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9 - 1Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Electronic Commerce

Systems

Chapter

9

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9 - 2Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

1. Identify the major categories and trendsof e-commerce applications.

2. Identify the essential processes of an e-commerce system, and give examples of

how they are implemented in e-

commerce applications.

Learning Objectives

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9 - 3Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives

3. Identify and give examples of several keyfactors and Web store requirements needed to

succeed in e-commerce.

4. Identify and explain the business value of

several types of e-commerce marketplaces.

5. Discuss the benefits and trade-offs of severale-commerce clicks and bricks alternatives.

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9 - 4Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

What is Electronic Commerce?

Electronic commerce encompasses theentire online process ofdeveloping,

marketing, selling, delivering, servicing,

and paying for products and servicestransacted on internetworked, global

marketplaces of customers, with the

support of a worldwide network of

business partners.

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9 - 5Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Scope of e-Commerce

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9 - 6Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Categories of e-Commerce

Business-to-Consumer (B2C) businessesdevelop attractive electronic marketplaces to

sell products and services to consumers

Business-to-Business (B2B) involves both

electronic business marketplaces anddirect

market links between businesses

Consumer-to-Consumer (C2C) includes

auction websites and electronic personal

advertising

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9 - 7Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Essential e-Commerce Processes

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9 - 8Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Access Control and Security

Definition:

E-commerce processes must establish

mutual trust and secure access between

the parties in an e-commerce transactionby authenticating users, authorizing

access, and enforcing security features

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9 - 9Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Profiling and Personalizing

Definition:

Processes that gatherdata on you and

your website behavior and choices, and

build electronic profiles of yourcharacteristics and preferences. These

profiles are then used to recognize you as

an ind

ivid

ual user and

provid

e you with apersonalized view of the contents of the

site, as well as product recommendations

and personalized Web advertising

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9 - 10Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Search Management

Definition:

Efficient and effective search processes

provide a top e-commerce website

capability that helps customers find thespecific product or service they want to

evaluate or buy

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9 - 11Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Content and Catalog Management

Content Management software thathelps e-commerce companies develop,

generate, deliver, update, and archive text

data and multimedia information at e-commerce websites

Catalog Management software thathelps generate and manage catalog

content

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9 - 12Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Workflow Management

Definition:

Software that helps employees

electronically collaborate to accomplish

structured work tasks within knowledge-based business processes

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9 - 13Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Event Notification

Definition:

Software that notifies customers,

suppliers, employees, and other

stakeholders of their status in atransaction based on events initiated by

one of the parties

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9 - 14Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Collaboration and Trading

Definition:

Processes that support the vital

collaboration arrangements and trading

services needed by customers, suppliers,and other stakeholders

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9 - 15Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Electronic Payment Processes

Web Payment credit card payment processes

Electronic Funds Transfer (EFT) use IT tocapture and process money and credit transfers

between banks and

businesses and

theircustomers

Secure Electronic Payments securitymeasures including encrypting data passing

between customer and merchant, encryptingdata passing between customer and companyauthorizing the credit card transaction, andtaking sensitive information off-line

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9 - 16Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

e-Commerce Trends

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9 - 17Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Business-to-Consumer e-Commerce

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9 - 18Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

e-Commerce Success Factors

Selection and Value attractive productselections, competitive prices, satisfaction

guarantees, and customer support after

the sale

Performance and Service fast, easy

navigation, shopping, and purchasing, andprompt shipping anddelivery

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9 - 19Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

e-Commerce Success Factors

Look and Feel attractive web storefront,website shipping areas, multimedia

product catalog pages, and shopping

features

Advertising andIncentives targeted web

page advertising and e-mail promotions,discounts and special offers, including

advertising at affiliate sites

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9 - 20Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

e-Commerce Success Factors

Personal Attention personal web pages,personalized product recommendations,

Web advertising and e-mail notices, and

interactive support for all customers

Community Relationships virtual

communities of customers, suppliers,company representatives, and others via

newsgroups, chat rooms, and links to

related sites

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9 - 21Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

e-Commerce Success Factors

Security and Reliability security ofcustomer information and website

transactions, trustworthy product

information, and reliable order fulfillment

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9 - 22Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Web Store Requirements

