Principles of Information Systems Chapter 8 Electronic and Mobile Commerce
Principles and Learning Objectives <ul><li>Electronic commerce and mobile commerce are evolving, providing new ways of con...
Principles and Learning Objectives (continued) <ul><li>E-commerce and m-commerce can be used in many innovative ways to im...
Why Learn About Electronic and Mobile Commerce? <ul><li>Most organizations have an Internet presence </li></ul><ul><ul><li...
An Introduction to Electronic Commerce <ul><li>Electronic commerce:  conducting business activities electronically over co...
Business-to-Business (B2B)  E-Commerce <ul><li>Subset of e-commerce </li></ul><ul><li>All the participants are organizatio...
Business-to-Consumer (B2C)  E-Commerce <ul><li>Form of e-commerce in which customers deal directly with an organization an...
Consumer-to-Consumer (C2C)  E-Commerce <ul><li>Subset of e-commerce that involves consumers selling directly to other cons...
E-Government <ul><li>Use of information and communications technology to simplify the sharing of information, speed former...
Multistage Model for E-commerce Figure 8.1: Multistage Model for E-Commerce (B2B and B2C)
Multistage Model for E-commerce (continued) Figure 8.2: Product and Information Flow for HP Printers Ordered over the Web
E-Commerce Challenges <ul><li>Defining an effective e-commerce model and strategy </li></ul><ul><ul><li>Community, content...
E-Commerce Challenges (continued) Figure 8.3: Three Basic Components of a Successful E-Commerce Model
E-Commerce Challenges (continued) Figure 8.4: Web-Based Order Processing Must Be Linked to Traditional Back-End Systems
An Introduction to Mobile Commerce <ul><li>Mobile commerce (m-commerce )  relies on the use of wireless devices, such as p...
Mobile Commerce in Perspective <ul><li>Only 12 to 14 percent of the world’s 1.8 billion mobile phone users have ever used ...
Technology Needed for Mobile Commerce <ul><li>Improved interface between the wireless device and its user </li></ul><ul><l...
Technology Needed for Mobile Commerce (continued) <ul><li>Wireless application protocol (WAP):  standard set of specificat...
Electronic and Mobile Commerce Applications <ul><li>Many B2B, B2C, C2C, and m-commerce applications are being used in: </l...
Retail and Wholesale <ul><li>Electronic retailing (e-tailing):  direct sale from business to consumer through electronic s...
Manufacturing (continued) Figure 8.5: Model of an Electronic Exchange
Investment and Finance <ul><li>Online stock trading </li></ul><ul><ul><li>Online tools for doing research and analysis </l...
Auctions <ul><li>eBay </li></ul><ul><ul><li>Has become synonymous with online auctions </li></ul></ul><ul><ul><li>Customer...
Anywhere, Anytime Applications of Mobile Commerce <ul><li>M-commerce devices are ideal for accessing personal information ...
Advantages of Electronic and Mobile Commerce <ul><li>Global reach: helps reduce gap between rich and poor countries </li><...
Threats to Electronic and Mobile Commerce <ul><li>Businesses must ensure that e-commerce and m-commerce transactions are s...
Security <ul><li>Methods to increase security </li></ul><ul><ul><li>Payment Card Industry security standard </li></ul></ul...
Theft of Intellectual Property <ul><li>Intellectual property:  works of the mind that are distinct somehow and are owned o...
Lack of Internet Access <ul><li>Digital divide:   difference between people who do and people who don’t have access or cap...
Legal Jurisdiction <ul><li>When conducting e-commerce, sales must not violate county, state, or country legal jurisdiction...
Strategies for Successful  E-Commerce <ul><li>Companies must develop effective Web sites that include the following charac...
Establishing a Web Site <ul><li>Web site hosting companies </li></ul><ul><ul><li>Allow you to set up a Web page and conduc...
Building Traffic to Your Web Site <ul><li>Obtain and register a domain name </li></ul><ul><li>Make your site search-engine...
Technology Infrastructure Required To Support E-commerce and  M-commerce <ul><li>Successful implementation of e-business r...
Technology Infrastructure Required To Support E-commerce and  M-commerce (continued) Figure 8.6: Key Technology Infrastruc...
