Principles of Information Systems - Chapter 8

Principles of Information Systems, Sixth Edition

Electronic Commerce

Chapter 8


Principles and Learning Objectives

• E-commerce is a new way of conducting business, and as with any other new application of technology, it presents both opportunities for improvement and potential problems.– Identify several advantages of e-commerce.– Outline a multistage model that describes how e-

commerce works.– Identify some of the major challenges companies

must overcome to succeed in e-commerce.– Identify several e-commerce applications.



• E-commerce requires the careful planning and integration of a number of technology infrastructure components.

– Outline the key components of technology infrastructure that must be in place for e-commerce to succeed.

– Discuss the key features of the electronic payments systems needed to support e-commerce.



• Users of the new e-commerce technology must take safeguards to protect themselves. – Identify the major issues that represent significant

threats to the continued growth of e-commerce.

• Organizations must define and execute a strategy to be successful in e-commerce. – Outline the key components of a successful e-

commerce strategy.


An Introduction to Electronic Commerce


Introduction to Electronic Commerce

• Business-to-consumer (B2C) e-commerce• Business-to-business (B2B) e-commerce• Consumer-to-consumer (C2C) e-commerce


Multistage Model for E-commerce

• Search and identification

• Selection and negotiation

• Purchasing products and services electronically

• Product and service delivery

• After-sales service


Multistage Model for E-commerce


Product and Service Delivery


E-Commerce Model


E-Commerce Challenges

• Change distribution systems & work processes• Split-case distribution• Integrate web-based order processing with

traditional systems


The E-Commerce Supply Chain

• Supply chain management– Demand planning– Supply planning– Demand fulfillment

• Increased revenues and decreased costs• Improved customer satisfaction• Inventory reduction across the supply chain


The E-Commerce Supply Chain


Supply Chain Management


Business-to-Business

• Allows manufacturers to buy at low price worldwide

• Enterprise can sell to a global market


Global E-Commerce

• Steps in localization– recognizing and conforming to the nuances,

subtleties, and tastes of local cultures– supporting basic trade laws such as each

country’s currency, payment preferences, taxes, and tariffs

– ensuring that technological capabilities match local connection speeds


Global E-Commerce

• Determine which global markets make the most sense for selling products or services on-line

• Decide whether Web content should be generated or updated centrally or locally


E-Commerce Applications


Retail and Wholesale

• Electronic retailing• Cybermalls• Wholesale e-commerce: B2B


Manufacturing


Marketing

• Market segmentation

• Technology-enabled relationship management


Investment and Finance

• On-line stock trading

• On-line banking– Electronic bill presentment






Technology Infrastructure


Technology Infrastructure


Hardware

• Storage capacity– Software– Volume of e-commerce transactions

• Website hosting


Web Server Software

• Security and identification– Denial of service attack

• Web site tracking– Web log file


Web Server Software

• Web site development tools• Retrieving and sending Web pages• Web page construction software

– Static Web page– Dynamic Web page


E-Commerce Software

• Catalog management• Product configuration• Shopping cart


E-Commerce Transaction Processing

• Automates transaction processes from order placement to reconciliation

• Web traffic data analysis


Electronic Shopping Cart


Network and Packet Switching

• All e-commerce depends on a type of network to securely transmit data– Internet– Extranet– Value-added network (VAN)– Virtual private network (VPN)

• All approaches rely on packet switching and use routers

• Cost, availability, reliability, security, and redundancy must be considered when choosing a network


Electronic Payment Systems


Electronic Payment Systems

• Digital certificate• Certificate authority• Secure sockets layer (SSL)• Electronic cash• Electronic wallets• Smart, credit, charge, and debit cards


Threats to E-Commerce


Threats to E-Commerce

• E-commerce incidents

• Theft of intellectual property– Patents on business processes


Fraud

• On-line auction fraud

• Spam

• Pyramid schemes

• Investment fraud

• Stock scams


Invasion of Consumer Privacy

• On-line profiling• Clickstream data• Safe harbor principles


TRUSTe Seal


BBB On-line Privacy Seal


How to Protect Your Privacy While On-Line


Strategies for Successful E-Commerce


Developing an Effective Web Presence

Visitors to a web site should be able to:• Obtain general information about the

organization• Obtain financial information for making an

investment decision• Learn the organization’s position on social

issues• Learn about the products or services that the

organization sells


Putting up a Web Site

• Web site hosting services• Storefront brokers


Building Traffic to Your Web Site

• Domain names• Meta tags• Traffic data analysis


Maintaining and Improving Your Web Site

• Be alert to new trends • Be prepared to take advantage of new

opportunities• Personalization

– Explicit– Implicit


Summary

• E-commerce - enables consumers and companies to gain access to worldwide markets

• Electronic retailing (e-tailing) - the direct sale from business-to-consumer through electronic storefronts designed around an electronic catalog and shopping cart model

• E-commerce shoppers - must be on constant guard to

protect their rights, security, and personal privacy

Principles of Information Systems - Chapter 8

Education

ecommerce model

ecommerce challenges

ecommerce applications

ecommerce search

advantages of ecommerce

new ecommerce technology

learning objectives

consumer c2c ecommerce