Management Information Systems Sixth Edition Chapter 8 The

Management Information Systems, Sixth Edition Chapter 8: The Web-Enabled Enterprise

Objectives • Describe how the Web and high-speed Internet connections are changing business operations • Explain the functionality of various Web technologies • Compare and contrast options for Web servers • Explain basic business-to-business and business -to-consumer practices on the Web • Explain the relationship between Web technologies and supply chain management Management Information Systems, Sixth Edition 2

Objectives (continued) • Give examples of features and services that successful business Web sites offer • Learn about online annoyances such as spam and adware, and how to protect against online identity theft Management Information Systems, Sixth Edition 3

Web Business: Growing and Changing • DLA Piper LLP is the second largest law firm in the world – 3200 lawyers in 24 countries and 63 offices around the world – Uses e. Room, a Web-based collaboration and document-sharing tool from EMC Corp. – Saves 15, 000 labor hours annually, uses and mails significantly fewer paper documents, and reduces redundant work Management Information Systems, Sixth Edition 4

Web Technologies: A Review • Several standards and technologies enable the Web to deliver rich information, including: – HTTP, HTML, XML – File Transfer – RSS – Blogs – Wikis – Podcasting – IM – Cookies Management Information Systems, Sixth Edition 5

HTTP • Hypertext Transfer Protocol (HTTP): transfer and download Web information • HTTPS: HTTP secure for confidential data exchange • Uniform Resource Locator (URL): unique address given to each Web site – IP address: a special numeric address • Domain name: unique name for a Web site, constructed with letters – URL also refers to the domain name Management Information Systems, Sixth Edition 6

HTML and XML • Hypertext Markup Language (HTML): helps developer create Web pages – Determines look and location of content • Extensible Markup Language (XML): enables creation of various data types – Conveys the meaning or content of the data • XHTML: combination of XML and HTML – Uses opening and closing tags to control format Management Information Systems, Sixth Edition 7

Management Information Systems, Sixth Edition 8

File Transfer • File Transfer Protocol (FTP): used to transmit whole files – Used in all downloads from Web sites – Any type of file can be transferred – Can place files on a server for shared use – Often used to deliver purchased software products on Web sites Management Information Systems, Sixth Edition 9

RSS • Really Simple Syndication (RSS): family of XML file formats that allow automatic downloads of content on a subscription basis – Helps users check for updates – Communicates short descriptions of content – Allows transmittal of new information – Useful on news Web sites – Also called Rich Site Summary Management Information Systems, Sixth Edition 10

Blogs • Blog: contraction of “Web log” – Invites surfers to post opinions and art – Focuses on a topic or set of topics – Trackback: a tool that notifies bloggers when their posts have been mentioned elsewhere on the Web • Blogs are often used by businesses • Importance of blogs to commercial organizations is to find out what blog participants think and say about the organization Management Information Systems, Sixth Edition 11

Wikis • Wiki (from Hawaiian, meaning “quick”): Web application that enables users to add to and edit the contents of Web pages – All the software required to edit the Web pages is embedded in the pages themselves • Wikipedia: a popular online encyclopedia • Wiki technology is a popular ingredient in groupware (software used for collaboration) Management Information Systems, Sixth Edition 12

Management Information Systems, Sixth Edition 13

Podcasting • Podcast: publishing sound and video on the Web for download – Usually on a subscription basis • Uses include: – “Time-shifted” broadcast of radio station programs for later listening – Audio tours in museums – Lectures in distance learning courses – Garageband. com • Allows aspiring musicians to post music tracks Management Information Systems, Sixth Edition 14

Instant Messaging • Instant messaging (IM): real-time chat – Form of synchronized e-mail – Chat room: communicate with a group – Free applications for IM include: • • • AIM: AOL instant Messenger Yahoo Messenger MSN Messenger ICQ Trillian – Business uses • Customers can chat with sales or support reps Management Information Systems, Sixth Edition 15

Management Information Systems, Sixth Edition 16

Cookies • Cookie: small file that stores information about a Web site visitor, stored on the visitor’s computer – Usually records the surfer’s ID – Often stores the surfer’s preferences – Provides convenience to consumers – Can be temporary (single session) or permanent – Potential for intrusion into surfer privacy • Clickstream tracking: tracks a surfer’s clicking activities • Spyware: traces and reports online behavior Management Information Systems, Sixth Edition 17

Proprietary Technologies • Proprietary technology: intellectual property of developer, not free for all to use • Examples: – Local search engine – Shopping cart applications – Wish lists – Video streaming tools – Tools to analyze and predict Web visitor behavior, especially shopper behavior Management Information Systems, Sixth Edition 18

