Chapter 08:    E-CommerceMELJUN CORTES
Objectives• Define e-commerce and understand its role as a  transaction processing system• List the three types of e-comme...
Objectives• Define m-commerce, and describe several m-  commerce services• List the components of an e-commerce system,  a...
Chapter Content•   The Roots of E-Commerce•   Overview of Electronic Commerce•   E-Commerce Applications•   Mobile Commerc...
Electronic Commerce• Electronic commerce (e-commerce)  – Systems that support electronically executed    business transact...
Electronic Commerce• Electronic commerce (e-commerce)              Succeeding with Technology, Third Edition   6
Electronic Commerce          Succeeding with Technology, Third Edition   7
E-Commerce History• EDI  – Uses private communications networks (VANs) to    transmit standardized transaction data betwee...
E-Commerce History          Succeeding with Technology, Third Edition   9
Transaction Processing• Transaction   – An exchange involving goods or services• Transaction processing system (TPS)   – I...
The Transaction Processing Cycle• Data collection  – The process of capturing transaction related data• Data editing  – Ch...
The Transaction Processing Cycle• Data manipulation  – Processing transaction data• Data storage  – Altering databases to ...
The Transaction Processing Cycle           Succeeding with Technology, Third Edition   13
Different Transaction Processing forDifferent Needs• Order processing system  – Supports the sales of goods or services to...
Different Transaction Processing forDifferent Needs              Succeeding with Technology, Third Edition   15
Types of E-Commerce• Business-to-consumer e-commerce (B2C)  – Connects individual consumers with sellers , cutting out    ...
Types of E-Commerce          Succeeding with Technology, Third Edition   17
E-Commerce from the Buyer’s Perspective• Process of buying or acquiring goods or services  – Realizing a need  – Researchi...
E-Commerce from the Buyer’s Perspective            Succeeding with Technology, Third Edition   19
E-Commerce from the Seller’s Perspective• Sellers business practices  – Market research to identify customer needs  – Manu...
E-Commerce from the Seller’s Perspective• Sellers business practices  – Providing a method for acquiring payments  – Makin...
E-Commerce from the Seller’s Perspective             Succeeding with Technology, Third Edition   22
Benefits and Challenges of E-Commerce• Buyers enjoy the convenience of shopping from  their desktop• B2C e-commerce  – Lev...
Benefits and Challenges of E-Commerce             Succeeding with Technology, Third Edition   24
E-Commerce Applications• E-Commerce  – Playing an increasingly important role in our personal    and professional lives  –...
Retail E-Commerce: Shopping Online• E-tailing provides customers with  – Product information  – The ability to comparison ...
Retail E-Commerce: Shopping Online           Succeeding with Technology, Third Edition   27
Online Clearing Houses, Web Auctions,and Marketplaces• Provide a platform for businesses and individuals  to sell their pr...
B2B Global Supply Managementand Electronic Exchanges• Global supply management (GSM)  – Businesses can find the best deals...
Marketing• Web is used for  – Unsolicited advertising     • Banner: A rectangular area embedded in the Web page content   ...
Marketing            Succeeding with Technology, Third Edition   31
Banking, Finance, and Investment• Online banking provides  – Convenient access to bank balance information  – Ability to t...
Mobile Commerce (M- Commerce)• A form of e-commerce• Takes place over wireless mobile devices such as  – Handheld computer...
Mobile Commerce         Succeeding with Technology, Third Edition
M-Commerce Technology• Technologies and standards  – Wireless Application Protocol (WAP)     • a communication standard us...
Types of M-Commerce Applications• Methods for delivering m-commerce services  – Directly from cell phone service providers...
Types of M-Commerce Applications           Succeeding with Technology, Third Edition   37
E-Commerce Implementation• Implementing e-commerce  – Requires large investment and expertise• E-Commerce host  – A compan...
Infrastructure• E-Commerce requires significant infrastructure  changes• Businesses must have employees who are  technical...
