Management of Information
Systems: 45-870
Mini-3
Spring 2000
1 Thursday, February 10, 2000

Agenda
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Announcements
Return of IT Exercise #2
Fundamentals of E-Commerce
Applications of E-Commerce (Video)
IT Diagnosis
Case Assignment #1: Sonoco
Thursday, February 10, 2000 2

Fundamentals of E-Commerce
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What is “e-commerce”
Categories of E-commerce applications
E-Commerce Technologies
Economic model for e-commerce
Approaches to assure secure electronic transactions
Thursday, February 10, 2000 3

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What is E-commerce?
online process of developing, marketing, selling, delivering, servicing, paying for products & services using Internet technologies
Includes:
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Interactive marketing, ordering, payment process on the www
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Extranet access of inventory databases by customers
& suppliers
Internet access of customer records by sales reps & customer service
Involvement in product development via Internet newsgroups and e-mail exchanges
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Categories of E-commerce
Applications
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Business to Consumer
Business to Business
Internal Business Processes
Thursday, February 10, 2000 5

Business to Consumer
E-Commerce
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Imperative: develop attractive electronic marketplaces to entice and sell products and services to customers
How?
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 virtual storefronts virtual shopping malls interactive order processing secure electronic payment
Thursday, February 10, 2000 6

How can businesses get customers to come back to their web site?
Performance and
Service
Personalization
Factors
Affecting
Retailing on the Web
Look and Feel
Incentives
Socialization
Thursday, February 10, 2000
Security and
Reliability
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Example: amazon.com
Thursday, February 10, 2000 8

Business to Business
E-Commerce
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Supply Chain Management
Electronic Data Interchange
Thursday, February 10, 2000 9

Supply Chain Management
Supplier Management
Inventory Management
Distribution Management
Components of Supply Chain
Management (SCM)
Channel Management
Payment Management
Financial Management
Sales Force Management
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What ITs are used in SCM?
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E-mail
Electronic Business Forms
Bulletin Board Systems
Electronic Funds Transfer
Web product catalogues
Interactive order processing
Electronic Data Interchange
Thursday, February 10, 2000 11

Example: Marshall Industries
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See www.ims.avnet.com/welcome.shtml
Thursday, February 10, 2000 12

Examples:
UPS, Fedex
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See:
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 www.ups.com
www.fedex.com
Thursday, February 10, 2000 13

Electronic Data Interchange
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Electronic exchange of business transaction documents over computer networks between trading partners
(manufacturers, customers, suppliers)
Thursday, February 10, 2000 14

Features of EDI
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EDI Software converts company’s own document formats into standardized EDI formats
Data transmitted over network links directly between computers
Use of third-party services
Eliminates printing, mailing, checking, handling of multiple business documents
Thursday, February 10, 2000 15

An Example: Singapore
Tradenet System
Singapore
16 Thursday, February 10, 2000

E-Commerce Technologies
Application
Services
Brokerage and
Data Management
EC
Technology
Services
Secure
Messaging
Middleware
Services
Thursday, February 10, 2000
Interface
Services
Network
Infrastructure
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Economic Model for
E-Commerce
Barriers to Entry are Low
Market Niches Abound
Revenue Sources are Many
No One Owns the Market
Key
Characteristics of the Economic
Model for
Electronic Commerce on the Internet
The Same Technology is
Available to Everyone
Access is Becoming
Universal
There is Room for Teams of Successful Players
Thursday, February 10, 2000 18

Business Value of
E-Commerce
2%
Other
Thursday, February 10, 2000
35%
Cost Savings
32%
Customer
Service
13%
Marketing
18%
Revenue
Generation
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Security for E-Commerce
Secure Socket
Layer (SSL)
Micropayments
Systems Examples of
Electronic Commerce
Security Methods
Digital Wallet
Secure
Electronic
Transaction
(SET)
Thursday, February 10, 2000
Offline
Method
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Applications of E-Commerce
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In-Class Exercise
Video
How are businesses using the Web?
How can the Internet improve a company’s customer relationships and service?
Are there any differences in how online-only
(e.g., “virtual”) companies use the Internet vs. existing (“brick & mortar”) companies?
Why?
Thursday, February 10, 2000 21

IT Diagnosis: Assessing
Opportunities for E-Commerce
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IT Diagnosis
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Describes how IS activities (input, processing, output, storage, control) are accomplished
Describes how use of resources (people, hardware, network, software) support the conversion of data resources into information products
Answers the question: “what resources are required to accomplish the activities that can produce the information products needed by end users?”
Thursday, February 10, 2000 22

IT Diagnosis:
The IS Component Matrix
IS
Activities and
Resources
Input
Hardware Software People Data Information
Products
Processing
Output
Storage
Control
Thursday, February 10, 2000 23

IS Component Matrix:
Key Definitions
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Information Systems Activities
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Input
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Processing
Output
Storage
Control
Information Systems Resources
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People
Procedures
Data
Software
Hardware
Thursday, February 10, 2000 24

Use of the IS Component
Matrix: An Example
Thursday, February 10, 2000 25

Case Analysis #1:
Sonoco IT Diagnosis
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Read the Sonoco Case (pp. A8-A13)
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Also check: www.datamation.com
Thursday, February 10, 2000 26

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Case Analysis #1:
Sonoco IT Diagnosis
Write a short report to briefly address these questions:
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Create an IS component matrix to:
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 document the IS activities and resources in Sonoco’s order fulfillment and other information systems
Using your IS component matrix:
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 identify some opportunities for e-commerce for Sonoco based upon their IS activities describe how Sonoco should adapt or extend its IS resources to realize these opportunities
Describe the role of IT in Sonoco:
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 in the late 1980’s and early 1990’s in the new business strategies in an e-commerce marketplace
Thursday, February 10, 2000 27