Hardware <ul><li>Storage capacity and computing power required of the Web server depends on: </li></ul><ul><ul><li>Softwar...
E-Commerce Software <ul><li>E-commerce software tools </li></ul><ul><ul><li>Catalog management: provides standard format <...
E-Commerce Software (continued) Figure 8.7: Electronic Shopping Cart
Electronic Payment Systems <ul><li>Digital certificate:  attachment to an e-mail message or data embedded in a Web page th...
Electronic Payment Systems (continued) <ul><li>Credit card </li></ul><ul><li>Charge card </li></ul><ul><li>Debit card – ( ...
Summary   <ul><li>Electronic commerce (or e-commerce): conducting business activities electronically over computer networ...
Summary (continued)   <ul><li>Multistage model for e-commerce: includes search and identification, selection and negotiat...
Summary (continued) <ul><li>Issues affecting growth of e- and m-commerce: security, theft of intellectual property, fraud,...
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Ch08 c electronic and mobile commerce a (2)

  1. 1. Principles of Information Systems Chapter 8 Electronic and Mobile Commerce
  2. 2. Principles and Learning Objectives <ul><li>Electronic commerce and mobile commerce are evolving, providing new ways of conducting business that present both opportunities for improvement and potential problems </li></ul><ul><ul><li>Describe the current status of various forms of e-commerce, including B2B, B2C, and C2C </li></ul></ul><ul><ul><li>Outline a multistage purchasing model that describes how e-commerce works </li></ul></ul><ul><ul><li>Define m-commerce and identify some of its unique challenges </li></ul></ul>
  3. 3. Principles and Learning Objectives (continued) <ul><li>E-commerce and m-commerce can be used in many innovative ways to improve the operations of an organization </li></ul><ul><ul><li>Identify several e-commerce and m-commerce applications </li></ul></ul><ul><ul><li>Identify several advantages associated with the use of e-commerce and m-commerce </li></ul></ul>
  4. 4. Why Learn About Electronic and Mobile Commerce? <ul><li>Most organizations have an Internet presence </li></ul><ul><ul><li>Sales/marketing manager involved with e-commerce </li></ul></ul><ul><ul><li>Customer service employees help develop the Web site </li></ul></ul><ul><ul><li>Human resource or public relations manager may provide Web content for employees and investors </li></ul></ul><ul><li>Must learn about e-commerce and m-commerce </li></ul>
  5. 5. An Introduction to Electronic Commerce <ul><li>Electronic commerce: conducting business activities electronically over computer networks </li></ul><ul><li>Types of business activities that are strong candidates for conversion to e-commerce </li></ul><ul><ul><li>Paper based </li></ul></ul><ul><ul><li>Time-consuming </li></ul></ul><ul><ul><li>Inconvenient for customers </li></ul></ul>
  6. 6. Business-to-Business (B2B) E-Commerce <ul><li>Subset of e-commerce </li></ul><ul><li>All the participants are organizations </li></ul><ul><li>Useful tool for connecting business partners in a virtual supply chain to cut resupply times and reduce costs </li></ul>
  7. 7. Business-to-Consumer (B2C) E-Commerce <ul><li>Form of e-commerce in which customers deal directly with an organization and avoid intermediaries </li></ul><ul><ul><li>Squeezes costs and inefficiencies out of supply chain </li></ul></ul><ul><ul><li>Can lead to higher profits </li></ul></ul><ul><ul><li>Can lead to lower prices for consumers </li></ul></ul><ul><li>E-commerce via the Internet </li></ul><ul><ul><li>Many goods and services are cheaper online </li></ul></ul><ul><ul><li>The Internet allows consumers to easily compare prices, features, and value </li></ul></ul>
  8. 8. Consumer-to-Consumer (C2C) E-Commerce <ul><li>Subset of e-commerce that involves consumers selling directly to other consumers </li></ul><ul><li>Example: eBay </li></ul><ul><ul><li>Customers buy and sell items directly to each other through the site </li></ul></ul><ul><ul><li>181 million users buy and sell items valued at more than $44 billion </li></ul></ul><ul><li>Other popular online auction Web sites: Craigslist, uBid, Yahoo! Auctions, Onsale, and WeBidz </li></ul>