Infrastructure           Succeeding with Technology, Third Edition   40
Hardware and Networking• Underestimating the amount of Web traffic  – Leads to network stalls and long wait times• Typical...
Software• Web Server Software  – Responds to requests for Web pages• Web Server Utility Programs  – Provide statistical in...
Software• Web Site Design Tools  – What-you-see-is-what-you-get (WYSIWYG)    applications or wizards• Graphics Application...
Software• Web services  – Programs that automate tasks by communicating    with each other over the Web  – Systems develop...
Building Traffic• The 3Cs Approach  – Content, community, and commerce• Keywords and Search Engines  – Choose name and pro...
Building Traffic• Marketing  – Online advertising methods include banner ads, pop-    up ads, and e-mail  – market segment...
Building Traffic            Succeeding with Technology, Third Edition   47
Electronic Payment System• proximity payment system   – allows customers to transfer funds wirelessly between their mobile...
Electronic Payment System          Succeeding with Technology, Third Edition   49
Electronic Payment System          Succeeding with Technology, Third Edition   50
International Markets• Internet users of all nationalities will have access to your  products• First consideration of a gl...
E-Commerce Security Issues• There are significant privacy and security  concerns  – Public network  – No buyer or seller i...
E-Commerce Security Issues• Digital certificate   – A type of electronic business card   – Attached to Internet transactio...
E-Commerce Security Issues• Securing data in transit  – Secure Sockets Layer (SSL)     • Digital certificates combined all...
E-Commerce Security Issues          Succeeding with Technology, Third Edition   55
Business Resumption Planning• Great pains are taken to ensure that transaction  processing systems remain in working order...
Summary• E-Commerce  – Systems that support electronically executed    transactions• Transaction processing system (TPS)  ...
Summary• Retail Web sites  – Allow consumers to comparison shop• Mobile commerce  – A form of e-commerce that takes place ...
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MELJUN CORTES E Commerce 1

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MELJUN CORTES E Commerce 1

  1. 1. Chapter 08: E-CommerceMELJUN CORTES
  2. 2. Objectives• Define e-commerce and understand its role as a transaction processing system• 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• Discuss several examples of e-commerce applications and services Succeeding with Technology, Third Edition 2
  3. 3. Objectives• Define m-commerce, and describe several m- commerce services• List the components of an e-commerce system, and explain how they function together to provide e-commerce services Succeeding with Technology, Third Edition 3
  4. 4. Chapter Content• The Roots of E-Commerce• Overview of Electronic Commerce• E-Commerce Applications• Mobile Commerce• E-Commerce Implementation Succeeding with Technology, Third Edition 4
  5. 5. Electronic Commerce• Electronic commerce (e-commerce) – Systems that support electronically executed business transactions – The fundamental purpose of e-commerce is to execute transactions Succeeding with Technology, Third Edition 5
  6. 6. Electronic Commerce• Electronic commerce (e-commerce) Succeeding with Technology, Third Edition 6
  7. 7. Electronic Commerce Succeeding with Technology, Third Edition 7
  8. 8. E-Commerce History• EDI – Uses private communications networks (VANs) to transmit standardized transaction data between business partners and suppliers• Automating transactions using EDI – Drastically reduced the amount of paperwork and the need for human intervention• Internet – Provided the ideal platform for conducting EDI transactions Succeeding with Technology, Third Edition 8
  9. 9. E-Commerce History Succeeding with Technology, Third Edition 9
  10. 10. Transaction Processing• Transaction – An exchange involving goods or services• Transaction processing system (TPS) – Information system used to support and record transactions such as paying for products or paying an employee (e.g. payroll system that calculates an employee’s pay and cuts a check) – transaction processing systems share a common set of activities called the transaction processing cycle• Batch processing – Transactions are collected over time and processed together in batches – useful in situations where transactions take place away from the computer system• Online transaction processing – Takes place at the point of sale – critical to time-sensitive transactions such as selling concert tickets and making flight reservations Succeeding with Technology, Third Edition 10
