1 lecture 7. e-business and e-commerce lecturer: prof. anatoly sachenko informatics in logistics...
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Lecture 7. E-Business and E-Commerce
Lecturer:
Prof. Anatoly Sachenko
Informatics in Logistics Management
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Lecture Overview
e-Business Systems Introduction to e-Business Systems Cross-Functional Enterprise Applications Enterprise Application Integration Transaction Processing Systems Enterprise Collaboration Systems
e-Commerce Introduction to e-Commerce The Scope of e-Commerce Electronic Commerce Technologies Essential e-Commerce Processes Electronic Payment Processes Web Payment Processes Electronic Payment Processes - Secure Electronic
Payments
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Introduction to e-Business Systems
E-business is the use of the Internet and other networks and information technologies to support electronic commerce, enterprise communications and collaboration, and Web-enabled business processes, both within a networked and information technologies
E-business includes e-commerce It involves the buying and selling and
marketing and servicing of products, services, and information over the Internet and other networks
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Cross-Functional Enterprise Applications
Many companies are using IT to develop integrated cross-functional enterprise systems that cross the boundaries of traditional business functions in order to reengineer and improve vital business processes all across the enterprise Example of such business processes are presented below
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Cross-Functional Enterprise Applications (continued)
Figure on next slide is an excellent illustration of the concept of enterprise application architecture
It illustrates the interrelationships of the major cross-functional enterprise applications that many companies have or are installing today
This architecture spotlights the roles that e-business systems play in supporting the customers
Focused on accomplishing fundamental business processes in concert with the company’s customer, supplier, partner, & employee stakeholders
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Cross-Functional Enterprise Applications (continued)
Enterprise Application Architecture
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Cross-Functional Enterprise Applications (continued)
Enterprise resource planning (ERP) concentrates on the efficiency of a firm’s internal production.. Distribution. And financial processes.
Customer relationship management (CRM) focuses on acquiring and retaining profitable customers via marketing. Sales. And service processes.
Partner relationship (PRM) aims at acquiring and retaining partners who can enhance the selling and distribution of a firm’s products and services.
Supply chain management (SCM) focuses on developing the most efficient and effective sourcing and procurement processes with suppliers for the products and services needed by a business.
Knowledge management (KM) applications focus on providing a firm’s employees with tools that support group collaboration and decision support.
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Enterprise Application Integration
How does a business interconnect some of the cross functional enterprise systems?
Enterprise application integration (EAI) software is being used by many companies to connect their major e-business applications (next slide).
EAI software enables users to model the business processes involved in the interactions that should occur between business applications
EAI also provides middleware thatPerforms data conversion & coordinationProvides application communication & messaging services
Provides access to the application interfaces
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Enterprise Application Integration (continued)
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Enterprise Application Integration (continued)
Business value Integrates front-office and back-office applications
to allow for quicker, more effective response to business events and customer demands
Improves customer and suppler experience with the business because of its responsiveness
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Transaction Processing Systems
Cross-functional information systems that process data resulting from the occurrence of business transactions Transactions – events that occur as part of doing
business Sales Purchases Deposits Withdrawals Refunds Payments
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Transaction Processing Systems (continued)
Online transaction processing systems (OLTP)
Play a strategic role in electronic commerce Real-time systems that capture and
process transactions immediately OLTP systems add value to product or
service through superior customer service
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Transaction Processing Systems (continued)
Transaction Processing Cycle (see next slide) Data entry
The capture of business data Transaction processing
Two basic ways Batch processing where transaction data are
accumulated & processed periodically Real-time processing where data are
processed immediately after a transaction occurs
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Transaction Processing Systems (continued)
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Transaction Processing Systems (continued)
Database maintenance Corporate databases are updated to reflect the
day-to-day business transactions Document and report generation
A variety of documents and reports are producedInquiry processing
Inquiries and responses concerning the results of transaction processing activity
Examples of queries include: Checking on the status of a sales order Checking on the balance in an account Checking on the amount of stock in inventory
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Enterprise Collaboration Systems
Cross-functional e-business systems that enhance communication, coordination, & collaboration Communicate – share info with each other Coordinate – coordinate individual work
efforts & use of resources with each other. Collaborate – work together cooperatively on
joint projects and assignmentsTools for Enterprise Collaboration (next slide)
Electronic communication E-mail and Voice mail and Fax Web publishing and Bulletin boards Paging and Internet (IP) phone
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Enterprise Collaboration Systems (continued)
Electronic conferencing Data & voice conferencing Videoconferencing Chat systems Discussion forums Electronic meeting systems
Synchronous. Team members can meet at the same time and place in a “decision room” settingCollaborative work management
Calendaring & scheduling Task & project management Workflow systems Knowledge management
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Introduction to e-Commerce
Few concepts have revolutionized business more profoundly than e-commerce
E-commerce is the online process of developing, marketing, selling, delivering, servicing, and paying for products & services transacted on internetworked, global marketplaces of customers, with the support of a worldwide network of business partners
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Introduction to e-Commerce (continued)
E-commerce systems rely on the resources of the Internet, intranets, extranets, and other computer networks. Electronic commerce can include:Interactive marketing, ordering, payment, and
customer support processes at e-commerce sites on the World Wide Web
Extranet access of inventory databases by customers and suppliers
Intranet access of customer relationship management systems by sales and customer service reps
Customer collaboration in product development via Internet newsgroups and e-mail exchanges
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The Scope of e-Commerce
Companies involved in e-commerce as either buyers or sellers rely on Internet-based technologies and e-commerce applications and services to accomplish marketing, discovery, transaction processing, and product and customer service processes.
