ELC 200 Day 18
ELECTRONIC COMMERCE
From Vision to Fulfillment
Third Edition
Elias M. Awad
© 2007 Prentice-Hall, Inc
12-1
Agenda
• Assignment 6 Corrected
– 7 A’s, 7 B’s, 1 C, 2 D’s
• Assignment 7 Posted
– 1 more 2 go
– Due April 10
• Quiz 3 will on April 7
– Chap 7, 8, 9, 10 & 11
• ECommerce Initiative Frameworks
– Guidelines
– Due MAY 7 @ 10 AM
• Finish Discussion on E-Core Values: Ethical, Legal,
Taxation, and International Issues
• Begin Discussion on Going On Line
© 2007 Prentice-Hall, Inc
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End of days? (subject to
change)
•
•
•
Today
– Chap 12 ECore Values
– Chap 16 Going on line
April 7
– Quiz 3
– Chaps 7, 8, 9, 10 & 11
•
– 20 M/C and 4 short essay
•
April 10 & 14
– Chap 13 eSecurity and the
USA Patriot Act
– Assignment 7 due April 10
– Assignment 8 Posted
•
April 17 & 21
– Chap 14 Encryption
– Assignment 8 Due April 21
April 24 & 28
– Chap 15 getting the money
– Optional Assignment 9??
May 1
– Quiz 4
– Chapters 12  16
– 20 M/C and 4 short essay
•
© 2007 Prentice-Hall, Inc
May 7 @ 10 AM
– eCommerce frameworks
due
– Student presentations
• 5 Mins!
12-3
E-Core Values: Ethical, Legal,
Taxation, and International Issues
ELECTRONIC COMMERCE
From Vision to Fulfillment
Third Edition
Elias M. Awad
© 2007 Prentice-Hall, Inc
12-4
Copyrights, Trademarks, and Trade
Names
•
Intellectual property: includes software, books, music, videos,
trademarks, copyrights, and Web pages
•
Copyright: ownership of an original work created by an author
– Copyright law is a law that gives the author or creator of a
tangible product the right to exclude others from using the
finished work
– Protected works include:
• Graphic works
• Web sites
– Good for the life of its author plus an additional 70 years after
the author’s death
– http://www.copyright.gov/
•
The Digital Millennium Copyright Act (DMCA)
•
Trademark: registration of a company’s trade name so that
others cannot use it; a word or a symbol that distinguishes a good
from other goods in the market (registered with Patent Office)
© 2007 Prentice-Hall, Inc
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Taxation Issues
• Sales tax is a very controversial issue
• On the Internet, tax collection is not easy
• The rules for taxation differ by country
• All indicators suggest that sales-tax revenue loss is
projected to increase exponentially unless something is
done to collect the tax
• Internet Tax Freedom Act
© 2007 Prentice-Hall, Inc
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Taxation Issues (Cont’d)
• Internet Tax Freedom Act
– A three-year moratorium on special, multiple,
or discriminatory taxes on the Internet that
would be imposed by any state or local
governments
– An advisory committee to explore different
issues relating to Internet taxes, government
Internet policy, and its effects on e-commerce
– The federal government is barred from taxing
the Internet or any transaction that takes place
through it
© 2007 Prentice-Hall, Inc
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Internet Taxation Today
•
•
•
•
•
US
– ITFA extended on October 30, 2007 for 7 more years
– Sales Tax Fairness and Simplification Act (H.R. 3396) in hearings
• http://www.ncsl.org/programs/fiscal/tctelcom.htm
EU VAT still in place
– https://secure.hmce.gov.uk/ecom/voes/welcome.do;jsessionid=
26E449F8278200994D04BD766AEC3432
WTO – no internet taxes
More Info
– http://www.cob.sjsu.edu/nellen_a/e-links.html
More information on Internet taxation
– Internet_taxation.ppt
© 2007 Prentice-Hall, Inc
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Jurisdiction
• The legitimate scope of government power
• Whose laws apply?
• State and federal laws limit a court’s jurisdiction
over a defendant from another state
• International jurisdiction is especially complex
and controversial
– In an international dispute over e-commerce,
whose laws apply?