  11. 11. The Transaction Processing Cycle• Data collection – The process of capturing transaction related data• Data editing – Checking the validity of data entered• Data correction – Implemented if an error is found in the entered data Succeeding with Technology, Third Edition 11
  12. 12. The Transaction Processing Cycle• Data manipulation – Processing transaction data• Data storage – Altering databases to reflect the transaction• Data output – Receipts, picking lists, and other documents Succeeding with Technology, Third Edition 12
  13. 13. The Transaction Processing Cycle Succeeding with Technology, Third Edition 13
  14. 14. Different Transaction Processing forDifferent Needs• Order processing system – Supports the sales of goods or services to customers – Arranges for shipment of products• Purchasing system – Supports the purchase of goods and raw materials from suppliers Succeeding with Technology, Third Edition 14
  15. 15. Different Transaction Processing forDifferent Needs Succeeding with Technology, Third Edition 15
  16. 16. Types of E-Commerce• Business-to-consumer e-commerce (B2C) – Connects individual consumers with sellers , cutting out the middleman – E.g. Amazon.com• Business-to-business e-commerce (B2B) – Supports business transactions on across private networks, the Internet, and the Web• Consumer-to-consumer e-commerce (C2C) – Connects individual sellers with people shopping for used items – E.g. ebay.com Succeeding with Technology, Third Edition 16
  17. 17. Types of E-Commerce Succeeding with Technology, Third Edition 17
  18. 18. E-Commerce from the Buyer’s Perspective• Process of buying or acquiring goods or services – Realizing a need – Researching a product – Selecting a vendor – Providing payment – Accepting delivery – Using product support Succeeding with Technology, Third Edition 18
  19. 19. E-Commerce from the Buyer’s Perspective Succeeding with Technology, Third Edition 19
  20. 20. E-Commerce from the Seller’s Perspective• Sellers business practices – Market research to identify customer needs – Manufacturing products or supplying services that meet customer needs – Marketing and advertising to make customers aware of available products and services Succeeding with Technology, Third Edition 20
  21. 21. E-Commerce from the Seller’s Perspective• Sellers business practices – Providing a method for acquiring payments – Making arrangements for delivery of the product – Providing after-sales support• Supply chain management – From the seller’s perspective, the process of producing and selling goods – Involves three areas of focus: demand planning, supply planning, and demand fulfillment • Demand fulfillment: process of getting the product or service to the customer Succeeding with Technology, Third Edition 21
  22. 22. E-Commerce from the Seller’s Perspective Succeeding with Technology, Third Edition 22
  23. 23. Benefits and Challenges of E-Commerce• Buyers enjoy the convenience of shopping from their desktop• B2C e-commerce – Levels the playing field between large and small businesses• Challenges – Established businesses must alter systems and business practices – Security, privacy, reliability: E-commerce can survive only if all involved can trust the system – Social concerns Succeeding with Technology, Third Edition 23
  24. 24. Benefits and Challenges of E-Commerce Succeeding with Technology, Third Edition 24
  25. 25. E-Commerce Applications• E-Commerce – Playing an increasingly important role in our personal and professional lives – Allows us to discover new and interesting products – Allows us to find better deals – Used to monitor bank accounts and transfer electronic funds Succeeding with Technology, Third Edition 25
  26. 26. Retail E-Commerce: Shopping Online• E-tailing provides customers with – Product information – The ability to comparison shop• E-tailing options – Set up an electronic storefront – Lease space in a cybermall • Web site that allows users to browse through a wide variety of products offered by several different retailers Succeeding with Technology, Third Edition 26
  27. 27. Retail E-Commerce: Shopping Online Succeeding with Technology, Third Edition 27
  28. 28. Online Clearing Houses, Web Auctions,and Marketplaces• Provide a platform for businesses and individuals to sell their products and belongings – www.ubid.com • Provides a method for manufacturers to liquidate stock and consumers to find a good deal – eBay.com • Most popular auction/marketplace Succeeding with Technology, Third Edition 28