  9. 9. E-Government <ul><li>Use of information and communications technology to simplify the sharing of information, speed formerly paper-based processes, and improve the relationship between citizen and government </li></ul><ul><li>Forms of eGovernment </li></ul><ul><ul><li>Government-to-consumer (G2C) </li></ul></ul><ul><ul><li>Government-to-business (G2B) </li></ul></ul><ul><ul><li>Government-to-government (G2G) </li></ul></ul>
  10. 10. Multistage Model for E-commerce Figure 8.1: Multistage Model for E-Commerce (B2B and B2C)
  11. 11. Multistage Model for E-commerce (continued) Figure 8.2: Product and Information Flow for HP Printers Ordered over the Web
  12. 12. E-Commerce Challenges <ul><li>Defining an effective e-commerce model and strategy </li></ul><ul><ul><li>Community, content, and commerce </li></ul></ul><ul><li>Changing distribution systems and work processes to manage shipments of individual units directly to consumers </li></ul><ul><ul><li>B2C systems must be able to handle split-case distribution </li></ul></ul><ul><li>Integrating Web-based order processing with traditional systems </li></ul>
  13. 13. E-Commerce Challenges (continued) Figure 8.3: Three Basic Components of a Successful E-Commerce Model
  14. 14. E-Commerce Challenges (continued) Figure 8.4: Web-Based Order Processing Must Be Linked to Traditional Back-End Systems
  15. 15. An Introduction to Mobile Commerce <ul><li>Mobile commerce (m-commerce ) relies on the use of wireless devices, such as personal digital assistants, cell phones, and smart phones, to place orders and conduct business </li></ul><ul><li>Handset manufacturers are working with communications carriers to develop appropriate wireless devices, related technology, and services </li></ul><ul><li>Content providers and mobile service providers are working together more closely than ever </li></ul>
  16. 16. Mobile Commerce in Perspective <ul><li>Only 12 to 14 percent of the world’s 1.8 billion mobile phone users have ever used the Web from their phones </li></ul><ul><li>Internet Corporation for Assigned Names and Numbers (ICANN) created a .mobi domain to help attract mobile users to the Web </li></ul><ul><li>Market for m-commerce in North America is maturing much later than in Western Europe and Japan </li></ul>
  17. 17. Technology Needed for Mobile Commerce <ul><li>Improved interface between the wireless device and its user </li></ul><ul><li>Improved network speed </li></ul><ul><li>Security </li></ul><ul><ul><li>Encryption, digital certificates </li></ul></ul><ul><li>Web applications that are accessible for handheld users </li></ul>
  18. 18. Technology Needed for Mobile Commerce (continued) <ul><li>Wireless application protocol (WAP): standard set of specifications for Internet applications that run on handheld, wireless devices </li></ul><ul><ul><li>Effectively serves as a Web browser for such devices </li></ul></ul><ul><ul><li>Uses the Wireless Markup Language (WML), which is designed for effectively displaying information on small devices </li></ul></ul>
  19. 19. Electronic and Mobile Commerce Applications <ul><li>Many B2B, B2C, C2C, and m-commerce applications are being used in: </li></ul><ul><ul><li>Retail and wholesale </li></ul></ul><ul><ul><li>Manufacturing </li></ul></ul><ul><ul><li>Marketing </li></ul></ul><ul><ul><li>Investment and finance </li></ul></ul><ul><ul><li>Auction arenas </li></ul></ul>
  20. 20. Retail and Wholesale <ul><li>Electronic retailing (e-tailing): direct sale from business to consumer through electronic storefronts </li></ul><ul><ul><li>Electronic storefronts are typically designed around an electronic catalog and shopping cart model </li></ul></ul><ul><li>Cybermall: single Web site that offers many products and services at one Internet location </li></ul><ul><li>Manufacturing, repair, and operations (MRO) goods and services </li></ul>
  21. 21. Manufacturing (continued) Figure 8.5: Model of an Electronic Exchange
  22. 22. Investment and Finance <ul><li>Online stock trading </li></ul><ul><ul><li>Online tools for doing research and analysis </li></ul></ul><ul><li>Online banking </li></ul><ul><ul><li>Customers can check account balances, transfer money among accounts, pay bills, etc. </li></ul></ul><ul><ul><li>Electronic bill presentment </li></ul></ul>
