Chap03 UsingIT2E Commerce

7/31/2019 Chap03 UsingIT2E Commerce

1/38

Chapter 3Using Information Technology toEngage in Electronic

Commerce

MANAGEMENT INFORMATION SYSTEMS 8/E

Raymond McLeod, Jr. and George Schell

Copyright 2001, Prentice-Hall, Inc.3-1


2/38

Electronic Commerce

Electronic commerce is the use of

computers to facilitate the firms operations

internal (finance, marketing,manufacturing, ...)

external (customers, suppliers,

government, ...)

3-2


3/38

Environmental Responsibilities

of Functional Areas

Customers

Suppliers

Stockholders

Labor Unions

Government

Financial Community

Global Community

Competitors

Finance Resources Services Manufacturing Marketing

Human Information

X

X

XX

X

X

X

X

X

X

X

X

X

X

X3-3


4/38

Electronic Commerce Benefits

Improved service, especially to

customers

Improved relationships to suppliers andthe financial community

Increased return on stockholder and

owner investments

3-4


5/38

Electronic Commerce

ConstraintsHigh costs

Security concerns Immature or unavailable software

3-5


6/38

New Electronic Commerce Era

Instead of specialized software, firms

are designing systems to use Internet

Browsers

Making a common interface for

customers and electronic commercepartners

3-6


7/38

Selection of Electronic Commerce

Strategy, Methodology, and Technology

Business

IntelligenceCompetitive

Advantage

Strategic Business Plan

Enabling

strategy

Interorganiza-

tional

Electronicdata

interchange

Enabling

methodology

System life

cycle

Businessprocess

redesign

Enabling

technology

Direct

connectivity

Value-addednetworks

The Internet

3-7


8/38

Business Intelligence (BI)

Evolved from simply gathering data

about competitors to data gatheringabout all environmental elements

3-8


9/38

Data

Collect

data

2

Evaluate

data

Analyze

data

4

Store

intelligenceIntelligence

5

Disseminate

intelligence

Intelligence

The Five Basic Intelligence Tasks

Data

31

3-9


10/38

External Databases

Important commercial databases that

provide information on virtually any subject

LEXIS-NEXIS, DIALOG, DOWJONES.COMOver 1,000 data service sites listed by

YAHOO.COM

Less expensive to use database servicesthan to perform research

3-10


11/38

Search Engines

Special computer programs that ask users

for a word or group of words to be found at

Internet sites Yahoo, Excite, AltaVista, HotBot, Lycos,

and Webcrawler are examples

Government databases

3-11


12/38

Extranets

Allow sharing of sensitive computer-based

information using Internet technology

Limited to trusted suppliers and largecustomers

Security and privacy issues

Firewalls

3-12


13/38

Interorganizational System (IOS)

These link two or more firms so that they

function as a single system to accomplish a

common goal Generate internal efficiency in addition to

interorganizational efficiency

Provides customers with unique productfeatures, reduced search-related costs, and

raises the customers switching costs

3-13


14/38

Electronic Data Interchange (EDI)

Consists of direct computer-to-computer

transmissions among multiple firms of data

in a machine-readable, structured format

Typical linkagesSupply side

Customer side

Transaction set

Vendor stock replenishment (VSR)

Electronic Funds Transfer (EFT)3-14


15/38

Electronic Data Interchange (EDI)

Adheres to Standard Formats

Suppliers The

Firm

Purchase order

ANSI ASC X12 - North America EDIFACT - International

3-15


16/38

Selected EDI Transaction Sets

and Sample Invoice Data104 Air Shipment Information 130 Student Educational Record (Transcript)

152 Statistical Government Information 300 (Booking Request) (Ocean)

311 Canadian Customs Information 810 Invoice

Name

Address Information

Marking, Packaging, LoadingIndustry Code

Quantity

Currency

Tax Information

Pricing Information

Item Physical DetailsTerms of Sale / Deferred Terms of Sale

Carrier Detail

Product / Item Description

Invoice Shipment Summary

Transaction Totals

3-16


17/38

Mapping Software Translates Data to

and from Standard Formats

Sending

firms

computerApplication

software

Mapping

software

Standard EDI format

Receiving

firms

computer

Application

software

Mapping

software

3-17


18/38

Degree of EDI Implementation

Level-one users

One or two transmission sets sent to limited

trading partners

Level-two usersMany transaction sets transmitted to large

number of trading partners

Level-three usersMany transaction sets transmitted to large

number of trading partners and firms computer

applications are tailored to EDI approach3-18


19/38

Adoption Influences

Competitive pressure, this is reactive

Exercised power, this is proactive

Internal need, this is proactive

Top management support, this is both

proactive and reactive

3-19


20/38

Internal and Environmental

Influences on EDI Adoption

Environmental Influences

Pressure

Exercised

Power

Internal Influences

Internal

Need

Top

Management

Support

Competitors Trading

Partners

EDI3-20


21/38

EDI Benefits

Direct

Reduced errors

Reduced costs

Increased operational efficiency

Indirect

Increased ability to compete

Improved relationships with trading partners

Improved customer service

3-21


22/38

EDI Direct and Indirect BenefitsIndirect Benefits

Direct Benefits

Reduced

Errors

IncreasedOperational

Efficiency

Reduced

Costs

Competitors Trade Partners

Competitors

Increased Ability

to Compete

Improved Service

Improved

Relationships

3-22


23/38

A Challenge to EDI

Extensible markup language (XML)

