II Information Systems Technology Ross Malaga 7 "Part II Using Information Systems" Copyright © 2005 Prentice Hall, Inc. 7-1 USING INFORMATION SYSTEMS.

II

Copyright © 2005 Prentice Hall, Inc.

7-1

Information Systems TechnologyRoss Malaga

7

"Part II Using Information Systems"

USING INFORMATIONSYSTEMS FOR

ELECTRONIC BUSINESS


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LEARNING GOALS

• Describe the nature of e-business.• Describe the e-business value chain and disintermediation.• Describe the basic e-business models.• Describe the major online marketing methods.• Discuss the technologies behind e-business, including the

factors that drive Web site success, electronic payment mechanisms, and encryption.

• Discuss the major issues that are created by and affect e-business.

7-3Copyright © 2005 Prentice Hall, Inc.

E-Business at the Bead Bar

• Meredith – Wants to investigate using the Internet to sell Bead Bar products.

• Suzanne – Concerned about security and wants an alternative to using credit cards over the Internet.

• Leda – Worried about franchisees using the Internet to purchase directly from suppliers and also about viewing the Bead Bar as a competitor.

• Mitch – Wants to sell bead jewelry on eBay.• Julia – Wants to be able to do electronic bill paying,

but is worried about the tax implications of e-business.


E-Business at the Bead Bar (continued)

• Miriam – Wants to use the Internet for advertising.• Rachel – Wants to use the Internet to connect directly

with bead makers.• Jim – Wants to know if the Internet can help with

HR.


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What is E-Business?

• Conduct of commercial transactions with the help of telecommunications systems

• Early forms of E-Business– Electronic data interchange (EDI)

• Transfer of commonly used business documents in electronic form using a standard format

– Electronic funds transfer (EFT)• Sending money through electronic networks directly from one

bank account to another

• E-Business took off in the 1990s with the rise in popularity of the Internet and WWW.


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E-Business Benefits

• The ability to tap into global marketplace• Business is open 24/7• Increased transaction and search speed• Convenience• The ability to offer customized products easily• Improved customer service• Consumers can become sellers


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E-Business Drawbacks

• Security

• Privacy

• Return on investment (ROI)

• Changing consumers’ habits of touch and feel

• Inability to reach consumers who do not have Internet access


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E-Business TechnologiesTCP/IP

JavaFirewalls

Electronic Payments,Online Billing

E-Business IssuesCopyright

PrivacySecurity

Intellectual PropertyTaxation

TrustJurisdiction

E-Business modelsB2BB2CC2C

E-BusinessTriangle


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Components of E-Business


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E-Business Value Chain

• Value chain – the steps required to get a good or service to a consumer

• E-Business can radically change a value chain– Disintermediation – elimination of

intermediaries


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E-Business Models

• Business-to-Consumer – B2C– Business sells product directly to the consumer.

• Business-to-Business – B2B– Businesses sell to other businesses.

• Consumer-to-Consumer – C2C– Consumers sell directly to other consumers.


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B2C Models

• Subscription – Consumers pay to have regular access to site.– Consumersreports.com

• Online storefront– Web site acts as intermediary between

manufacturer and consumer.– Amazon.com


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B2C Models (continued)

• Bricks-and-clicks– Combines a traditional retail outlet with an

online storefront• CircuitCity.com

• Advertising– Sell advertising space on web site to other

companies• Sports.yahoo.com


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B2C Models (continued)

• Internet presence– Use web presence to provide information about

products and services• Exxon.com

• Intermediary– New types of intermediaries connect buyers and

sellers• E-Trade.com


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B2B Models

• B2B is much larger than B2C– Size estimates range from $543 Billion to $6.8 Trillion– Increase 50% per year

• Information exchanges– Exchange business documents over the Internet– EDI via the Internet

• Direct sellers– Direct sales model, direct to other businesses

• Dell Premier pages• Cisco

• New intermediaries– Virtual hubs match buyers and sellers

• E-Hospitality


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C2C Models

• Online garage sales• Online auctions

– Allows consumers to buy and sell goods with other consumers– EBay.com

• C2C services– Sell expertise directly to other customers– Keen.com

• Online communities– Allow people with similar interests to come together– Chat rooms– Discussion boards


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E-Government Business Models

• Government-to-citizen (G2C)– Provide government services to citizens over the

Internet• Vehicle registration renewal• Online voting

• Government-to-business (G2B)– Helps government and business work together more

efficiently– Reduces paperwork and costs for business and

government


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Online Marketing

• Market the online business to the world– Banner ads– Viral marketing– Permission marketing


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E-Business Technology

• Information technology (IT) puts the e in e-business

• Web site functionality– Speed of loading Web pages– Good search feature so users can find what they

are looking for quickly– Properly used graphics– Simple checkout functions to close the sale


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Electronic Payments

• Send financial transaction information securely over the Internet

• Mechanisms for electronic payments– Money transfer services – Paypal.com– Digital wallet – Microsoft Passport– Smart cards

• Online billing– Customers receive their bills and make payments online– WellsFargo.com


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E-Business Issues

• E-Business raises a number of difficult legal, social, and ethical issues– Protection of intellectual property– Taxation of e-business transactions– Jurisdiction – whose laws apply when a

transaction crosses many international boundaries– Trust

• TRUSTe


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Security

• Security risks in e-business are very diverse

• Hackers

• Spoofing

• Denial of service attacks

• Distributed denial of service attacks


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A SYN-ACK Attack


Bead Bar Consultant

• How e-business issues affect the Bead Bar– Meredith – Use the Internet to attract customers to studios

and possibly to sell merchandise.– Suzanne – How to solve potential conflicts between online

sales and the traditional Bead bar business model?– Leda – Use franchisees to provide online inventory as

strategy to reduce channel conflict.– Mitch – How to avoid disintermediation of the Bead Bar by

cruise ships?– Julia – Pay bills online but with alternative payment

systems.


Bead Bar Consultant (continued)

– Miriam – Reach customers via opt-in online mailings.– Rachel – Use B2B exchanges for both office supplies and

services, and also for Bead Bar products.– Jim – Use the Internet for employee searches and also as a

conduit to connect with service companies that handle employee benefits and services.


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Learning Goals Summary

In this chapter you have learned: The nature of e-business The e-business value chain and disintermediation The basic e-business models The major online marketing methods The technologies behind e-business, including the factors that

drive Web site success, electronic payment mechanisms, and encryption

The major issues that are created by and affect e-business

II Information Systems Technology Ross Malaga 7 "Part II Using Information Systems" Copyright © 2005 Prentice Hall, Inc. 7-1 USING INFORMATION SYSTEMS.

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