the use of computers to facilitate the firm’s operations computers to facilitate the firm’s operations

• – internal (finance, marketing,

  internal (finance, marketing, manufacturing, ...) manufacturing, ...)

• – external (customers, suppliers,

  external (customers, suppliers, government, ...) government, ...) Environmental Responsibilities Environmental Responsibilities of Functional Areas of Functional Areas

   Human Information

  Finance Resources Services Manufacturing Marketing Customers

  X X

  Suppliers

  X X

  Stockholders

  X Labor Unions

  X X

  Government

  X X

  X X

  X Financial Community

  X Global Community Electronic Commerce Benefits Electronic Commerce Benefits

   Improved service, especially to

  Improved service, especially to customers customers

   Improved relationships to suppliers and

  Improved relationships to suppliers and the financial community the financial community

   Increased return on stockholder and

  Increased return on stockholder and owner investments owner investments

  Electronic Commerce Electronic Commerce

  Constraints Constraints

   High costs

  High costs 

  Security concerns Security concerns

   Immature or unavailable software

  Immature or unavailable software

  New Electronic Commerce Era New Electronic Commerce Era

  

Instead of specialized software, firms

  

Instead of specialized software, firms

are designing systems to use Internet

are designing systems to use Internet

  Browsers Browsers

   Making a common interface for

  Making a common interface for customers and electronic commerce customers and electronic commerce partners partners

  

Selection of Electronic Commerce

Selection of Electronic Commerce

Strategy, Methodology, and Technology

  

Strategy, Methodology, and Technology

  Business Intelligence

  Competitive Advantage

  Strategic Business Plan Enabling strategy Interorganiza- tional Electronic data interchange

  Enabling methodology System life cycle Business process redesign

  Enabling technology Direct connectivity Value-added networks The Internet Business Intelligence (BI) Business Intelligence (BI)

   Evolved from simply gathering data

  Evolved from simply gathering data about competitors to data gathering about competitors to data gathering about all environmental elements about all environmental elements Data

  5

  4

  3

  2

  1 _{Collect Analyze Evaluate Store Intelligence Disseminate data data data intelligence} intelligence _Data

  Intelligence External Databases External Databases

  

  Important commercial databases that Important commercial databases that provide information on virtually any subject provide information on virtually any subject

• – LEXIS-NEXIS, DIALOG, DOWJONES.COM
• – Over 1,000 data service sites listed by

  Over 1,000 data service sites listed by YAHOO.COM YAHOO.COM

  

  Less expensive to use database services Less expensive to use database services than to perform research than to perform research

  Search Engines Search Engines

  

  Special computer programs that ask users Special computer programs that ask users for a word or group of words to be found at for a word or group of words to be found at

  Internet sites Internet sites

  

  Yahoo, Excite, AltaVista, HotBot, Lycos, Yahoo, Excite, AltaVista, HotBot, Lycos, and Webcrawler are examples and Webcrawler are examples

  

  Government databases Government databases

  Extranets Extranets

  

  Allow sharing of sensitive computer-based Allow sharing of sensitive computer-based information using Internet technology information using Internet technology

  

  Limited to trusted suppliers and large Limited to trusted suppliers and large customers customers

  

  Security and privacy issues Security and privacy issues

• – Firewalls

  Firewalls Interorganizational System (IOS) Interorganizational System (IOS)

   These link two or more firms so that they

  These link two or more firms so that they function as a single function as a single system system to accomplish a to accomplish a common goal common goal

   Generate internal efficiency in addition to

  Generate internal efficiency in addition to interorganizational efficiency interorganizational efficiency

   Provides customers with unique product

  Provides customers with unique product features, reduced search-related costs, and features, reduced search-related costs, and raises the customer’s switching costs raises the customer’s switching costs Electronic Data Interchange (EDI) Electronic Data Interchange (EDI)

   Consists of direct computer-to-computer

  Consists of direct computer-to-computer transmissions among multiple firms of data in a transmissions among multiple firms of data in a machine-readable, structured format

  _ machine-readable, structured format Typical linkages

  Typical linkages

• – Supply side

  Supply side

• – Customer side

  Customer side

• – Transaction set

  Transaction set _ Vendor stock replenishment (VSR)

  Vendor stock replenishment (VSR) _ Electronic Funds Transfer (EFT)

  Electronic Funds Transfer (EFT) Electronic Data Interchange (EDI) Electronic Data Interchange (EDI)

