Electronic Commerce and
Transaction Processing Systems
Chapter 5
Fundamentals of Information
Systems, Second Edition
1
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.
– Identify some of the major challenges companies
must overcome to succeed in e-commerce.
– Identify several e-commerce applications.
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Systems, Second Edition
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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.
– Identify the major issues that represent significant
threats to the continued growth of e-commerce.
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Systems, Second Edition
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Principles and Learning Objectives
• 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.
– Identify the basic activities and business objectives
common to all transaction processing systems.
– Discuss the importance of business resumption
planning and disaster recovery for key transaction
processing systems.
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Systems, Second Edition
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Principles and Learning Objectives
• Implementation of an enterprise resource
planning (ERP) system enables a company to
achieve numerous business benefits through the
creation of a highly integrated set of systems.
– Define the term enterprise resource planning system
and discuss the advantages and disadvantages
associated with the implementation of such a system.
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Systems, Second Edition
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Introduction to Electronic
Commerce
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Electronic Commerce
• Business-to-consumer (B2C) e-commerce
• Business-to-business (B2B) e-commerce
• Consumer-to-consumer (C2C) e-commerce
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Supply Chain Management
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Value Chains in E-Commerce
• Conversion to e-commerce supply chain
management provides businesses with an
opportunity to:
– increase revenues or decrease costs by eliminating
time-consuming and labor-intensive steps throughout
the order and delivery process
– improve customer satisfaction by enabling customers
to view detailed information about delivery dates and
order status
– reduce inventory including raw materials, safety
stocks, and finished goods
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Product and Information Flow for HP
Printers Ordered Over the Web
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E-Commerce Applications
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E-Commerce Applications
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Retail and Wholesale
Manufacturing
Marketing
Investment and Finance
Auctions
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Retail and Wholesale
• Electronic retailing - the direct sale from
business to consumer through electronic
storefronts
• Cybermall - a single Web site that offers many
products and services at one Internet location
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Model of an Electronic Exchange
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Web Sites Useful to Investors
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Popular Stock Tracker Web Sites
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Technology, Infrastructure, and
Development
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Key E-Commerce Technical Components
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Hardware
• The amount of storage capacity and computing
power required of the Web server depends
primarily on two things:
– the software that must run on the server
– the volume of e-commerce transactions that must be
processed
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Software
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Web site development tools
Web page construction software
E-commerce software
Catalog software
Product configuration software
Electronic shopping cart
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Electronic Shopping Cart
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Electronic Payment Systems
• Electronic cash
• Electronic wallets
• Credit, charge, debit, and smart cards
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An Overview of Transaction
Processing Systems
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TPS, MIS/DSS, and Special-Purpose
Information Systems
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Traditional Transaction Processing
Methods
• Batch processing – method of computerized
processing in which business transactions are
accumulated over a period of time and prepared
for processing as a single unit
• On-line transaction processing (OLTP) method of computerized processing in which
each transaction is processed immediately and
the affected records are updated
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Batch versus On-Line Processing
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Integration of a Firm’s TPSs
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Transaction Processing Activities
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Data collection
Data editing
Data correction
Data manipulation
Data storage
Document production and reports
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Data Processing Activities Common in
Transaction Processing Systems
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Point-of-Sale Transaction System
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Systems that Support Order Processing
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Order Processing Systems
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Business Resumption Planning
The process of anticipating and minimizing the
effects of disasters.
• Focuses primarily on two issues:
– maintaining the integrity of corporate information
– keeping key information systems running until normal
operations can be resumed
• Disaster recovery – implementation of the
business resumption plan
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Enterprise Resource Planning
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Some ERP Software Vendors
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Commonalities Among ERP Systems
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Integrate data
Operate in Client/Server Environment
Based on Objects
Employ Tables
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Advantages of ERP
• Elimination of costly, inflexible legacy systems
• Improvement of work processes
• Increase in access to data for operational decision
making
• Upgrade of technology infrastructure
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Disadvantages of ERP
• Expense and time in implementation
• Difficulty integrating with other systems
• Risks in using one vendor
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Summary
• E-commerce – includes business-to-business (B2B), business-toconsumer (B2C), consumer-to-consumer (C2C).
• Transaction Processing Systems (TPSs) - consist of all the
components of a CBIS, including databases, telecommunications,
people, procedures, software, and hardware devices to process
transactions.
• Business resumption plan – anticipates and minimizes the effects
of disasters.
• Disaster recovery – implements disaster resumption plan.
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