  29. 29. B2B Global Supply Managementand Electronic Exchanges• Global supply management (GSM) – Businesses can find the best deals for raw materials and supplies needed to manufacture their products on the global market• Electronic exchange – an industry-specific Web resource created to provide a convenient centralized platform for B2B e-commerce among manufacturers, suppliers, and customers – Promotes cooperation between competing companies Succeeding with Technology, Third Edition 29
  30. 30. Marketing• Web is used for – Unsolicited advertising • Banner: A rectangular area embedded in the Web page content for advertising, often across the top of the page – Access to product information through business Web sites • Get better deals and make informed decisions – Market research • Traditionally done by interviewing customers • Market segmentation divides customer opinions based on various criteria • E-commerce allows market segmentation to take place on an individual level Succeeding with Technology, Third Edition 30
  31. 31. Marketing Succeeding with Technology, Third Edition 31
  32. 32. Banking, Finance, and Investment• Online banking provides – Convenient access to bank balance information – Ability to transfer funds, pay bills, and obtain account histories• Electronic funds transfer – Popular for paying bills and receiving paychecks• Online brokerages – Able to execute trades fast, within seconds Succeeding with Technology, Third Edition 32
  33. 33. Mobile Commerce (M- Commerce)• A form of e-commerce• Takes place over wireless mobile devices such as – Handheld computers and cell phones – takes place in emerging technologies such as dashtop computers embedded in automobile dashboards• Presents unique opportunities and challenges Succeeding with Technology, Third Edition 33
  34. 34. Mobile Commerce Succeeding with Technology, Third Edition
  35. 35. M-Commerce Technology• Technologies and standards – Wireless Application Protocol (WAP) • a communication standard used by developers to create m- commerce applications – Wireless Markup Language (WML) – Infrared or Bluetooth wireless networking technology • Near Field Communications (NFC)• Open Mobile Alliance (OMA) – Hundreds of mobile operators, device and network suppliers and companies have joined together to create standards and interoperability between mobile devices Succeeding with Technology, Third Edition 35
  36. 36. Types of M-Commerce Applications• Methods for delivering m-commerce services – Directly from cell phone service providers – Via mobile Internet or Web applications • Location-based m-commerce applications – Using Short Message Service (SMS) text messaging or Multimedia Messaging Service (MMS) – Using short-range wireless technology, such as infrared • Proximity payment system Succeeding with Technology, Third Edition 36
  37. 37. Types of M-Commerce Applications Succeeding with Technology, Third Edition 37
  38. 38. E-Commerce Implementation• Implementing e-commerce – Requires large investment and expertise• E-Commerce host – A company that takes on some or all of the responsibility of setting up and maintaining an e- commerce system for a business or organization Succeeding with Technology, Third Edition 38
  39. 39. Infrastructure• E-Commerce requires significant infrastructure changes• Businesses must have employees who are technically savvy• B2C e-commerce – Often connects manufacturers directly with consumers, cutting out the middleman – Requires shipping individual products directly to consumers Succeeding with Technology, Third Edition 39
  40. 40. Infrastructure Succeeding with Technology, Third Edition 40
  41. 41. Hardware and Networking• Underestimating the amount of Web traffic – Leads to network stalls and long wait times• Typical e-commerce Web site – Employs one or more server computers and a high- speed Internet connection• Outsourcing to a Web hosting company – Can operate 24 hours a day, 7 days a week – Load-balancing Succeeding with Technology, Third Edition 41
  42. 42. Software• Web Server Software – Responds to requests for Web pages• Web Server Utility Programs – Provide statistical information about server usage and Web site traffic patterns• E-Commerce Software – Supports e-commerce activities – Includes catalog management, electronic shopping cart, and payment software Succeeding with Technology, Third Edition 42
  43. 43. Software• Web Site Design Tools – What-you-see-is-what-you-get (WYSIWYG) applications or wizards• Graphics Applications – Design and create graphic elements of Web sites• Web Site Development Tools – Application programming interfaces (API’s) • Allow software engineers to develop Web-driven programs Succeeding with Technology, Third Edition 43
