Chapter 8 ECommerce Succeeding with Technology Second Edition

Chapter 8: E-Commerce Succeeding with Technology: Second Edition Succeeding with Technology

Objectives n Define e-commerce and understand its role as a transaction processing system n List the three types of e-commerce, and explain how e-commerce supports the stages of the buying process and methods of marketing and selling n Discuss several examples of e-commerce applications and services Succeeding with Technology 2

Objectives (continued) n Define m-commerce, and describe several mcommerce services n List the components of an e-commerce system, and explain how they function together to provide ecommerce services Succeeding with Technology 3

The Roots of E-Commerce – E-Commerce History n n n EDI q Uses private communications networks (VANs) to transmit standardized transaction data Automating transactions using EDI q Drastically reduced the amount of paperwork and the need for human intervention Internet q Provided the ideal platform for conducting EDI transactions Succeeding with Technology 4

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Transaction Processing n n Transaction q An exchange involving goods or services s Transaction processing system (TPS) q Information system used to support and record transactions Batch processing q Transactions are collected over time and processed together in batches Online transaction processing q Takes place at the point of sale Succeeding with Technology 6

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The Transaction Processing Cycle n n n Data collection q The process of capturing transaction related data Data editing q Checking the validity of data entered Data correction q Implemented if an error is found in the entered data Data manipulation q Processing transaction data Data storage q Altering databases to reflect the transaction Succeeding with Technology 8

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Different Transaction Processing for Different Needs n n Order processing system q Supports the sales of goods or services to customers q Arranges for shipment of products Purchasing system q Supports the purchase of goods and raw materials from suppliers Succeeding with Technology 10

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Overview of E-Commerce – Types of E-Commerce n n n Business-to-consumer e-commerce (B 2 C) q Connects individual consumers with sellers Business-to-business e-commerce (B 2 B) q Supports business transactions across private networks, the Internet, and the Web Consumer-to-consumer e-commerce (C 2 C) q Connects individual sellers with people shopping for used items Succeeding with Technology 12

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E-Commerce from the Buyer’s Perspective n Process of buying or acquiring goods or services q Realizing a need q Researching a product q Selecting a vendor q Providing payment q Accepting delivery q Using product support Succeeding with Technology 15

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E-Commerce from the Seller’s Perspective n Sellers business practices q Market research to identify customer needs q Manufacturing products or supplying services that meet customer needs q Marketing and advertising to make customers aware of available products and services Succeeding with Technology 18

E-Commerce from the Seller’s Perspective (continued) n n Sellers business practices q Providing a method for acquiring payments q Making arrangements for delivery of the product q Providing after-sales support Supply chain management q Involves three areas of focus: demand planning, supply planning, and demand fulfillment Succeeding with Technology 19

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Benefits and Challenges of ECommerce n n n Buyers enjoy the convenience of shopping from their desktop B 2 C e-commerce q Levels the playing field between large and small businesses Challenges q Established businesses must alter systems and business practices q Social concerns Succeeding with Technology 21

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E-Commerce Applications n E-Commerce q Playing an increasingly important role in our personal and professional lives q Allows us to discover new and interesting products q Allows us to find better deals q Used to monitor bank accounts and transfer electronic funds Succeeding with Technology 23

Retail E-Commerce: Shopping Online n n E-tailing provides customers with q Product information q The ability to comparison shop E-tailing options q Set up an electronic storefront q Lease space in a cybermall Succeeding with Technology 24

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Online Clearing Houses, Web Auctions, and Marketplaces n n n Provide a platform for businesses and individuals to sell their products and belongings www. ubid. com q Provides a method for manufacturers to liquidate stock and consumers to find a good deal e. Bay. com q Most popular auction/marketplace Succeeding with Technology 26

B 2 B Global Supply Management and Electronic Exchanges n Global supply management (GSM) q n Businesses can find the best deals on the global market Electronic exchange q q Provides convenient centralized platform for B 2 B ecommerce Promotes cooperation between competing companies Succeeding with Technology 27

Marketing n Web is used for q Unsolicited advertising q Access to product information through business Web sites q Market research Succeeding with Technology 28