Web-Enabled Business • Web-enabled business are classified according to the interacting parties: – Business-to-business (B 2 B) – Business-to-consumer (B 2 C) – Government-to-business – Government-to-consumer Management Information Systems, Sixth Edition 19

B 2 B Trading • Business-to-business (B 2 B): trading between businesses only • B 2 B forms include advertising through: – Search advertising: advertisements placed on a search site result page – Banners: images placed on Web sites that link to a company site selling a product or service • Impression: occurs when a page with a banner is downloaded • Reach percentage: the percentage of Web users who visited a site in the past month Management Information Systems, Sixth Edition 20

Management Information Systems, Sixth Edition 21

B 2 B Trading (continued) • Exchanges and auctions act as online marketplaces • Intranet: network used only by employees of an organization • Extranet: network shared by employees of different organizations, usually business partners • Exchange: extranet for organizations that deal in products and services of a particular type – Exchange operator profits from transaction fees • Auction: sells a great variety of items Management Information Systems, Sixth Edition 22

Management Information Systems, Sixth Edition 23

B 2 B Trading (continued) • Online business alliances: collaboration between businesses in establishing a Web site – Site operator works for the allied companies – Suppliers are invited to sell through the site and compete among themselves, driving prices down Management Information Systems, Sixth Edition 24

B 2 C Trading • Business-to-consumer (B 2 C): trading with the general public • E-Tailing: online retailing to consumers • Fulfillment activities: picking, packing, shipping • Consumer profiling: know customers better by gathering information about their online activities – Some consider this a violation of privacy • Conversion rate: the proportion of site visitors who make a purchase Management Information Systems, Sixth Edition 25

Management Information Systems, Sixth Edition 26

Management Information Systems, Sixth Edition 27

B 2 C Trading (continued) • Auction sites serve as a hub for consumers to buy and sell • Reverse auction: customers name their own price for desired goods and services • Content providers: offer information, artistic work, classified ads, and video • Electronic bill presentment and payment (EBBP): provides online bills and payment options for customers • Phishing: type of fraud involving a fake Web site Management Information Systems, Sixth Edition 28

Management Information Systems, Sixth Edition 29

Management Information Systems, Sixth Edition 30

B 2 C Trading (continued) • Extra-organizational workforce: – Companies purchase labor from a larger pool • Mobile commerce, or M-commerce: – Business conducted on mobile devices • Many experts believe that information delivery is the main mobile application, not commerce – Exceptions are Japan and South Korea – Japan’s Do. Co. Mo’s i-mode service allows users of smart cell phones to purchase canned soda from vending machines, fast food Management Information Systems, Sixth Edition 31

B 2 C Trading (continued) • M-commerce also raises privacy concerns – GPS provides location tracking • New top-level domain names with. mobi available for mobile applications – Sites should use special technologies to optimize content for easy viewing on mobile devices • Virtual world: a combination of images, video, sound, and avatars that resemble the real world – Accessible for interaction by subscribers • Avatar: 3 D graphical character that represents a user in a virtual world Management Information Systems, Sixth Edition 32

Supply Chains on the Web • Supply chain management (SCM) systems may be connected to the Web to allow suppliers to participate directly – Use of XML allows companies to set standards for data exchange • Electronic Data Interchange (EDI): a system used prior to the Web to exchange documents electronically – Set standards for data formats – EDI networks are owned and managed by valueadded network (VAN) companies Management Information Systems, Sixth Edition 33

Management Information Systems, Sixth Edition 34

Options in Establishing a Web Site • Web site: Web pages that make up information and links • Internet server: a computer connected to the Internet backbone • Businesses have two choices for a Web site: – Installing and maintaining their own Web servers – Contracting with a Web hosting service Management Information Systems, Sixth Edition 35

Owning and Maintaining a Server • Owning and maintaining Web servers is costly – Provides the greatest degree of control, but requires expertise to set up and maintain – Must obtain a high-speed link to the Web • Load balancing: transfer data requests from a busy server to a less busy server • Mirror servers: servers with duplicated content • Pure-play: company whose entire business is online • Brick-and-mortar: company that owns physical stores and a Web site Management Information Systems, Sixth Edition 36

Using a Hosting Service • Web hosting: Web server managing service • Several types of Web hosting: – Shared hosting: stores the client’s Web site on the same physical server as other clients – Virtual private hosting: simulates a single server, allowing a client to have its own domain name – Dedicated hosting: client has exclusive use of an entire physical Web server – Co-location: server owned and managed by a client is co-located with other clients’ servers in a secure physical location Management Information Systems, Sixth Edition 37