  44. 44. Software• Web services – Programs that automate tasks by communicating with each other over the Web – Systems developers can provide tools for automating trivial or repetitive tasks – Important in transaction processing Succeeding with Technology, Third Edition 44
  45. 45. Building Traffic• The 3Cs Approach – Content, community, and commerce• Keywords and Search Engines – Choose name and product names that best describe business purpose and features – Select descriptive domain names – Business-related keywords can be listed in the HTML meta tag • Read by search engines and servers, but not displayed on the page Succeeding with Technology, Third Edition 45
  46. 46. Building Traffic• Marketing – Online advertising methods include banner ads, pop- up ads, and e-mail – market segmentation: customer opinions are divided into demographic variables such as race, gender, income, education, and age to determine which segment a product appeals to most – Offline advertising methods include magazines, newspapers, radio, and television Succeeding with Technology, Third Edition 46
  47. 47. Building Traffic Succeeding with Technology, Third Edition 47
  48. 48. Electronic Payment System• proximity payment system – allows customers to transfer funds wirelessly between their mobile device and a point-of-sale terminal• Electronic cash (e-cash or digital cash) – Provides a private and secure method of transferring funds from a bank account or credit card to online vendors or individuals – PayPal • Best-known e-cash provider• E-cash benefits – Privacy - hides account information from vendors – Convenient if seller cannot process a credit card• Smartcards – Credit cards with embedded microchips that can store and process data and can be used as electronic wallets Succeeding with Technology, Third Edition 48
  49. 49. Electronic Payment System Succeeding with Technology, Third Edition 49
  50. 50. Electronic Payment System Succeeding with Technology, Third Edition 50
  51. 51. International Markets• Internet users of all nationalities will have access to your products• First consideration of a global e-commerce strategy – Visitors of all nationalities and cultures should feel comfortable while viewing your Web content• Costly approach – Create multiple versions of your Web site, each in a different language• Once the international market is won over, e-tailer faces other challenges – Foreign Currency, shipping, national taxes Succeeding with Technology, Third Edition 51
  52. 52. E-Commerce Security Issues• There are significant privacy and security concerns – Public network – No buyer or seller identity verification – Hacker attacks Succeeding with Technology, Third Edition 52
  53. 53. E-Commerce Security Issues• Digital certificate – A type of electronic business card – Attached to Internet transaction data – Verifies the sender of the data – Provided by certification authorities – Encryption • Uses high-level mathematical functions and computer algorithms to transform data so that it is unintelligible to all but the intended recipient Succeeding with Technology, Third Edition 53
  54. 54. E-Commerce Security Issues• Securing data in transit – Secure Sockets Layer (SSL) • Digital certificates combined allows for encrypted communications to occur between Web browser and Web server – Transport Layer Security (TLS) • A URL associated with this begins with https • Allow for encrypted communication to occur between browsers and servers • Secures usernames, passwords, credit card information Succeeding with Technology, Third Edition 54
  55. 55. E-Commerce Security Issues Succeeding with Technology, Third Edition 55
  56. 56. Business Resumption Planning• Great pains are taken to ensure that transaction processing systems remain in working order• Business resumption planning (BRP) – Takes into account every possible disaster and provides courses of action to minimize negative effects – The goal is to protect data and keep key systems operating until order is resumed Succeeding with Technology, Third Edition 56
  57. 57. Summary• E-Commerce – Systems that support electronically executed transactions• Transaction processing system (TPS) – Supports and records transactions• Three main types of e-commerce – Business-to-consumer (B2C) – Business-to-business (B2B) – Consumer-to-consumer (C2C) Succeeding with Technology, Third Edition 57
  58. 58. Summary• Retail Web sites – Allow consumers to comparison shop• Mobile commerce – A form of e-commerce that takes place over wireless mobile devices• E-Commerce – Requires investment in networking, hardware, and a wide variety of software – Requires changes in infrastructure Succeeding with Technology, Third Edition 58

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