This document outlines Chapter 8 from the textbook "Principles of Information Systems, Sixth Edition" which discusses electronic commerce (e-commerce). It introduces the key concepts of e-commerce including business-to-consumer, business-to-business, and consumer-to-consumer models. It also describes the multistage process of e-commerce transactions from search and selection to delivery. Additionally, it covers the necessary technology infrastructure to support e-commerce like hardware, software, and electronic payment systems. Lastly, it discusses threats to e-commerce such as fraud and privacy issues and strategies for organizations to successfully implement e-commerce.

1. Principles of Information Systems,
Sixth Edition
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Electronic Commerce
Chapter 8

2. Principles of Information Systems,
Sixth Edition
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Chapter 8 Outline
• An Introduction to Electronic
Commerce
• E-Commerce Applications
• Technology Infrastructure
• Electronic Payment Systems
• Threats to E-Commerce
• Strategies for Successful e-
Commerce

3. Principles of Information Systems,
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An Introduction to
Electronic Commerce

4. Principles of Information Systems,
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Introduction to Electronic Commerce
• Most common types of e-commerce:
• Business-to-consumer (B2C) e-
commerce
• Business-to-business (B2B) e-
commerce
• Consumer-to-consumer (C2C) e-
commerce

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Multistage Model for E-commerce
• 1. Search and identification
• 2. Selection and negotiation
• 3. Purchasing products and
services electronically
• 4. Product and service delivery
• 5. After-sales service

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Multistage Model for E-commerce

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Product and Service Delivery

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E-Commerce Model

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E-Commerce Challenges
• Changing distribution systems & work
processes
• Split-case distribution
• Integrating web-based order processing
with traditional systems

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The E-Commerce Supply Chain
• Supply chain management
– Demand planning
– Supply planning
– Demand fulfillment
• Increased revenues and decreased
costs
• Improved customer satisfaction
• Inventory reduction across the supply
chain

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The E-Commerce Supply Chain

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Supply Chain Management

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Business-to-Business
• Allows manufacturers to buy at low price
worldwide
• Enterprise can sell to a global market

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Global E-Commerce
• Steps in localization
– recognizing and conforming to the
nuances, subtleties, and tastes of
local cultures
– supporting basic trade laws such as
each country’s currency, payment
preferences, taxes, and tariffs
– ensuring that technological
capabilities match local connection
speeds

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Global E-Commerce
• Determine which global markets make
the most sense for selling products or
services on-line
• Decide whether Web content should be
generated or updated centrally or locally

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E-Commerce Applications

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Retail and Wholesale
• Electronic retailing
• Cybermalls
• Wholesale e-commerce: B2B

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Manufacturing

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Marketing
• Market segmentation
• Technology-enabled relationship
management

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Investment and Finance
• On-line stock trading
• On-line banking
– Electronic bill presentment

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Investment and Finance

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Investment and Finance

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Technology Infrastructure

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Technology Infrastructure

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Hardware
• Storage capacity
–Software
–Volume of e-commerce
transactions
• Website hosting

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Web Server Software
• Security and identification
– Denial of service attack
• Web site tracking
– Web log file
• Web site development tools
• Retrieving and sending Web pages
• Web page construction software
– Static Web page
– Dynamic Web page

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E-Commerce Software
• Catalog management
• Product configuration
• Shopping cart

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E-Commerce Transaction Processing
• Automates transaction processes from
order placement to reconciliation
• Web traffic data analysis

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Electronic Shopping Cart

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Network and Packet Switching
• All e-commerce depends on a type of
network to securely transmit data
– Internet
– Extranet
– Value-added network (VAN)
– Virtual private network (VPN)
• All EC approaches rely on packet
switching and use routers
• Cost, availability, reliability, security, and
redundancy must be considered when
choosing a network

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Electronic Payment
Systems

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Electronic Payment Systems
• Digital certificates
– Certificate authority
– Secure sockets layer (SSL)
• Electronic cash
• Electronic wallets
• Smart, credit, charge, and debit cards

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Threats to E-Commerce

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Threats to E-Commerce
• E-commerce incidents
• Theft of intellectual property
– Patents on business processes
• Fraud
• Privacy Issues

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Fraud
• On-line auction fraud
• Spam
• Pyramid schemes
• Investment fraud
• Stock scams

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Invasion of Consumer Privacy
• On-line profiling
• Clickstream data
• Safe harbor principles

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TRUSTe Seal

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BBB On-line Privacy Seal

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How to Protect Your Privacy
While On-Line

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Strategies for Successful
E-Commerce

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Developing an Effective Web Presence
Visitors to a web site should be able to:
• Obtain general information about the
organization
• Obtain financial information for
making an investment decision
• Learn the organization’s position on
social issues
• Learn about the products or services
that the organization sells

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Putting up a Web Site
• Web site hosting services
• Storefront brokers

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Building Traffic to Your Web Site
• Domain names
• Meta tags
• Traffic data analysis

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Maintaining and Improving
Your Web Site
• Be alert to new trends
• Be prepared to take advantage of
new opportunities
• Personalization
–Explicit
–Implicit

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Summary
• E-commerce - enables consumers and
companies to gain access to worldwide
markets
• Electronic retailing (e-tailing) - the
direct sale from business-to-consumer
through electronic storefronts designed
around an electronic catalog and
shopping cart model
• E-commerce shoppers - must be on
constant guard to protect their rights,
security, and personal privacy

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Principles and Learning Objectives
• E-commerce is a new way of conducting
business, and as with any other new application
of technology, it presents both opportunities for
improvement and potential problems.
– Identify several advantages of e-commerce.
– Outline a multistage model that describes how e-
commerce works.
– Identify some of the major challenges companies
must overcome to succeed in e-commerce.
– Identify several e-commerce applications.

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Principles and Learning Objectives
• E-commerce requires the careful
planning and integration of a number of
technology infrastructure components.
– Outline the key components of technology
infrastructure that must be in place for e-
commerce to succeed.
– Discuss the key features of the electronic
payments systems needed to support e-
commerce.

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Principles and Learning Objectives
• Users of the new e-commerce technology must
take safeguards to protect themselves.
– Identify the major issues that represent significant
threats to the continued growth of e-commerce.
• Organizations must define and execute a
strategy to be successful in e-commerce.
– Outline the key components of a successful e-
commerce strategy

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End of Chapter 8