– Violations of IP
© 2007 Prentice-Hall, Inc
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Guidelines Regarding Domain
Names and Trademarks
• Find out whether the proposed domain name infringes on
any trademarks
– http://www.uspto.gov/main/trademarks.htm
• Secure federal trademark registration of the proposed name
• Register the proposed domain name with InterNIC,
http://www.internic.net
• In the event of a poached domain name, bring a lawsuit to
force InterNIC to reassign the name to the original owner
• Get permission before linking to other Web sites
© 2007 Prentice-Hall, Inc
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International Issues
• What right does any one country have to determine the
materials that should be available on the Internet?
• Can a country regulate an entity in cyberspace, but not on
the soil of that country?
• World Intellectual Property Organization (WIPO) succeeded
in two treaties to adapt copyright rules for e-commerce
• EU’s Electronic Commerce Directive gave online business
firms assurance, in 2000, that the firms would have to
comply with laws only where the firms are based, not in any
other country in the union
© 2007 Prentice-Hall, Inc
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International Issues (Cont’d)
• Digital Millennium Copyright Act of 1998
• EU’s Rome II Directive hopes to allow consumers
to sue e-businesses in their home country
• Hague Convention drafted a treaty in 1992
designed to set global standards for defamation,
copyright, and libel on the Internet
© 2007 Prentice-Hall, Inc
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Intellectual Property
• Intellectual property describes the ideas,
inventions, technologies, music, and literature
that are intangible when created and are
converted into tangible products for market
consumption
• IP laws and cultural norms vary from country to
country
© 2007 Prentice-Hall, Inc
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Management Implications
• Legal rules that define the Internet are yet to be clarified
• Long-range effect of Internet patents, especially those held
by e-companies like Amazon.com that cover fundamental
online business practices
• Ultimate goal in doing business on the Internet is to
promote standards that everyone can accept or adopt
• Management must focus on legal and consumer protection
issues surrounding B2C e-commerce
© 2007 Prentice-Hall, Inc
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Chapter Summary
• Legal and ethical implications of the Internet are
attracting attention in industries and governments
around the world
• Question of ethics in e-commerce is the current
challenge confronting U.S. organizations
• Several threats to ethics
• Privacy is a basic American value
• Many of the legal questions that arise in ecommerce are not settled due to lack of specific
laws or legal guidelines
© 2007 Prentice-Hall, Inc
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Chapter Summary (Cont’d)
• Internet copyright and trademark violations fall
under intellectual property laws
• The question of whether a Web site is a product or
a service elicits varied opinions
• On the Internet, tax collection is not easy
• The ultimate goal of doing business on the
Internet is to promote ethics through standards
that everyone can accept or adopt
© 2007 Prentice-Hall, Inc
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Going Online
ELECTRONIC COMMERCE
From Vision to Fulfillment
Third Edition
Elias M. Awad
© 2007 Prentice-Hall, Inc
12-17
The focus of this chapter is on
several learning objectives
• How to build a business on the Internet - from
beginning to end
• What it takes to plan effectively
• The hardware, software, security, and setup
considerations in e-commerce infrastructure
• The critical elements in the design of an ebusiness
• How to market e-presence
• How to manage customer feedback
© 2007 Prentice-Hall, Inc
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Building an Internet Business The Life Cycle
© 2007 Prentice-Hall, Inc
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Business Planning and
Strategizing (1)
• What is the best way to launch the business on
the Internet?
• How much of the company’s business should be
on the Internet?
• Requirements
– Top management support
– A champion in top management to sponsor the push to
the Internet
© 2007 Prentice-Hall, Inc
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Business Planning and
Strategizing (Cont’d)
• When should the business go on the Web?
• Strategize the following areas:
– Vision
– Resources
– Culture
– What is the key product or service at stake?
– What is the main goal of going online?
© 2007 Prentice-Hall, Inc
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Traditional Business versus E-business
© 2007 Prentice-Hall, Inc
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Developing the Online Strategic
Plan
• The most critical part of going online is the plan the blueprint
• An online plan is a tool with communication,
management, and planning in mind
• The plan helps you track, monitor, and evaluate
your progress
• The plan guides you through various phases of
the business
© 2007 Prentice-Hall, Inc
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Strategic Planning Questions to
Consider
1. How familiar are you with the Internet?
2. Who will buy the product?
3. Are you planning to be a short-term presence or
a long-term presence?
