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.
• E-commerce requires the careful planning and integration of a
number of technology infrastructure components.
• An organization’s transaction processing system (TPS) must support
the routine, day-to-day activities that occur in the normal course of
business and help a company add value to its products and
services.
• Implementation of an enterprise resource planning (ERP) system
enables a company to achieve many benefits by creating a highly
integrated set of systems.
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Ebake.com
3
Revenue Paradigm
4
Business advantages of B2B include:
–
–
–
–
Managing __________ more efficiently
Adjusting more quickly to customer demand
Getting products to market faster
Obtaining __________ prices on supplies
Sales
- Cost of goods sold
Gross margin
- Expenses
Net income
5
Business advantages of B2C include:
– Access to a wider __________ of products and
services
– Access to products at lower costs
– __________ for transactions or for obtaining
Sales
information
- Cost of goods sold
Gross margin
Ebake.com
- Expenses
Net income
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The E-Commerce Supply Chain
Figure 5.1: Supply Chain Management
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The E-Commerce Supply Chain
(continued)
• E-commerce supply chain management allows
businesses an opportunity to achieve:
– Increased __________ and decreased costs
– Improved customer satisfaction
– Inventory reduction across the supply chain
– Amazon Distribution
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Mobile Commerce
• 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 __________ business
• Issues confronting m-commerce
– User-friendliness of the wireless device
– Network speed
– Security
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Mobile Commerce (continued)
• Handheld devices used for m-commerce have
limitations that complicate their use
• Wireless application protocol (WAP): a standard
set of specifications for Internet __________ that
run on handheld, wireless devices
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E-Commerce Applications
• Retail and Wholesale
• Manufacturing
• Marketing
• Investment and Finance
• Auctions
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E-commerce Technology,
Infrastructure, and Development
Figure 5.4: Key E-Commerce Technical Components
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Hardware
• Storage capacity and computing power required of
the Web server depends on:
– Software that will run on the server
– Volume of e-commerce transactions
• Web __________ hosting
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Software
• Security and identification
• Retrieving and __________ Web pages
• Web page construction
– Static Web page
– Dynamic Web page
• E-commerce software must support:
– Catalog __________
– Product configuration
– Shopping-cart facilities
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Electronic Payment Systems
•
•
•
•
•
•
Electronic cash
Electronic wallets
Smart cards
Credit cards
Debit cards
Charge cards
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An Overview of Transaction Processing
Systems
• Provide data for other __________ processes:
– Management information system/decision support
system (MIS/DSS)
– Special-purpose information systems
• Process the detailed data necessary to update
records about the fundamental business operations
• Include order entry, inventory control, payroll,
accounts __________ , accounts receivable, and
the general ledger.
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An Overview of Transaction Processing
Systems (continued)
Figure 5.6: TPS, MIS/DSS, and Special Information Systems in
Perspective
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Traditional Transaction Processing
Methods and Objectives (continued)
Figure 5.7: Batch Versus Online Transaction Processing
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Transaction Processing Activities
• TPSs
– Capture and process data that describes fundamental
business transactions
– Update databases
– Produce a variety of reports
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Transaction Processing Activities
(continued)
Figure 5.8: Data Processing Activities Common to TPSs
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Basic TPS Applications
Table 5.4: Systems That Support Order Processing
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Order Processing Systems
•
•
•
•
•
•
•
•
Order entry
Sales configuration
Shipment planning
Shipment execution
Inventory control
Invoicing
Customer relationship management
Routing and scheduling
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Order Processing Systems (continued)
Figure 5.10: Order Processing Systems APL Fulfillment
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Purchasing and Accounting Systems
• Purchasing transaction processing systems include:
–
–
–
–
Inventory control
Purchase-order processing
Receiving
Accounts payable
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Purchasing and Accounting Systems
(continued)
• Accounting transaction processing systems include:
–
–
–
–
–
Budget
Accounts receivable
Payroll
Asset management
General ledger
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Purchasing and Accounting Systems
(continued)
Figure 5.11: Integration of a Firm’s TPSs
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TPS Control and Management Issues
• Business continuity planning
• Transaction Processing System Audit
• International Issues ( GLOBAL LOGISTICS )
–
–
–
–
Different languages and cultures
Disparities in IS infrastructure
Varying laws and customs rules
Multiple currencies
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An Overview of Enterprise Resource
Planning
• Enterprise resource __________ (ERP) systems are
used in large, midsized, and small companies
• Real-time monitoring of business functions
• Timely analysis of key __________ , such as quality,
availability, customer satisfaction, performance, and
profitability
• IN Tech We trust
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An Overview of Enterprise Resource
Planning
• Steps in running a manufacturing organization using
an ERP system:
–
–
–
–
–
–
–
Develop demand forecast
Deduct demand forecast from inventory
Determine what is needed for production
Check inventory for needed raw materials
Schedule production
Assess need for additional production resources
Financial forecasting
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Advantages of ERP
• __________ of costly, inflexible legacy systems
• Improvement of work processes
• Increase in access to data for operational decision
making
• __________ of technology infrastructure
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Disadvantages of ERP
•
•
•
•
Expense and time in implementation
__________ implementing change
Difficulty integrating with other systems
Risks in using one __________ Risk of
implementation failure
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