Three Basic Categories Business-to-Consumer (B2C) Business-to-Business (B2B) Consumer-to-Consumer (C2C)
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The Scope of e-Commerce(continued)
Business-to-Consumer (B2C) – in this form of e- commerce, businesses must develop attractive electronic marketplaces to entice and sell products and services to customers. Companies may offer e-commerce websites that provide virtual
storefronts and multimedia catalogues. Interactive order processing Secure electronic payment systems Online customer support
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The Scope of e-Commerce(continued)
Business-to-Business (B2B) – this category of electronic commerce involves both electronic business marketplaces and direct market links between businesses. Companies may offer:
Secure Internet or extranet e-commerce websites for their business customers/suppliers.
Electronic data interchange (EDI) via the Internet or extranets for computer-to-computer exchange of e-commerce documents with their larger business customers and suppliers.
B2B e-commerce portals that provide auction and exchange markets for businesses.
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The Scope of e-Commerce(continued)
Consumer-to-Consumer (C2C) e-Commerce – successes of online auctions like e-Bay, allow consumers (and businesses) to buy and sell with each other in an auction process at an auction website. Online consumer or business auctions are an
important e-commerce alternative for B2C or B2B e-commerce.
Electronic personal advertising of products or services to buy or sell by consumers at electronic newspaper sites, consumer e-commerce portals, or personal websites is an important form of C2C e-commerce.
Electronic Commerce Technologies - next slide illustrates an e-commerce architecture developed by Sun Microsystems
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Electronic Commerce Technologies
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Scope of e-Commerce (continued)
Electronic commerce technologies (continued) Trading and business partners rely on the Internet
and extranets to exchange information and accomplish secure transactions
Company employees depend on a variety of Internet and intranet resources to communicate and collaborate
IS professionals and end users can use a variety of software tools to develop and manage the content and operations of the websites and other e-commerce resources
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Essential e-Commerce Processes
Nine key components of an e-commerce process architecture (see next slide) Access control and security Profiling and personalizing Search management Content management Catalog management Payment Workflow management Event notification Collaboration and training
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Essential e-Commerce Processes(continued)
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Essential e-Commerce Processes (continued)
Access control and security Processes MUST establish mutual trust and secure
access Authenticating users Authorizing access Enforcing security features
Must protect the resources of e-commerce sites from threats Hackers Theft of passwords or credit card numbers System failures
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Essential e-Commerce Processes (continued)
Profiling and personalizing One-to-one marketing strategy
Personalized view of the website Based on Personal data, and website behavior
and choices Used to help authenticate your identity for account
management and payment purposesSearch management
Helps customers find the specific product or service they want
SW may include a search engine component or a company may acquire a customized e-commerce search engine
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Essential e-Commerce Processes (continued)
Content and catalog management Content management software helps
companies develop, generate, deliver, update, and archive text data and multimedia information
Frequently takes the form of multimedia catalogs of product information
Works with profiling tools to personalize the content of the website
May be expanded to include product configuration processes that support mass customization of a company’s products
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Essential e-Commerce Processes (continued)
Workflow management Workflow software engine
Predefined sets of business rules Roles of stakeholders Authorization requirements and routing alternatives Databases used Sequence of tasks
Workflow systems ensure that..Proper transactions, decisions, & work activities are
performedCorrect data and documents are routed to the right
employees, customers, suppliers, and other business stakeholders
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Essential e-Commerce Processes (continued)
Event notification Most applications are event driven
New customer’s first visit Payment and delivery processes Customer relationship & supply chain
management activities Notifies those concerned when an event occurs that
might affect their status in a transactionCollaboration and training
Supports the collaboration arrangements & trading services needed by customers, suppliers, & other stakeholders
May be provided by Internet-based trading services
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Electronic Payment Processes
Processes are complex Near anonymous nature of transactions Security issues Wide variety of debit and credit alternatives Wide variety of financial institutions and
intermediariesWeb payment processes
Credit cards Purchase orders Electronic shopping cart
An example of a secure electronic payment system with many payment alternatives is illustrated on next slide
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Web Payment Processes
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Electronic Payment Processes (continued)
Electronic funds transfer (EFT) Uses a variety of IT to capture and process
money and credit transfers between banks and businesses and their customers ATMs and Pay-by-phone Web-based
PayPal & Bill Point (cash transfers) CheckFree and PayTrust (automatic bill
paying services) Electronic bill payment Point-of-sale terminals linked to bank EFT
systems
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Electronic Payment Processes - Secure Electronic Payments
Secure electronic payments – when you make an online purchase on the Internet, your credit card info is vulnerable to interception by network sniffers SW that easily recognizes credit card number
formats Several basic security measures are being used to
solve this security problem. They include: Encrypt data passing between customer and
merchant Encrypt the data passing between the customer
and the company authorizing the credit card transaction
Take sensitive information offline (cont-d)
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Electronic Payment Processes - Secure Electronic Payments (cont-d)
Secure Socket Layer (SSL) – automatically encrypts data passing between your web browser and a merchant’s server.
Digital Wallet – you add security software add-on modules to your web browser. This enables your browser to encrypt your credit card data in such a way that only the bank that authorizes credit card transactions for the merchant can see it.
Secure Electronic Transaction standard (SET) – software encrypts a digital envelope of digital certificates specifying the payment details for each transaction. SET is expected to become the dominant standard for secure electronic payments on the Internet.
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References
James A. O'Brien. Management Information Systems: Managing Information Technology in the Business Enterprise. Sixth Edition. McGraw-Hill/Irwin, 2004, 619 p.
http://www.roz6.polsl.pl/asachenko/sutaa.html Kisielnicki J., Sroka H.: Systemy informacyjne
biznesu. Informatyka dla zarządzania. Metody projektowania i wdrażania systemów. A.W. „Placet”, Wwarszawa 1999 r.