4. Who are your competitors?
5. How good will your products look?
6. How will you present your products offers?
7. How will you manage and process transactions?
8. How will the product be shipped?
9. How will you handle unexpected change?
10. How will you handle CRM?
© 2007 Prentice-Hall, Inc
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Capacity Planning
• Determining in advance the capacity of the
bandwidth (pipeline) that will accommodate the
traffic to and from the Web site
• Planning for scalability
• The objective is to ensure that your customers do
not go somewhere else
© 2007 Prentice-Hall, Inc
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Going Global
• Strategic planning means considering the politics
of going global
• A global strategy means setting up foreign
distribution with IT talent abroad
• Think like a local
• Make sure your Web content is not misinterpreted
• Can your IT infrastructure handle your
international traffic?
© 2007 Prentice-Hall, Inc
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Deciding on Type of Web Site
• Clearly defined goals keep your priorities in
perspective
• Some main goals for Web sites are:
– Marketing
– Online sales and service
– Information delivery
– Customer support
© 2007 Prentice-Hall, Inc
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Types of E-Commerce Strategies
© 2007 Prentice-Hall, Inc
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Technology Infrastructure (2)
•
•
•
•
•
What hardware will you need??
What Software will you need?
Find an ISP.
How will you deal with security?
How will you staff your company?
© 2007 Prentice-Hall, Inc
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Software Issues
• eCommerce on the Internet requires basic software
– File transfer protocol (FTP)
– Remote Console
• VNC
– http://www.realvnc.com/
– http://www.tightvnc.com/
– Search capabilities
– NetNews -- RSS feeds
• http://en.wikipedia.org/wiki/RSS
– E-mail
– Broadband connection (DSL, Cable, or Wireless)
– A browser
• IE, FireFox, Opera, Safari
© 2007 Prentice-Hall, Inc
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Security
• Security is the critical backdrop that must be in place for
every step to work
• Security is the protection of data, software, or hardware
against accidental or intentional damage from a defined
threat
• Three types of security risk:
– Document security entails the integrity of the Web site
and its information
– Customer privacy has to do with embedding devices in
the visitor’s hard disk to track site usage
– System security deals with the way the network, the Web
server, and the e-commerce infrastructure prevent
unauthorized access and tampering with e-commerce
traffic
© 2007 Prentice-Hall, Inc
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Security Rules
• Control access to the Web server
• Update server software and encode security
measures to ensure server - Web site integrity
• Use firewalls to protect the merchant’s internal
network
• Monitor the traffic and detect irregularities in time
to minimize damage
• Ensure a hot standby for every piece of hardware
and software
© 2007 Prentice-Hall, Inc
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Design Phase (3)
•
•
•
•
•
Design, build and host the web site
What makes a good web site?
Will you outsource?
What services will you offer?
What components will you need for your
website??
© 2007 Prentice-Hall, Inc
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Attributes of the Web Storefront
• Customers should be able to find the product
quickly
• The site should have mechanisms to process the
order and send it to the fulfillment center for quick
and secure packing and shipping
• The site should have mechanisms to generate a
summary of the order and produce a printable
receipt
• The site should have mechanisms to send a
confirming e-mail to customers
© 2007 Prentice-Hall, Inc
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Software Program Cluster
Components
• Database server
• Catalog builder
• Shopping cart
• Order-processing system
© 2007 Prentice-Hall, Inc
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Doing It Yourself ?
or Outsourcing?
• Should the IT department of the business design
the Web site?
< or >
• Should the Web site design be assigned to an
outside Web designer?
• Control versus Speed & Expertise
• How much $ do you have?
