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Chapter 5 Electronic and Mobile Commerce and Enterprise Systems An Introduction to Electronic Commerce • Electronic commerce: – Conducting business activities electronically over computer networks • Business activities that are strong candidates for conversion to e-commerce: – Paper-based – Time-consuming – Inconvenient for customers Business-to-Business (B2B) E-Commerce • Subset of e-commerce • All the participants are organizations • Useful tool for connecting business partners in a virtual supply chain to cut resupply times and reduce costs Business-to-Consumer (B2C) E-Commerce • Form 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-Commerce • Subset of e-commerce that involves consumers selling directly to other consumers Consumer-to-Consumer (C2C) E-Commerce (continued) e-Government • Use of information and communications technology to: – Simplify the sharing of information – Speed formerly paper-based processes – Improve the relationship between citizen and government • Forms of e-Government – Government-to-consumer (G2C) – Government-to-business (G2B) – Government-to-government (G2G) Electronic and Mobile Commerce Applications • Many B2B, B2C, C2C, and m-commerce applications are being used in: – Retail and wholesale – Manufacturing – Marketing and advertising – Price comparison – Couponing – Investment and finance – Banking and e-boutiques Retail and Wholesale • Electronic retailing (e-tailing): – Direct sale from business to consumer through electronic storefronts • Cybermall: – Single Web site that offers many products and services at one Internet location • Manufacturing, repair, and operations (MRO): – Purchases often approach 40 percent of a manufacturing company’s total revenues Manufacturing • Electronic exchange: – Electronic forum where manufacturers, suppliers, and competitors buy and sell goods, trade market information, and run back-office operations • Private exchanges: – Owned and operated by a single company • Public exchanges: – Owned and operated by industry groups Marketing • Market segmentation: – Identification of specific markets to target them with advertising messages Advertising • Mobile ad impressions are generally bought at: – Cost per thousand (CPM), cost per click (CPC), or cost per action (CPA) • Price comparison: – Mobile phone services enable shoppers to compare prices and products on the Web • Couponing: – Shoppers can subscribe to mobile coupon aggregators Investment and Finance • The Internet: – Has revolutionized the world of investment and finance • The brokerage business: – Adapted to the Internet faster than any other arm of finance Banking • Online banking customers: – Can check balances of their savings, checking, and loan accounts – Transfer money among accounts – Pay their bills Advantages of Electronic and Mobile Commerce Web Server Software • Each e-commerce Web site must have Web server software to perform fundamental services: – Security and identification – Retrieval and sending of Web pages – Web site tracking – Web site development – Web page development E-Commerce Software • Investigate and install e-commerce software to support five core tasks: – Catalog management to create and update the product catalog – Product configuration to help customers select the necessary components and options – Shopping cart facilities to track the items selected for purchase – E-commerce transaction processing – Web traffic data analysis to provide details to adjust the operations of the Web site Electronic Payment Systems • Digital certificate: – Attachment to an e-mail message or data embedded in a Web site that verifies the identity of a sender or Web Site • Certificate authority (CA): – Trusted third-party organization or company that issues digital certificates Electronic Payment Systems (continued) • Secure Sockets Layer (SSL): – Used to secure sensitive data • Electronic cash: – An amount of money that is computerized, stored, and used as cash for e-commerce transactions • Credit, charge, debit, p-, and smart cards: – Smart card: • Credit card-sized device with an embedded microchip to provide electronic memory and processing capability Electronic Payment Systems (continued) • P-Card: – Credit card used to streamline the traditional purchase order and invoice payment processes • Payments using cell phones: – Available options: • Payments linked to your bank account • Payments added to your phone bill Traditional Transaction Processing Methods and Objectives • Batch processing system: – Data processing in which business transactions are: • Accumulated over a period of time • Prepared for processing as a single unit or batch • Online transaction processing (OLTP): – Data processing in which each transaction is processed immediately Data Collection • Capturing and gathering all data necessary to complete the processing of transactions • Data collection can be: – Manual – Automated via special input devices • Data should be: – Collected at source – Recorded accurately, in a timely fashion Data Editing • Checking data for validity and completeness to detect any problems • Examples: – Quantity and cost data must be numeric – Names must be alphabetic Data Correction • Reentering data that was not typed or scanned properly • Error messages must specify the problem so proper corrections can be made Data Manipulation • Performing calculations and other data transformations related to business transactions • Can include: – Classifying data – Sorting data into categories – Performing calculations – Summarizing results – Storing data in the organization’s database for further processing Data Storage • Updating one or more databases with new transactions • After being updated, this data can be further processed and manipulated by other systems Enterprise Resource Planning • ERP systems: – Central to the organization – Ensure information can be shared across all business functions – Employ a database of key operational and planning data that can be shared by all An Overview of Enterprise Resource Planning • ERP systems: – Evolved from materials requirement planning systems (MRP) • Large organizations: – The first to take on the challenge of implementing ERP Advantages of ERP • Improved access to data for operational decision making • Elimination of costly, inflexible legacy systems • Improvement of work processes • Upgrade of technology infrastructure Disadvantages of ERP Systems • Expense and time in implementation • Difficulty implementing change • Difficulty integrating with other systems • Difficulty in loading data into new ERP system • Risks in using one vendor • Risk of implementation failure

