Electronic Commerce
Chapter 8
Principles of Information Systems,
Sixth Edition
1
Chapter 8 Outline
• An Introduction to Electronic
Commerce
• E-Commerce Applications
• Technology Infrastructure
• Electronic Payment Systems
• Threats to E-Commerce
• Strategies for Successful eCommerce
Principles of Information Systems,
Sixth Edition
2
An Introduction to
Electronic Commerce
Principles of Information Systems,
Sixth Edition
3
Introduction to Electronic Commerce
• Most common types of e-commerce:
• Business-to-consumer (B2C) ecommerce
• Business-to-business (B2B) ecommerce
• Consumer-to-consumer (C2C) ecommerce
Principles of Information Systems,
Sixth Edition
4
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
Principles of Information Systems,
Sixth Edition
5
Multistage Model for E-commerce
Principles of Information Systems,
Sixth Edition
6
Product and Service Delivery
Principles of Information Systems,
Sixth Edition
7
E-Commerce Model
Principles of Information Systems,
Sixth Edition
8
E-Commerce Challenges
• Changing distribution systems & work
processes
• Split-case distribution
• Integrating web-based order processing
with traditional systems
Principles of Information Systems,
Sixth Edition
9
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
Principles of Information Systems,
Sixth Edition
10
The E-Commerce Supply Chain
Principles of Information Systems,
Sixth Edition
11
Supply Chain Management
Principles of Information Systems,
Sixth Edition
12
Business-to-Business
• Allows manufacturers to buy at low price
worldwide
• Enterprise can sell to a global market
Principles of Information Systems,
Sixth Edition
13
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
Principles of Information Systems,
Sixth Edition
14
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
Principles of Information Systems,
Sixth Edition
15
E-Commerce Applications
Principles of Information Systems,
Sixth Edition
16
Retail and Wholesale
• Electronic retailing
• Cybermalls
• Wholesale e-commerce: B2B
Principles of Information Systems,
Sixth Edition
17
Manufacturing
Principles of Information Systems,
Sixth Edition
18
Marketing
• Market segmentation
• Technology-enabled relationship
management
Principles of Information Systems,
Sixth Edition
19
Investment and Finance
• On-line stock trading
• On-line banking
– Electronic bill presentment
Principles of Information Systems,
Sixth Edition
20
Investment and Finance
Principles of Information Systems,
Sixth Edition
21
Investment and Finance
Principles of Information Systems,
Sixth Edition
22
Technology Infrastructure
Principles of Information Systems,
Sixth Edition
23
Technology Infrastructure
Principles of Information Systems,
Sixth Edition
24
Hardware
• Storage capacity
– Software
– Volume of e-commerce
transactions
• Website hosting
Principles of Information Systems,
Sixth Edition
25
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
Principles of Information Systems,
Sixth Edition
26
E-Commerce Software
• Catalog management
• Product configuration
• Shopping cart
Principles of Information Systems,
Sixth Edition
27
E-Commerce Transaction Processing
• Automates transaction processes from
order placement to reconciliation
• Web traffic data analysis
Principles of Information Systems,
Sixth Edition
28
Electronic Shopping Cart
Principles of Information Systems,
Sixth Edition
29
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
Principles of Information Systems,
Sixth Edition
30
Electronic Payment
Systems
Principles of Information Systems,
Sixth Edition
31
Electronic Payment Systems
• Digital certificates
– Certificate authority
– Secure sockets layer (SSL)
• Electronic cash
• Electronic wallets
• Smart, credit, charge, and debit cards
Principles of Information Systems,
Sixth Edition
32
Threats to E-Commerce
Principles of Information Systems,
Sixth Edition
33
Threats to E-Commerce
• E-commerce incidents
• Theft of intellectual property
– Patents on business processes
• Fraud
• Privacy Issues
Principles of Information Systems,
Sixth Edition
34
Fraud
•
•
•
•
•
On-line auction fraud
Spam
Pyramid schemes
Investment fraud
Stock scams
Principles of Information Systems,
Sixth Edition
35
Invasion of Consumer Privacy
• On-line profiling
• Clickstream data
• Safe harbor principles
Principles of Information Systems,
Sixth Edition
36
TRUSTe Seal
Principles of Information Systems,
Sixth Edition
37
BBB On-line Privacy Seal
Principles of Information Systems,
Sixth Edition
38
How to Protect Your Privacy
While On-Line
Principles of Information Systems,
Sixth Edition
39
Strategies for Successful
E-Commerce
Principles of Information Systems,
Sixth Edition
40
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
Principles of Information Systems,
Sixth Edition
41
Putting up a Web Site
• Web site hosting services
• Storefront brokers
Principles of Information Systems,
Sixth Edition
42
Building Traffic to Your Web Site
• Domain names
• Meta tags
• Traffic data analysis
Principles of Information Systems,
Sixth Edition
43
Maintaining and Improving
Your Web Site
• Be alert to new trends
• Be prepared to take advantage of
new opportunities
• Personalization
– Explicit
– Implicit
Principles of Information Systems,
Sixth Edition
44
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
Principles of Information Systems,
Sixth Edition
45
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 ecommerce works.
– Identify some of the major challenges companies
must overcome to succeed in e-commerce.
– Identify several e-commerce applications.
Principles of Information Systems,
Sixth Edition
46
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 ecommerce to succeed.
– Discuss the key features of the electronic
payments systems needed to support ecommerce.
Principles of Information Systems,
Sixth Edition
47
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 ecommerce strategy
Principles of Information Systems,
Sixth Edition
48
End of Chapter 8
Principles of Information Systems,
Sixth Edition
49