Extension of HTML

Provides file formatting structure and means fordescribing data

Allows Web pages to perform many EDI

functions

3-23


24/38

Electronic Commerce

Technology

Direct Connectivity

Uses dial-up or private lines to connect

Value-Added Networks (VANs)

Circuit provided by vendor

Vendor provides additional services

The Internet

Global communications network

3-24


25/38

Internet Evolution

Derived from the Advanced ResearchProjects Agency network (ARPANET)

Designed to let computer-to-computer

communications continue even during

military attacks

ARPANET joined with Computer Science

Network (CSNET) and National Science

Foundation Network (NSFNET) to form

todays Internet

3-25


26/38

Internet Evolution [cont.)

During the 1970s various other networkswere connected

This led to the 1980s Internet concept

which means each network can seamlessly

interconnect with other networks

Businesses began using the new Internet

with workstations and local area networks

The Internet has become a network of

networks

3-26


27/38

Internet Evolution (cont.)

In 1989, Tim Berners-Lee of CERN came

up with the hypertext concept

World-Wide Web is really the applicationof hypertext documents and other materials

Hypertext is conceptually a speed dial

feature in that a user points to and pressesthe hypertext link and the system

automatically goes to that location

3-27


28/38

Key Web Terminology Website

Hypertext link

Web page

Home page Universal resource locator (URL)

Protocol

Domain namePath

Browser

FTP (File Transfer Protocol) 3-28


29/38

Parts of a URL

http://aisvm1.ais.com/abra7883/index.html

hypertext

transmission

protocol

domain name path(directory and file name

on the web server)

hypertext markup

language

3-29


30/38

Internet Client/Server

Information Retrieval Systems

Gopher

Wide Area Information Servers (WAIS)

USENET

Each of these predates the WWW and

represents a major step forward in Internet Use3-30


31/38

Terminal Emulator PC or Macintosh Unix X11 NextStep

Addressing schema, Protocols, Format negotiation

FTP

News

Gopher

WAIS

HTTPGateway is

HTTP serverplus other

application.

Database, info

system, etc.

Internet Client/Server Architecture

3-31


32/38

Internet Security

Any resources linked to data

communications have risk

Security by physically separating the Website from the firms computer resources

Security by using passwords that allow

access to computing resources Firewalls using routers, intermediary

computers or application-level methods

3-32


33/38

An Application-Level Firewall

ExternalServices

Border Router

IP ChokeProtocol Filter

Internal/ExternalService Gateway

Internal Router

Router

Isolation Mechanism

Internet ConnectivitySuppliers Network

Internet

Internal Network

Incoming packets from the Internet passthrough the connectivity suppliers network

to a router and to the organization

The packet goes to a router box that duplicates

the function of the external router

Rather than routing the packet directly to its destination, therouter redirects traffic through an external services host and

an IP choke host

The external services host runs desired apps such as E-mail

interface

The IP choke performs actual protocol filtering

Traffic is sent through a gateway to a separate router box

on the internal network, configured according to internal

security policy

3-33


34/38

Intranet

Internet technology used for internal

communications and applications

Used for many business applicationsrequiring communication

3-34


35/38

Business Applications

for the Internet

Marketing research

Competitive intelligence

Retailing applications

The future impact of the Internet on

business is enhanced as the National

Information Infrastructure programsbecome established

3-35


36/38

Successful Internet Use

Make sure your Web

site is robust

Make sure your

browser and database

structure are both

flexible and intuitive

Update often Look beyond

customers

Target content to

specific users needs

Make the interface

intuitive

Be in the right Web

location

Create a sense ofcommunity

Get help if you need it

3-36


37/38

Summary

E-Commerce begins with business

intelligence

Primary and secondary data comprisebusiness intelligence

Reasons for IOS

Comparative efficiencyBargaining power

Three levels of EDI3-37


38/38

Summary [cont.]

Internet

Network of networks

Security concernsFirewalls

Intranets

National information infrastructure

3-38

Date post:	04-Apr-2018
Category:	Documents
Upload:	imnotactive
View:	230 times
Download:	0 times

Chap03 UsingIT2E Commerce

Documents