  Adheres to Standard Formats Adheres to Standard Formats

  Request for a pric e quot e quote

  Price

Purchase order

  Suppliers The Firm

  Acknowled ge P.O. rec eipt Invoice

  3-15 Selected EDI Transaction Sets Selected EDI Transaction Sets and Sample Invoice Data _{104 Air Shipment Information 130 Student Educational Record (Transcript)} and Sample Invoice Data _{311 Canadian Customs Information 810 Invoice} 152 Statistical Government Information 300 (Booking Request) (Ocean) _{Name Marking, Packaging, Loading} Address Information _{Industry Code Tax Information Currency} Quantity _{Terms of Sale / Deferred Terms of Sale Item Physical Details} Pricing Information _{Invoice Shipment Summary Product / Item Description} Carrier Detail

Mapping Software Translates Data to Mapping Software Translates Data to and from Standard Formats and from Standard Formats

  Sending firm’s computer Application software Mapping software

  Standard EDI format Receiving firm’s computer Application software Mapping software Degree of EDI Implementation Degree of EDI Implementation _

  Level-one users Level-one users

• – One or two transmission sets sent to limited trading

  One or two transmission sets sent to limited trading partners

  _ partners Level-two users

  Level-two users

• – Many transaction sets transmitted to large number of

  Many transaction sets transmitted to large number of trading partners

  _ trading partners Level-three users

  Level-three users

• – Many transaction sets transmitted to large number of

  Many transaction sets transmitted to large number of trading partners and firm’s computer applications are trading partners and firm’s computer applications are tailored to EDI approach tailored to EDI approach

  Adoption Influences Adoption Influences

  

  Competitive pressure, Competitive pressure,

  this is reactive this is reactive

  

  Exercised power, Exercised power,

  this is proactive this is proactive

  

  Internal need, Internal need,

  this is proactive this is proactive

  

  Top management support, Top management support,

  this is both this is both proactive and reactive proactive and reactive Internal and Environmental Internal and Environmental

  Influences on EDI Adoption Influences on EDI Adoption

  Environmental Influences Pressure Exercised Power

  

Internal Influences

Internal

Need

Top

  

Management

Support

Competitors

  Trading Partners EDI Benefits EDI Benefits

   Direct

  Direct

• – Reduced errors

  Reduced errors

• – Reduced costs

  Reduced costs

• – Increased operational efficiency

  Increased operational efficiency 

  Indirect Indirect

• – Increased ability to compete

  Increased ability to compete

• –

  Improved relationships with trading partners

  Improved relationships with trading partners

• – Improved customer service

  Improved customer service EDI Direct and Indirect Benefits EDI Direct and Indirect Benefits

  Indirect Benefits Direct Benefits Reduced

  Errors Increased Operational Efficiency

  Reduced Costs Competitors

  Trade Partners Increased Ability to Compete

  Improved Service Improved Relationships A Challenge to EDI A Challenge to EDI

  

  Extensible markup language (XML) Extensible markup language (XML)

• – Extension of HTML

  Extension of HTML

• – Provides file formatting structure and means for

  Provides file formatting structure and means for describing data describing data

• – Allows Web pages to perform many EDI

  Allows Web pages to perform many EDI functions functions

  Electronic Commerce Electronic Commerce

  Technology Technology

   Direct Connectivity

  Direct Connectivity

• – Uses dial-up or private lines to connect

  Uses dial-up or private lines to connect 

  Value-Added Networks (VANs) Value-Added Networks (VANs)

• – Circuit provided by vendor

  Circuit provided by vendor

• – Vendor provides additional services

  Vendor provides additional services 

  The Internet The Internet

• – Global communications network

  Global communications network

  Internet Evolution Internet Evolution

   Derived from the Advanced Research Projects Agency network (ARPANET)

   Designed to let computer-to-computer communications continue even during military attacks

   ARPANET joined with Computer Science Network (CSNET) and National Science Foundation Network (NSFNET) to form today’s Internet

  Internet Evolution [cont.) Internet Evolution [cont.)

   During the 1970’s various other networks were connected

   This led to the 1980’s Internet concept which means each network can seamlessly interconnect with other networks

  

Businesses began using the new Internet with

workstations and local area networks

  

The Internet has become a network of networks

  Internet Evolution (cont.) Internet Evolution (cont.)

