Information Systems Today, 2/C/e ©2008 Pearson Education Canada Lecture Outline eCommerce...

Information Systems Today, 2/C/e ©2008 Pearson Education Canada

Lecture Outline eCommerce

• Highlights of Electronic Business

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Electronic Commerce

The process of buying or selling goods or services across a

telecommunications network.Many technologies facilitate E-

commerce-Electronic funds transfer

-Electronic data interchange-Internet / world wide web

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Electronic Commerce- another definition-

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The online exchange of goods, services, and money among firms, and between firms and their customers


Types of Electronic Commerce *MC

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Information Systems Today, 2/C/e ©2008 Pearson Education Canada2-5

e-Commerce: online selling of goods and services- business to consumer (B2C)

e-Business: broader, not just selling (follow-up customer service, EDI between businesses)- terms are not (yet) clearly defined

-reason for B2C: increase sales by providing more opportunity for more people to purchase goods and services from you

- reason for B2B: to save money


**Revenue Models for e-commerce• How will we make money? *MC

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Innovative marketing *X

Use the power of the Web and Internet to leverage new ideas, and new

business models

e.g., Hotmail gave away free e-mail accounts that used a Web interface and

was linked to a site.

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Ease of Entry Into Markets *MC

• The Internet opened up access to markets by lowering barriers to entry.

• Good ideas can be cloned.• Advantage frequently goes to First Mover• EBay was a “first mover”

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ESTABLISHING AN E-COMMERCE WEB SITE *L

1. Dedicated Server

- business sets up own server TO SERVE E-BUSINESS WEB PAGES- connect to Internet through a dedicated line- install proper software for managing server and creating Web pages- expert staff required- offers most control


2. **Web Hosting Services *L

- hosting company offers space on its server for the hosting of Web sites

- may provide software tools for flexible page development

- majority of businesses do not maintain their own Web server; they use host services;


Showing your e-business on customer screen *MC

- storefront: can have your own business on one separate web page this is a OR

- cybermall hosts pages of many businesses and users browse them all

- user who went into one mall store may also visit yours out of curiosity


Outsourcing Web Operations *L

• Using a web hosting service provides an e-business with several advantages.

• A web hosting service has a staff available 24 hours a day with the technical knowledge to keep the servers and network connections running.

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Outsourcing cont’d *L

• An web hosting company can provide a level of redundancy that an e-business may not be able to provide for itself, including redundant hard drives on the servers, backup power from generators, and redundant connections to the internet.

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Outsourcing cont’d *L

• One disadvantage of outsourcing Web site operations is lack of control.

• One solution to this lack of control is for an e-business to provide its own servers and software and simply co-locate its servers at the Web hosting company facilities.

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General E-business Security cont’d *MC

• Businesses must protect against the unknown. • New methods of attacking networks and Web

sites and new network security holes are being constantly discovered or invented.

• An e-business cannot expect to achieve perfect security for its network and Web site

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Several aspects of e-business computer systems security need to be addressed:

• How secure is the server software? • How secure are communications

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• How is the data protected once it is delivered to the e-business?

• How are credit card transactions authenticated and authorized?

• The biggest potential security problem in an e-business is of human, rather than electronic, origin.

• The weakest link in any security system is the people using it.

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Network and Web Site Security *X

• An entire glossary of words and phrases identifies network and web security risks, such as hacker, cracker, Trojan horse, and more.

• As part of planning a startup e-business’s security, management should become familiar with network and web server security risk terminology

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Denial of Service Attacks *MC

• A type of attack designed to disable a web site by flooding it with useless traffic or activity.

• Distributed denial of service attack uses multiple computers to attack in a coordinated fashion.

• Risk is primarily centered around downtime or lack of web site availability.

• Defenses exist for these attacks.

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Credit Card Fraud & Data Theft *MC

• E-business is at risk from credit card fraud from stolen data.

• Secure your own data.• Verify the identity of your customers and the

validity of the incoming credit card data. • Identity theft by a criminal masquerading as

someone else, is a too common problem.

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Front-End Systems **L

• Front- end systems are those processes with which a user interfaces, and over which a customer can exert some control.

• For an e-business, front-end systems are the Web site processes that customers use to view information and purchase products and services.

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Back-End Systems *L

• Back-end systems are those processes that are not directly accessed by customers.

• Back-end systems include the business’s TPS and MIS systems that handle the accounting and budgeting, manufacturing, marketing, inventory management, distribution, order-tracking, and customer support processes.

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Front & Back-End Systems

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Integrating the “ends” *L

• Online sales transactions are the heart of an e-business’s operations.

• The sales and payment information gathered from online sales transactions must be integrated with other back-end processes

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