ACC4071_Week02_eBizz

2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/Hopwood

Chapter 3

3– 1

eBusiness and eCommerce


Learning Objective 1

3 – 2

Describe various eCommerceapplications


eBusiness, eCommerce, and Web Commerce

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Electronic Business (eBusiness) refers to the use of information technologies in any aspect of business.

Electronic Commerce (eCommerce) is defined as the use of IT in the exchange of products and services among organizations and individuals.

Web Commerce involves using IT in the exchange of products and services among individuals and organizations over the Internet.


Why Learn About Electronic and Mobile Commerce?Electronic and mobile commerce:

Have transformed many areas of our lives and careers

One fundamental change has been:The manner in which companies interact with

their suppliers, customers, government agencies, and other business partners

Information Systems, Tenth Edition

2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/HopwoodInformation Systems, Tenth Edition

An Introduction to Electronic CommerceElectronic commerce:

Conducting business activities electronically over computer networks

Business activities that are strong candidates for conversion to e-commerce:Paper basedTime-consumingInconvenient for customers


Business-to-Business (B2B) E-CommerceSubset of e-commerceAll the participants are organizationsUseful tool for connecting business partners in a

virtual supply chain to cut resupply times and reduce costs

An organization will use both:Buy-side e-commerce to purchase goods and

services andSell-side e-commerce to sell products to its

customers


Business-to-Consumer (B2C) E-CommerceForm of e-commerce in which customers deal

directly with an organization and avoid intermediaries

Disintermediation:The elimination of intermediate organizations

between the producer and the consumer


Consumer-to-Consumer (C2C) E-CommerceSubset of e-commerce that involves consumers

selling directly to other consumersPopular sites:

Bidzcom, Craigslist, eBid, KijijiePier, Ibidfree, Ubid, and Tradus

Etsy is a C2C Web site that:Specializes in the buying and selling of

handmade and vintage itemsFacilitates sales worth more than $10 million

each month


Consumer-to-Consumer (C2C) E-Commerce (continued)



Multistage Model for E-Commerce (continued)



3 – 11

Describe enterprise architectureand its domains.


eBusiness and Enterprise Architecture

3 – 12

The enterprise architecture (EA) describes the joint structure and behavior of the enterprise and its information system.

Objectives of an EA:Alignment of the organization’s IT planning and

strategy with company’s business goalsManagement of risks associated with the

information systemOptimal use of information systems resourcesFlexibility to adapt to the information system to

changing business models and management needs.


eBusiness and Enterprise Architecture

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Enterprise Architecture (EA) involves four enterprise architectural domains:1. Business Architecture2. Data Architecture3. Applications Architecture4. Technical Architecture


Enterprise Architecture

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Business Architecture

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Business architecture defines human resources, processes, and infrastructure that a business needs to accomplish its business strategy.Business architectures are described in terms of

business domains.Business domains describe groups of business

functions, business processes, and concepts for which management may assign responsibility.

Specific components of the typical business architecture:Strategies, goals, objectives, general policies, business

plan, plan of operations, organization structureBusiness processes, workflows, events


Data Architecture

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Data architecture defines the needed data, how it is to be stored, how it is to be processed, how it is to be utilized, and how it integrates with other main architectural domains. The database is the primary concept in data architecture.

Data model determines how the database is structured, as well as the operations that can be performed on its data.

Structured Query Language (SQL) is a technology used to define, access, and manipulate data in a relational database.

The relational data model structures data in two-dimensional tables.


Data Architecture

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The Corporate Information Factory provides a logical architecture for the EA which is represented in a three-part model:1. Data acquisition – data are acquired

from various operations applications.2. Data management – data are integrated

into databases and are also transformed and stored in operational databases and data warehouses.

3. Data delivery – data are delivered to various data marts.


Data Architecture

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Operational databases store relatively current transaction data in support of tactical decisions.

Data warehouses store enormous volumes of current and historical data for use in research and analysis.

Data marts contain subsets of the data contained in the operational database and data warehouse.

Data mining warehouse may contain copies of subsets of the data warehouse.

Online analytical processing (OLAP) involves complex analysis performed on data warehouses.


Technical Architecture

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Technical architecture describes the structure and behavior of the IT infrastructure and defines standards, principles, procedures, and best practices to govern the IT architecture. Eight technical domains:1. Applications2. Database3. Enterprise systems management4. Information5. Integration6. Network and telecommunications7. Platform8. Security



3 – 20

Describe various ePaymentapplications


Electronic Payment Systems

3 – 21

Electronic Bill Payment Systems – the payer sends electronic instructions to his or her bank detailing who, when, and amount to pay.

Credit and Debit Card Systems – the payer transmits a credit or debit card number to a secure server.Secure server – one in which the

communications link is protected by encryption.Payment Intermediaries – serves as an

intermediary between payer and payee (e.g., PayPal).



3 – 22

Digital Cash (or e-cash or electronic money) is created when a bank attaches a digital signature to a note promising to pay the bearer some amount of money.Digital signature is an encrypted, digested

version of a document that can be used to verify the document’s authorship and authenticity.

Virtual Cash – based on an electronic wallet.Electronic wallet is a computer program that

keeps track of the various items of information associated with electronic money.



3 – 23

Virtual Cash in Electronic Cards:Smart card is a handheld electronic card that is

used for payments. Four types:1. Memory cards contain microchips that store

information and contain hardware that provides PIN access to the card’s contents. Possess weak security.

2. Shared-key cards overcome the weakness of memory cards by using encryption for all communications between the card and cash register.

3. Signature-transporting cards allow the user to spend digital cash.

4. Signature-creating cards are capable of generating their own digital signatures.


Electronic Payment Systems (continued)




3 – 25

Describe eCommercechallenges and issues


E-Commerce ChallengesDealing with consumer privacy concernsOvercoming consumers’ lack of trustOvercoming global issues


Dealing with Consumer Privacy ConcernsIdentify theft:

Someone using your personally identifying information without your permission to commit fraud

Companies must be prepared to:Make a substantial investment to safeguard

their customers’ privacy or run the risk of losing customers



Overcoming Consumers’ Lack of TrustLack of trust in online sellers:

One of the most frequently cited reasons that some consumers are not willing to purchase online

Online marketers must:Create specific trust-building strategies for their

Web sites by analyzing their customers, products, and services



Overcoming Global IssuesThese include:

Cultural challengesLanguage challengesTime and distance challengesInfrastructure challengesCurrency challengesState, regional, and national law challenges



Threats to Electronic and Mobile CommerceBusinesses must ensure that e-commerce and m-

commerce transactions are safe and consumers are protected


SecurityMethods to increase security:

Address Verification SystemCard Verification Number techniqueVisa’s Advanced Authorization processFederal Financial Institutions Examination

Council’s “Authentication in an Internet Banking Environment” guidelines



Theft of Intellectual PropertyIntellectual property:

Works of the mind that are distinct somehow and are owned or created by a single entity

Digital rights management (DRM):The use of any of several technologies to

enforce policies for controlling access to digital media such as movies, music, and software


Legal JurisdictionWhen conducting e-commerce, sales must not

violate county, state, or country legal jurisdictions Examples:

Selling stun guns and similar devicesSelling cigarettes or alcohol to underage

customers

2013 Pearson Education, Inc. Publishing as Prentice Hall, AIS, 11/e, by Bodnar/Hopwood3– 34

End of Chapter 3

Some slides from Stair, R. and Reynold,G. (2012). Information Systems (10ed). Cengage Learning.

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