   In 1989, Tim Berners-Lee of CERN came up

  In 1989, Tim Berners-Lee of CERN came up with the hypertext concept with the hypertext concept

   World-Wide Web is really the application of

  World-Wide Web is really the application of hypertext documents and other materials hypertext documents and other materials

   Hypertext is conceptually a ‘speed dial’

  Hypertext is conceptually a ‘speed dial’ feature in that a user points to and presses the feature in that a user points to and presses the

hypertext link and the system automatically

hypertext link and the system automatically

goes to that location goes to that location

  Key Web Terminology Key Web Terminology _

  Website Website _

  Hypertext link Hypertext link _

  Web page Web page _

  Home page Home page _

  Universal resource locator (URL) Universal resource locator (URL)

• – Protocol

  Protocol

• – Domain name

  Domain name

• – Path

  Path _

  Browser Browser _

  FTP (File Transfer Protocol) FTP (File Transfer Protocol)

  Parts of a URL Parts of a URL

  

http://aisvm1.ais.com/abra7883/index.html

hypertext transmission protocol domain name path (directory and file name on the web server ⁾ hypertext markup language

  Internet Client/Server Internet Client/Server

  Information Retrieval Systems Information Retrieval Systems

  

  Gopher Gopher

  

  Wide Area Information Servers (WAIS) Wide Area Information Servers (WAIS)

  

  USENET USENET

  Each of these predates the WWW and Internet Client/Server Architecture Terminal Emulator PC or Macintosh Unix X11 NextStep

  Addressing schema, Protocols, Format negotiation Gateway is

  FTP Gopher HTTP

  HTTP server plus other application.

  News WAIS

  Database, info Internet Security Internet Security

  

Any resources linked to data communications

  

Any resources linked to data communications

have risk have risk

   Security by physically separating the Web site

  Security by physically separating the Web site from the firm’s computer resources from the firm’s computer resources

   Security by using passwords that allow access

  Security by using passwords that allow access to computing resources to computing resources

   ‘

  ‘ Firewalls’ using routers, intermediary

  Firewalls’ using routers, intermediary computers or application-level methods computers or application-level methods

  An Application-Level Firewall An Application-Level Firewall

  Internet _{Internet Connectivity Internet Connectivity} Internet _{Incoming packets from the Internet pass Incoming packets from the Internet pass Supplier’s Network Supplier’s Network through the connectivity supplier’s network} through the connectivity supplier’s network _{to a router and to the organization to a router and to the organization Router Router the function of the external router}

The packet goes to a router box that duplicates

_{the function of the external router The packet goes to a router box that duplicates Isolation Mechanism Isolation Mechanism Border Router Border Router} Rather than routing the packet directly to its destination, the _{an IP “choke” host an IP “choke” host router redirects traffic through an external services host and router redirects traffic through an external services host and Rather than routing the packet directly to its destination, the IP Choke IP Choke Services Services} External _{External The external services host runs desired apps such as E-mail interface interface The external services host runs desired apps such as E-mail The IP choke performs actual protocol filtering The IP choke performs actual protocol filtering} Protocol Filter _{Protocol Filter Service Gateway Service Gateway Internal/External Internal/External Internal Router Internal Router security policy security policy on the internal network, configured according to internal on the internal network, configured according to internal Traffic is sent through a gateway to a separate router box} Traffic is sent through a gateway to a separate router box

  Intranet Intranet

  

  Internet technology used for internal Internet technology used for internal communications and applications communications and applications

  

  Used for many business applications Used for many business applications requiring communication requiring communication

  Business Applications Business Applications for the Internet for the Internet

  

  Marketing research Marketing research

  

  Competitive intelligence Competitive intelligence

  

  Retailing applications Retailing applications

  

  The future impact of the Internet on The future impact of the Internet on business is enhanced as the National business is enhanced as the National

  Information Infrastructure programs Information Infrastructure programs become established become established

  Successful Internet Use Successful Internet Use

  _ specific users’ needs Make the interface

  _ community Get help if you need it

  Create a sense of community

  _ location Create a sense of

  Be in the right Web location

  _ intuitive Be in the right Web

  Make the interface intuitive

  Target content to Target content to specific users’ needs

   Make sure your Web

  Look beyond customers customers ^

  Update often _ Look beyond

  _ flexible and intuitive Update often

  Make sure your browser and database browser and database structure are both structure are both flexible and intuitive

  _ site is robust Make sure your

  Make sure your Web site is robust

  Get help if you need it Summary Summary

   E-Commerce begins with business intelligence

  E-Commerce begins with business intelligence 

  Primary and secondary data comprise business Primary and secondary data comprise business intelligence intelligence

   Reasons for IOS

  Reasons for IOS

• – Comparative efficiency

  Comparative efficiency

• – Bargaining power

  Bargaining power 

  Three levels of EDI Three levels of EDI

  Summary [cont.] Summary [cont.]

  

  Internet Internet

• – Network of networks

  Network of networks

• – Security concerns

  Security concerns

• – Firewalls

  Firewalls 

  Intranets Intranets

  

  National information infrastructure National information infrastructure