Chapter 5
Electronic and Mobile Commerce and
Enterprise Systems
An Introduction to Electronic
Commerce
• Electronic commerce:
– Conducting business activities electronically over
computer networks
• Business activities that are strong candidates for
conversion to e-commerce:
– Paper-based
– Time-consuming
– Inconvenient for customers
Business-to-Business (B2B)
E-Commerce
• Subset of e-commerce
• All the participants are organizations
• Useful tool for connecting business partners in a
virtual supply chain to cut resupply times and
reduce costs
Business-to-Consumer (B2C)
E-Commerce
• Form 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-Commerce
• Subset of e-commerce that involves consumers
selling directly to other consumers
Consumer-to-Consumer (C2C)
E-Commerce (continued)
e-Government
• Use of information and communications technology
to:
– Simplify the sharing of information
– Speed formerly paper-based processes
– Improve the relationship between citizen and
government
• Forms of e-Government
– Government-to-consumer (G2C)
– Government-to-business (G2B)
– Government-to-government (G2G)
Electronic and Mobile Commerce
Applications
• Many B2B, B2C, C2C, and m-commerce
applications are being used in:
– Retail and wholesale
– Manufacturing
– Marketing and advertising
– Price comparison
– Couponing
– Investment and finance
– Banking and e-boutiques
Retail and Wholesale
• Electronic retailing (e-tailing):
– Direct sale from business to consumer through
electronic storefronts
• Cybermall:
– Single Web site that offers many products and
services at one Internet location
• Manufacturing, repair, and operations (MRO):
– Purchases often approach 40 percent of a
manufacturing company’s total revenues
Manufacturing
• Electronic exchange:
– Electronic forum where manufacturers, suppliers,
and competitors buy and sell goods, trade market
information, and run back-office operations
• Private exchanges:
– Owned and operated by a single company
• Public exchanges:
– Owned and operated by industry groups
Marketing
• Market segmentation:
– Identification of specific markets to target them with
advertising messages
Advertising
• Mobile ad impressions are generally bought at:
– Cost per thousand (CPM), cost per click (CPC), or
cost per action (CPA)
• Price comparison:
– Mobile phone services enable shoppers to compare
prices and products on the Web
• Couponing:
– Shoppers can subscribe to mobile coupon
aggregators
Investment and Finance
• The Internet:
– Has revolutionized the world of investment and
finance
• The brokerage business:
– Adapted to the Internet faster than any other arm of
finance
Banking
• Online banking customers:
– Can check balances of their savings, checking, and
loan accounts
– Transfer money among accounts
– Pay their bills
Advantages of Electronic and Mobile
Commerce
Web Server Software
• Each e-commerce Web site must have Web server
software to perform fundamental services:
– Security and identification
– Retrieval and sending of Web pages
– Web site tracking
– Web site development
– Web page development
E-Commerce Software
• Investigate and install e-commerce software to
support five core tasks:
– Catalog management to create and update the
product catalog
– Product configuration to help customers select the
necessary components and options
– Shopping cart facilities to track the items selected for
purchase
– E-commerce transaction processing
– Web traffic data analysis to provide details to adjust
the operations of the Web site
Electronic Payment Systems
• Digital certificate:
– Attachment to an e-mail message or data embedded
in a Web site that verifies the identity of a sender or
Web Site
• Certificate authority (CA):
– Trusted third-party organization or company that
issues digital certificates
Electronic Payment Systems
(continued)
• Secure Sockets Layer (SSL):
– Used to secure sensitive data
• Electronic cash:
– An amount of money that is computerized, stored,
and used as cash for e-commerce transactions
• Credit, charge, debit, p-, and smart cards:
– Smart card:
• Credit card-sized device with an embedded microchip
to provide electronic memory and processing
capability
Electronic Payment Systems
(continued)
• P-Card:
– Credit card used to streamline the traditional
purchase order and invoice payment processes
• Payments using cell phones:
– Available options:
• Payments linked to your bank account
• Payments added to your phone bill
Traditional Transaction Processing
Methods and Objectives
• Batch processing system:
– Data processing in which business transactions are:
• Accumulated over a period of time
• Prepared for processing as a single unit or batch
• Online transaction processing (OLTP):
– Data processing in which each transaction is
processed immediately
Data Collection
• Capturing and gathering all data necessary to
complete the processing of transactions
• Data collection can be:
– Manual
– Automated via special input devices
• Data should be:
– Collected at source
– Recorded accurately, in a timely fashion
Data Editing
• Checking data for validity and completeness to
detect any problems
• Examples:
– Quantity and cost data must be numeric
– Names must be alphabetic
Data Correction
• Reentering data that was not typed or scanned
properly
• Error messages must specify the problem so
proper corrections can be made
Data Manipulation
• Performing calculations and other data
transformations related to business transactions
• Can include:
– Classifying data
– Sorting data into categories
– Performing calculations
– Summarizing results
– Storing data in the organization’s database for
further processing
Data Storage
• Updating one or more databases with new
transactions
• After being updated, this data can be further
processed and manipulated by other systems
Enterprise Resource Planning
• ERP systems:
– Central to the organization
– Ensure information can be shared across all
business functions
– Employ a database of key operational and planning
data that can be shared by all
An Overview of Enterprise Resource
Planning
• ERP systems:
– Evolved from materials requirement planning
systems (MRP)
• Large organizations:
– The first to take on the challenge of implementing
ERP
Advantages of ERP
• Improved access to data for operational decision
making
• Elimination of costly, inflexible legacy systems
• Improvement of work processes
• Upgrade of technology infrastructure
Disadvantages of ERP Systems
• Expense and time in implementation
• Difficulty implementing change
• Difficulty integrating with other systems
• Difficulty in loading data into new ERP system
• Risks in using one vendor
• Risk of implementation failure