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9 - 23Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Developing a Web Store

Build website using simple website designtools

Market website to attract visitors andtransform them into loyal Web customers

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9 - 24Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Serving Customers

Serve customers by creating user profiles,customer files, personal Web pages andpromotions that help develop a one-to-onerelationship

Transact with customers by providingdynamically changing catalog, fast catalogsearch engine, and convenient shopping cartsystem integrated with promotions, payment,

shipping, and

account information

Support customers with help menus, tutorials,FAQs and e-mail correspondence with customerservice representatives

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9 - 25Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Managing a Web Store

Manage both the business and thewebsite

Operate twenty-four hours a day, sevendays a week

Protect Web store transactions andcustomer records, and repel hacker

attacks and other security threats

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9 - 26Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Business-to-Business e-Commerce

B2B e-commerce is the wholesale andsupply side of the commercial process,

where businesses buy, sell, or trade with

other businesses.

All factors for building a successful retail

website also apply to wholesale websitesfor B2B e-commerce.

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9 - 27Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

e-Commerce Marketplaces

One to Many sell-side marketplaces host onemajor supplier who dictates product catalog

offerings and prices

Many to One buy-side marketplaces attract

many suppliers that flock to these exchanges to

bid on the business of a major buyer

Some to Many distribution marketplaces unite

major suppliers who combine their product

catalogs to attract a larger audience of buyers

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9 - 28Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

e-Commerce Marketplaces

Many to Some procurementmarketplaces unite major buyers who

combine their purchasing catalogs to

attract more suppliers and thus morecompetition and lower prices

Many to Many auction marketplacesused by many buyers and sellers that can

create a variety of buyers or sellers

auctions to dynamically optimize prices

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9 - 29Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

e-Commerce Portals

Definition:

Websites developed and hosted by third-

party market-maker companies who serve

as infomediaries that bring buyers andsellers together in catalog, exchange, and

auction markets.

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9 - 30Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Infomediaries

Definition:

Companies that serve as intermediaries in

e-business and e-commerce transactions

Provide e-commerce marketplace

software products and services to power

business Web portals for e-commercetransactions

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9 - 31Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Clicks and Bricks in e-Commerce

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9 - 32Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

E-Commerce Channel

Definition:

The marketing or sales channel created

by a company to conduct and manage its

chosen e-commerce activities

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9 - 33Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Checklist for Channel Development

What audiences are we attempting to reach?

What action do we want those audiences to

take?

Who owns the e-commerce channel within the

organization?

Is the e-commerce channel planned alongside

other channels?

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9 - 34Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Checklist for Channel Development

Do we have a process for generating,approving, releasing, and withdrawing

content?

Will our brands translate to the new

channel or will they require modification?

How will we market the channel itself?

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9 - 35Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Summary

Electronic commerce encompasses theentire online process ofdeveloping,

marketing, selling, delivering, servicing,

and

paying for prod

ucts and

services.

The basic categories of e-commerce

includ

e B2

C, B2

B and

C2

C.

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9 - 36Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Summary

Many e-business enterprises are movingtoward offering full service B2C and B2Be-commerce portals supported byintegrated customer-focused processes

and internetworked supply chains.

Companies must evaluate a variety of e-

commerce integration or separationalternatives and benefit trade-offs whenchoosing a clicks and bricks strategy ande-commerce channel.

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9 - 37Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Summary

Businesses typically sell products andservices to consumers at e-commerce

websites that provide attractive Web

pages, multimed

ia catalogs, interactiveorder processing, secure electronic

payment systems, and online customer

support.

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9 - 38Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

Summary

Business-to-business applications of e-commerce involve electronic catalog,

exchange, and auction marketplaces that

useInternet, intranet, an

dextranetwebsites and portals to unite buyers and

sellers.

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9 - 39Copyright 2006, The McGraw-Hill Companies, Inc. All rights reserved.

End of Chapter

Chapter

9