Banking, Finance, and Investment n n n Online banking provides q Convenient access to bank balance information q Ability to transfer funds, pay bills, and obtain account histories Electronic funds transfer q Popular for paying bills and receiving paychecks Online brokerages q Able to execute trades fast, within seconds Succeeding with Technology 29

Mobile Commerce n n n A form of e-commerce Takes place over wireless mobile devices such as q Handheld computers and cell phones Presents unique opportunities and challenges Succeeding with Technology 30

M-Commerce Technology n Technologies and standards q Wireless Application Protocol (WAP) q Wireless Markup Language (WML) q Infrared or Bluetooth wireless networking technology Succeeding with Technology 31

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Types of M-Commerce Applications n Methods for delivering m-commerce services q Directly from cell phone service providers q Via mobile Internet or Web applications q Using Short Message Service (SMS) text messaging or Multimedia Messaging Service (MMS) q Using short-range wireless technology, such as infrared Succeeding with Technology 33

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E-Commerce Implementation n n Implementing e-commerce q Requires large investment and expertise E-Commerce host q Business that takes responsibility for setting up and maintaining an e-commerce system Succeeding with Technology 36

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Infrastructure n n E-Commerce requires significant infrastructure changes B 2 C e-commerce q Often connects manufacturers directly with consumers, cutting out the middleman q Requires shipping individual products directly to consumers Succeeding with Technology 39

Hardware and Networking n n n Underestimating the amount of Web traffic q Leads to network stalls and long wait times Typical e-commerce Web site q Employs one or more server computers and a highspeed Internet connection Outsourcing to a Web hosting company q Can operate 24 hours a day, 7 days a week Succeeding with Technology 40

Software n n n Web Server Software q Responds to requests for Web pages Web Server Utility Programs q Provide statistical information about server usage and Web site traffic patterns E-Commerce Software q Supports e-commerce activities q Includes catalog management, electronic shopping cart, and payment software Succeeding with Technology 41

Software (continued) n n n Web Site Design Tools q What see what you-get (WYSIWYG) applications or wizards Graphics Applications q Design and create graphic elements of Web sites Web Site Development Tools q Application programming interfaces (API’s) n Allow software engineers to develop Web-driven programs Succeeding with Technology 42

Software (continued) n Web services q Programs that automate tasks by communicating with each other over the Web q Systems developers can provide tools for automating trivial or repetitive tasks q Important in transaction processing Succeeding with Technology 43

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Building Traffic n n The 3 Cs Approach q Content, community, and commerce Keywords and Search Engines q Choose name and product names that best describe business purpose and features q Select descriptive domain names q Business-related keywords can be listed in the HTML meta tag Succeeding with Technology 45

Building Traffic (continued) n Marketing q q Online advertising methods include banner ads, pop -up ads, and e-mail Offline advertising methods include magazines, newspapers, radio, and television Succeeding with Technology 46

Electronic Payment Systems n Electronic cash (e-cash or digital cash) q Provides a private and secure method of transferring funds q Pay. Pal n n n Best-known e-cash provider E-cash benefits q Privacy - hides account information from vendors q Convenient if seller cannot process a credit card Smartcards q Credit cards with embedded microchips Succeeding with Technology 47

International Markets n n n Internet users of all nationalities will have access to your products First consideration of a global e-commerce strategy q Visitors of all nationalities and cultures should feel comfortable while viewing your Web content Costly approach q Create multiple versions of your Web site, each in a different language Succeeding with Technology 48

E-Commerce Security Issues n Digital certificate q A type of electronic business card q Attached to Internet transaction data q Verifies the sender of the data q Provided by certification authorities q Encryption n Uses high-level mathematical functions and computer algorithms to encode data Succeeding with Technology 49

Summary n n n E-Commerce q Systems that support electronically executed transactions Transaction processing system (TPS) q Supports and records transactions Three main types of e-commerce q Business-to-consumer (B 2 C) q Business-to-business (B 2 B) q Consumer-to-consumer (C 2 C) Succeeding with Technology 50

Summary (continued) n Retail Web sites Allow consumers to comparison shop Mobile commerce q A form of e-commerce that takes place over wireless mobile devices q n n E-Commerce q q Requires investment in networking, hardware, and a wide variety of software Requires changes in infrastructure Succeeding with Technology 51