  23. 23. Auctions <ul><li>eBay </li></ul><ul><ul><li>Has become synonymous with online auctions </li></ul></ul><ul><ul><li>Customer complaints: increased fees and problems with unscrupulous buyers </li></ul></ul><ul><ul><li>Constantly trying to expand and improve its services: Skype, Verisign </li></ul></ul><ul><li>Hundreds of other online auction sites </li></ul><ul><ul><li>Example: Priceline.com </li></ul></ul>
  24. 24. Anywhere, Anytime Applications of Mobile Commerce <ul><li>M-commerce devices are ideal for accessing personal information and receiving targeted messages for a particular consumer </li></ul><ul><li>Through m-commerce, companies can establish one-to-one marketing relationships with individual consumers anytime and anywhere </li></ul><ul><li>The most successful m-commerce applications suit local conditions and people’s habits and preferences </li></ul><ul><li>Examples: banking, stock trading, information services, retail, advertisements </li></ul>
  25. 25. Advantages of Electronic and Mobile Commerce <ul><li>Global reach: helps reduce gap between rich and poor countries </li></ul><ul><li>Reduces costs: increases speed and accuracy </li></ul><ul><li>Speeds the flow of goods and information </li></ul><ul><li>Increases accuracy: eliminates human data-entry error </li></ul><ul><li>Improves customer service: information about delivery status and ability to meet customer demand </li></ul>
  26. 26. Threats to Electronic and Mobile Commerce <ul><li>Businesses must ensure that e-commerce and m-commerce transactions are safe and consumers are protected </li></ul><ul><li>Number of threats to the continued growth of e-commerce and m-commerce </li></ul><ul><ul><li>Security, theft of intellectual property, fraud, invasion of privacy, lack of Internet access, return on investment, legal jurisdiction, taxation </li></ul></ul>
  27. 27. Security <ul><li>Methods to increase security </li></ul><ul><ul><li>Payment Card Industry security standard </li></ul></ul><ul><ul><li>Address Verification System </li></ul></ul><ul><ul><li>Card Verification Number technique </li></ul></ul><ul><ul><li>Visa’s Advanced Authorization process </li></ul></ul><ul><ul><li>Federal Financial Institutions Examination Council’s “Authentication in an Internet Banking Environment” guidelines </li></ul></ul><ul><ul><li>Biometric technology </li></ul></ul>
  28. 28. Theft of Intellectual Property <ul><li>Intellectual property: works of the mind that are distinct somehow and are owned or created by a single entity </li></ul><ul><ul><li>For example: books, films, music, processes, and software </li></ul></ul><ul><li>Copyright law protects authored works such as books, film, images, music, and software from unauthorized copying </li></ul><ul><li>Patents can protect software, business processes, formulae, compounds, and inventions </li></ul>
  29. 29. Lack of Internet Access <ul><li>Digital divide: difference between people who do and people who don’t have access or capability to use high-quality, modern information and communications technology to improve their standard of living </li></ul><ul><ul><li>Exists between: </li></ul></ul><ul><ul><ul><li>More and less developed countries </li></ul></ul></ul><ul><ul><ul><li>Economic classes </li></ul></ul></ul><ul><ul><ul><li>The educated and uneducated </li></ul></ul></ul><ul><ul><ul><li>Those who live in cities and those who live in rural areas </li></ul></ul></ul>
  30. 30. Legal Jurisdiction <ul><li>When conducting e-commerce, sales must not violate county, state, or country legal jurisdictions </li></ul><ul><li>Examples </li></ul><ul><ul><li>Selling stun guns and similar devices </li></ul></ul><ul><ul><li>Selling cigarettes or alcohol to underage customers </li></ul></ul>
  31. 31. Strategies for Successful E-Commerce <ul><li>Companies must develop effective Web sites that include the following characteristics: </li></ul><ul><ul><li>Easy to use </li></ul></ul><ul><ul><li>Accomplish the goals of the company </li></ul></ul><ul><ul><li>Safe and secure </li></ul></ul><ul><ul><li>Affordable to set up and maintain </li></ul></ul>
  32. 32. Establishing a Web Site <ul><li>Web site hosting companies </li></ul><ul><ul><li>Allow you to set up a Web page and conduct e-commerce within a matter of days </li></ul></ul><ul><ul><li>Little up-front cost </li></ul></ul><ul><li>Storefront broker: companies that act as middlemen between your Web site and online merchants that have the products and retail expertise </li></ul>
