Electronic Commerce and Transaction Processing Systems

Chapter 5

Fundamentals of Information Systems, Second Edition 1

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.

– Identify some of the major challenges companies must overcome to succeed in e-commerce.

– Identify several e-commerce applications.

Fundamentals of Information Systems, Second Edition 2

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 e-commerce to succeed.

– Discuss the key features of the electronic payments systems needed to support e-commerce.

– Identify the major issues that represent significant threats to the continued growth of e-commerce.

Fundamentals of Information Systems, Second Edition 3

Principles and Learning Objectives

• An organization’s transaction processing system (TPS) must support the routine, day-to-day activities that occur in the normal course of business and help a company add value to its products and services.

– Identify the basic activities and business objectives common to all transaction processing systems.

– Discuss the importance of business resumption planning and disaster recovery for key transaction processing systems.

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Principles and Learning Objectives

• Implementation of an enterprise resource planning (ERP) system enables a company to achieve numerous business benefits through the creation of a highly integrated set of systems.

– Define the term enterprise resource planning system and discuss the advantages and disadvantages associated with the implementation of such a system. Fundamentals of Information Systems, Second Edition 5

Introduction to Electronic Commerce

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Electronic Commerce

• Business-to-consumer (B2C) e-commerce • Business-to-business (B2B) e-commerce • Consumer-to-consumer (C2C) e-commerce Fundamentals of Information Systems, Second Edition 7

Supply Chain Management

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Value Chains in E-Commerce

• Conversion to e-commerce supply chain management provides businesses with an opportunity to: – increase revenues or decrease costs by eliminating time-consuming and labor-intensive steps throughout the order and delivery process – improve customer satisfaction by enabling customers to view detailed information about delivery dates and order status – reduce inventory including raw materials, safety stocks, and finished goods Fundamentals of Information Systems, Second Edition 9

Product and Information Flow for HP Printers Ordered Over the Web

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E-Commerce Applications

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E-Commerce Applications

• Retail and Wholesale • Manufacturing • Marketing • Investment and Finance • Auctions Fundamentals of Information Systems, Second Edition 12

Retail and Wholesale

•

Electronic retailing

- the direct sale from business to consumer through electronic storefronts •

Cybermall

- a single Web site that offers many products and services at one Internet location Fundamentals of Information Systems, Second Edition 13

Model of an Electronic Exchange

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Web Sites Useful to Investors

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Popular Stock Tracker Web Sites

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Technology, Infrastructure, and Development

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Key E-Commerce Technical Components

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Hardware

• The amount of storage capacity and computing power required of the Web server depends primarily on two things: – the software that must run on the server – the volume of e-commerce transactions that must be processed Fundamentals of Information Systems, Second Edition 19

Software

• Web site development tools • Web page construction software • E-commerce software • Catalog software • Product configuration software • Electronic shopping cart Fundamentals of Information Systems, Second Edition 20

Electronic Shopping Cart

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Electronic Payment Systems

• Electronic cash • Electronic wallets • Credit, charge, debit, and smart cards Fundamentals of Information Systems, Second Edition 22

An Overview of Transaction Processing Systems

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TPS, MIS/DSS, and Special-Purpose Information Systems

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Traditional Transaction Processing Methods

•

Batch processing

– method of computerized processing in which business transactions are accumulated over a period of time and prepared for processing as a single unit •

On-line transaction processing (OLTP)

method of computerized processing in which each transaction is processed immediately and the affected records are updated Fundamentals of Information Systems, Second Edition 25

Batch versus On-Line Processing

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Integration of a Firm’s TPSs

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Transaction Processing Activities

• Data collection • Data editing • Data correction • Data manipulation • Data storage • Document production and reports Fundamentals of Information Systems, Second Edition 28

Data Processing Activities Common in Transaction Processing Systems

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Point-of-Sale Transaction System

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Systems that Support Order Processing

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Order Processing Systems

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Business Resumption Planning

The process of anticipating and minimizing the effects of disasters.

•

Focuses primarily on two issues:

– maintaining the integrity of corporate information – keeping key information systems running until normal operations can be resumed •

Disaster recovery

– implementation of the business resumption plan Fundamentals of Information Systems, Second Edition 33

Enterprise Resource Planning

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Some ERP Software Vendors

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Commonalities Among ERP Systems

• Integrate data • Operate in Client/Server Environment • Based on Objects • Employ Tables Fundamentals of Information Systems, Second Edition 36

Advantages of ERP

• Elimination of costly, inflexible legacy systems • Improvement of work processes • Increase in access to data for operational decision making • Upgrade of technology infrastructure Fundamentals of Information Systems, Second Edition 37

Disadvantages of ERP

• Expense and time in implementation • Difficulty integrating with other systems • Risks in using one vendor Fundamentals of Information Systems, Second Edition 38

Summary

•

E-commerce

– includes business-to-business (B2B), business-to consumer (B2C), consumer-to-consumer (C2C).

•

Transaction Processing Systems (TPSs)

- consist of all the components of a CBIS, including databases, telecommunications, people, procedures, software, and hardware devices to process transactions. •

Business resumption plan

of disasters.

– anticipates and minimizes the effects •

Disaster recovery

– implements disaster resumption plan.

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