© 2007 Prentice-Hall, Inc
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Web Site Design Issues
• User control and freedom
• Consistency and standards
• Recognition rather than recall
• Efficient design
• Recovery from error
• Help desk
© 2007 Prentice-Hall, Inc
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The Marketing Phase (4)
• Providing good site service
• Advertising
• Know your customer
• Making the sale
– Stock control
– Collecting the cash
• Delivering the goods and following up
© 2007 Prentice-Hall, Inc
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The Marketing Phase
© 2007 Prentice-Hall, Inc
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The Fulfillment Phase (5)
• Fulfillment is what happens after a sale is made
– Packing up the merchandise
– Shipping the merchandise
– Answering questions about the order
– Sending out the bill or verifying e-payment
– Following up to see if the customer is satisfied
• Fulfillment is honoring a commitment to deliver goods or
services after payment has been assured
• To the customer order fulfillment is the most important
business activity of all
© 2007 Prentice-Hall, Inc
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Fulfillment Issues
• Product availability
• Matching the products for sale to the products in
the inventory
• Out-of-stock notice
• Back orders
• Processing orders
• Controls
© 2007 Prentice-Hall, Inc
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The Maintenance and
Enhancement Phase (6)
• Maintenance means keeping a system or business
on course, based on the initial design or plan
• The goal of maintenance is to ensure the usability
of the Web site
• Enhancement means implementing upgrades or
changes that are designed to improve the
system’s productivity
• The goal of enhancement is to upgrade the Web
site and the business-to-consumer connection to
meet the latest standards and customer
expectations
© 2007 Prentice-Hall, Inc
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Important Tips for Managing Customer
Feedback
• Set up a list of frequently asked questions and post the list
in a prominent location on the homepage
• Make sure the information can be accessed easily and
quickly
• Make sure any page downloads within eight seconds and
test it on slow, older computers
• Avoid unnecessarily large images or bandwidth-hogging
elements
• Answer e-mail
© 2007 Prentice-Hall, Inc
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Important Items for Managing Customer
Service
• Updating orders
• Order status
• Technical support
• Localization
• Handling customer expectations
© 2007 Prentice-Hall, Inc
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SWOT
• An analytic method used to determine competitive
advantage
– Strengths
– Weakness
– Opportunities
– Threats
© 2007 Prentice-Hall, Inc
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STRENGHTS (internal)
• Define areas you excel in
– What will your initiative do better than others?
– What are your core competencies (things you
are good at)?
– Do you have a clear strategic direction?
– What resources do you have that competitors
may not have?
© 2007 Prentice-Hall, Inc
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WEAKNESSES (internal)
• Evaluate your liabilities
– Where are you weak in relation to your
competitors?
– What skills and resources are you lacking?
– What needs to be improved in your initiative?
– Why were not able to improve the weaknesses
you discovered?
© 2007 Prentice-Hall, Inc
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OPPORTUNITIES (external)
•
Analyze your customers and market potential
– Identify favorable market conditions
– Identify emerging technologies in support of
your initiative
– Identify changes in legislation and public policy
that will have a supporting effect on your
initiative
© 2007 Prentice-Hall, Inc
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THREATS (external)
•
Analyze potential challenges
– What are your obstacles?
– What are your competitors doing?
– Identify changes in legislation and public policy
that will have an adverse effect on your
initiative.
© 2007 Prentice-Hall, Inc
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SWOT Analysis
© 2007 Prentice-Hall, Inc
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Chapter Summary
• Launching a business on the Internet involves a
life cycle
• Strategizing means evaluating a company’s
position and the competition, setting a course for
the years ahead, and determining how to get it
done
• Specific goals need to be considered when
planning e-business
© 2007 Prentice-Hall, Inc
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Chapter Summary (Cont’d)
• The hardware, software, security, and set-up
phase focuses on:
– Hardware to buy
– Software to buy
– Where to buy
• Four essentials of launching a business on the
Internet are
–
–
–
–
Security
Shopping carts
Payments
Marketing
• Behind every Web site are programs stored on a
Web server © 2007 Prentice-Hall, Inc
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Chapter Summary (Cont’d)
• In Web design, the focus is on
–
–
–
–
–
–
user control and freedom
Consistency and standards
Recognition
Aesthetic design
Recovery from error
Help desk to handle customer queries and complaints
• Marketing phase includes:
–
–
–
–
–
Advertising
Knowing the customer
Making the sale
Getting the goods
Follow-up procedures after the sale
© 2007 Prentice-Hall, Inc
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Chapter Summary (Cont’d)
• Fulfillment phase typically includes:
–
–
–
–
Packing up the merchandise
Shipping the goods
Answering questions about the order
Sending out the bill or a copy of the bill
• Maintenance and Enhancement Phase addresses
the need to keep the Web storefront up to date
and to make any changes that will enhance the
use and effectiveness of the Web site
© 2007 Prentice-Hall, Inc
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