Considerations in Selecting a Web Host • Compare host vendors using a point system • Dynamic Web pages: enable communication between browser and database • Factors to consider when selecting Web host: – Allows use of database management system – Storage space capacity – Technical and Web site design support – Scalability – Security: physical and virtual Management Information Systems, Sixth Edition 38

Considerations in Selecting a Web Host (continued) • Factors to consider when selecting Web host (continued): – Availability: minimize downtime – Costs, including: • Setup fees • Traffic-based fees • Monthly fees Management Information Systems, Sixth Edition 39

Management Information Systems, Sixth Edition 40

More Than Meets the Eye • Several elements are essential to conducting business on the Web: – Inquiry interface: connects to database to allow user to search a catalog of products or services – Order processing application, including: • Credit-card verification application – Order-fulfillment system: picks, packs, and ships Management Information Systems, Sixth Edition 41

Management Information Systems, Sixth Edition 42

Rules for Successful Web-Based Business • Business success depends on availability and use of software • Elements needed to support B 2 C commerce: – Targeting customers – Capturing the customer’s complete experience – Personalizing the service – Shortening the business cycle – Let customers help themselves – Be proactive and de-commoditize Management Information Systems, Sixth Edition 43

Target the Right Customers • Target customers needing your products and services – Most important effort of marketing • Involves identifying the sites that your audience frequently visits • Consider blogs and podcasting sites for advertisement placement Management Information Systems, Sixth Edition 44

Capture the Customer’s Total Experience • Use cookies to record shopper’s movements within the site • Use CRM software to create consumer profiles • Shopper experience becomes an asset of business, allowing: – Fine-tuning of the product portfolio – Tailoring of Web pages to individual customers – Individual e-mails to shopper offering products of interest Management Information Systems, Sixth Edition 45

Personalize the Service • CRM software and Web page customization software can be combined to: – Personalize Web pages shown to a customer – Allow the customer to select the type of e-mail content desired – Respect visitor privacy by offering opt-in rather than opt-out – Allow the customer to tailor products to be purchased Management Information Systems, Sixth Edition 46

Shorten the Business Cycle • Business on the Web saves time for customers • Fulfillment is a major challenge for businesses – Activities after customer places order • Fast shipping is desired because: – It produces higher customer satisfaction – Business collects payments faster • Can outsource the entire fulfillment task to fulfillment organizations such as: – UPS’s e-Logistics – Fed. Ex’s Supply Chain Services Management Information Systems, Sixth Edition 47

Let Customers Help Themselves • Customers need information from organization: – Status of order – Status of shipped item – Installation instructions – Troubleshooting • E-mail messages sent to customers with information about orders and how to track them • FAQs online allow customers to find answers to common questions Management Information Systems, Sixth Edition 48

Be Proactive and De-Commoditize • Prompt e-mail replies expected • Proactive alerts expected for changes in orders or services, or product recalls • Automatic reordering features are desirable • Must take initiatives to de-commoditize products – Commodity: a product sold at roughly the same price by many vendors (no differentiation) – Addition of features or services prevents a product from becoming a commodity by creating differentiation Management Information Systems, Sixth Edition 49

E-Commerce is Every Commerce • Web technologies have been highly integrated into the business world – Difficult to identify which business activities are on the Internet and which are not • Web has been highly integrated into daily activities of customers also • Commerce and e-commerce generally have the same meaning today Management Information Systems, Sixth Edition 50

Summary • Some industries have changed drastically because of the Web • HTTP is an Internet standard controlling Web server addresses • HTTPS is a security version of HTTP • XML is a standard for description of data • Blogs enable people to create discussion Web pages Management Information Systems, Sixth Edition 51

Summary (continued) • Cookies help Web sites personalize the visitor’s experience • Many Web technologies are proprietary • A business can maintain its own Web server or use a Web hosting service • Organizations should consider several factors when selecting a Web host • Web-enabled commerce is classified into B 2 B and B 2 C Management Information Systems, Sixth Edition 52

Summary (continued) • B 2 B trading relies on electronic data interchange (EDI) and XML • Wireless handheld computers allow mobile commerce, called m-commerce • Online businesses must adhere to several factors to be successful • Virtual worlds provide a means to meet and conduct business and social activities on the Web • Spam and spyware online annoyances • Phishing is a pervasive fraud crime Management Information Systems, Sixth Edition 53