  33. 33. Building Traffic to Your Web Site <ul><li>Obtain and register a domain name </li></ul><ul><li>Make your site search-engine-friendly </li></ul><ul><ul><li>Meta tag: special HTML tag that contains keywords representing your site’s content </li></ul></ul><ul><ul><ul><li>Keywords are used by search engines to build indexes pointing to your Web site </li></ul></ul></ul><ul><li>Web site traffic data analysis software </li></ul><ul><li>Adapting Web site design for global consumers </li></ul>
  34. 34. Technology Infrastructure Required To Support E-commerce and M-commerce <ul><li>Successful implementation of e-business requires significant changes to existing business processes and substantial investment in IS technology </li></ul><ul><li>Poor Web site performance drives consumers to abandon some e-commerce sites in favor of those with better, more reliable performance </li></ul>
  35. 35. Technology Infrastructure Required To Support E-commerce and M-commerce (continued) Figure 8.6: Key Technology Infrastructure Components
  36. 36. Hardware <ul><li>Storage capacity and computing power required of the Web server depends on: </li></ul><ul><ul><li>Software that will run on the server </li></ul></ul><ul><ul><li>Volume of e-commerce transactions </li></ul></ul><ul><li>E-commerce solutions should be designed to be highly scalable </li></ul>
  37. 37. E-Commerce Software <ul><li>E-commerce software tools </li></ul><ul><ul><li>Catalog management: provides standard format </li></ul></ul><ul><ul><li>Product configuration: build product online to meet user needs </li></ul></ul><ul><ul><li>Shopping cart facilities </li></ul></ul><ul><ul><li>Transaction processing </li></ul></ul><ul><ul><li>Web traffic data analysis </li></ul></ul><ul><ul><li>Web services: software modules supporting specific business processes that users can interact with over a network as needed </li></ul></ul>
  38. 38. E-Commerce Software (continued) Figure 8.7: Electronic Shopping Cart
  39. 39. Electronic Payment Systems <ul><li>Digital certificate: attachment to an e-mail message or data embedded in a Web page that verifies the identity of a sender or a Web site </li></ul><ul><li>Certificate authority (CA): trusted third party that issues digital certificates </li></ul><ul><li>Secure Sockets Layer (SSL): communications protocol used to secure sensitive data </li></ul><ul><li>Electronic cash: amount of money that is computerized, stored, and used as cash for e-commerce transactions </li></ul>
  40. 40. Electronic Payment Systems (continued) <ul><li>Credit card </li></ul><ul><li>Charge card </li></ul><ul><li>Debit card – ( bank card or check card) </li></ul><ul><li>Smart card: a credit card–sized device with an embedded microchip to provide electronic memory and processing capability </li></ul>Debit Card Charge Card Credit Card
  41. 41. Summary  <ul><li>Electronic commerce (or e-commerce): conducting business activities electronically over computer networks </li></ul><ul><li>Types of e-commerce: business-to-consumer (B2C), business-to-business (B2B), and consumer-to-consumer (C2C) </li></ul><ul><li>E-Government: use of information and communications technology to simplify the sharing of information, speed formerly paper-based processes, and improve the relationship between citizen and government </li></ul>
  42. 42. Summary (continued)  <ul><li>Multistage model for e-commerce: includes search and identification, selection and negotiation, electronic purchasing, delivery, and after-sales service </li></ul><ul><li>Mobile commerce (m-commerce): uses wireless devices to place orders and conduct business </li></ul><ul><li>B2B, B2C, C2C, and m-commerce applications are being used in retail and wholesale, manufacturing, marketing, investment and finance, and auction arenas </li></ul>
  43. 43. Summary (continued) <ul><li>Issues affecting growth of e- and m-commerce: security, theft of intellectual property, fraud, invasion of consumer privacy, lack of Internet access, return on investment, legal jurisdiction, and taxation </li></ul><ul><li>An effective Web site should be easy to use, accomplish the goals of the company, be safe and secure, and be affordable to set up and maintain </li></ul><ul><li>Successful implementation of e-business requires significant changes to existing business processes and substantial investment in IS technology </li></ul>

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