Transcript C H A P T E R
Chapter 5:
Electronic Commerce and Transaction Processing Systems
Topics:
• An Introduction to Electronic Commerce • E-Commerce Applications • E-Commerce Technology Components • Strategies for Successful E-Commerce • An Overview of Transaction Processing Systems • Enterprise Resource Planning
Please turn off your cell phone.
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Chapter 5.1
An Introduction to Electronic Commerce
• • • • Key Terms
Business-to-consumer (B2C) e-commerce Business-to-business (B2B) e-commerce Consumer-to-consumer (C2C) e-commerce Supply chain management
• •
Electronic data interchange (EDI) Mobile commerce (m-commerce)
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E-commerce
Business activities conducted using electronic data transmission involving computers, telecommunications networks, and streamlined work processes.
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E-commerce History
VAN
Transaction EDI Software Company B Transaction EDI Software Company A
Electronic Data Interchange (EDI)
EDI uses private network communications networks called value-added networks (VANs) to transmit standardized transaction data between business partners and suppliers.
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Benefits of E-Commerce?
Businesses use E-Commerce to: Reduce transaction costs Speed the flow of goods and info Improve customer service Enable close coordination of actions among manufacturers, suppliers, and customers Gain access to worldwide markets 5
Pre-E-Commerce Sales
Rest of Wales 9% UK 1% Local 90% E-commerce can dramatically extend a businesses market. Farmyard Nurseries customer base before and after e commerce.
http://www.farmyardnurseries.co.
uk/mail.htm
.
UK 37%
Post E-Commerce Sales
World 2% Local 25% Rest of Wales 36% 6
Challenges of E-Commerce
Change distribution systems & work processes Integrate web-based order processing with traditional systems 7
The E-Commerce Supply Chain
Supply chain management is a key value chain composed of: Demand planning Supply planning Demand fulfillment 8
The E-Commerce Supply Chain
Figure 5.1: Supply Chain Management 9
E-Commerce Segmentation
Business to Consumer (B2C)
Amazon.com
BestBuy.com
Consumer to Consumer (C2C)
eBay.com
Business to Business (B2B)
Half.com
Private
B2C C2C B2B
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E-Commerce Segmentation
E-com m erce Revenues
$1,400 $1,200 $1,000 $800 $600 $400 $200 $0 1999
B2B B2C
2003 11
M-commerce
M-commerce: E-commerce over mobile devices like smartphones.
digital goods proximity payment systems distance goods http://www.dylanscandybar.com
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Chapter 5.2
E-commerce Applications
• • • • • • Key Terms
Electronic retailing Cybermall Electronic exchange Market segmentation Technology-enabled relationship management Electronic bill presentment
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E-Commerce Applications:
Retail and Wholesale
Electronic retailing (E-tailing):
the direct sale from business to consumer through electronic storefronts, typically designed around an electronic catalog and shopping cart model www.sharperimage.com
Cybermalls:
a single Web site that offers many products and services at one Internet location http://eshop.msn.com
Wholesale e-commerce: B2B Electronic Exchanges 14
E-Commerce Applications:
Manufacturing
To raise profitability and improve customer service, many manufacturers move their supply chain operations onto the Internet
Electronic exchange:
an electronic forum where manufacturers, suppliers, and competitors buy and sell goods, trade market information, and run back-office operations 15
E-Commerce Applications:
Manufacturing
Figure 5.3: Model of an Electronic Exchange 16
E-Commerce Applications:
Marketing
Market segmentation:
the identification of specific markets to target them with advertising messages
Technology-enabled relationship management:
use of detailed information about a customer’s behavior, preferences, needs, and buying patterns to set prices, negotiate terms, tailor promotions, add product features, and otherwise customize the entire relationship with that customer 17
E-Commerce Applications:
Marketing
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Investment & Finance
Investment and Finance On-line Stock Trading www.sharebuilder.com
On-line Banking
electronic bill presentment
The Motley Fool: http://www.fool.com
Auctions http://www.ebay.com
http://www.whattheheck.com/ebay/ 19
Chapter 5.3
E-commerce Technology, Infrastructure, and Development
• • • • Key Terms
Web site development tools Web page construction software E-commerce software Catalog management software
• • • • • •
Product configuration software Electronic shopping cart Digital certificates Electronic cash Electronic wallet Smart card
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E-commerce Technology, Infrastructure, and Development
Cost, Availability, Reliability, Security, Redundency Catalog, Shopping Cart, Transaction Processing, Traffic Data Analysis Security, Encryption, Delivery, Tracking Dedicated machine that can handle a lot of traffic.
www.cnet.com
Click Internet Services, E-commerce Hosting 21
Hardware
Storage capacity and computing power required of the Web server depends on: Software that will run on the server Volume of e-commerce transactions Web site hosting www.dreamhost.com
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Software
Web site development tools Tools used to develop a web site, including HTML or visual web page editor, software development kits, and web page upload support.
Retrieving and sending Web pages Web page construction Software that uses web editors and extensions to produce both: Static Web pages Dynamic Web pages 23
Software
E-commerce software must support:
Catalog management
Automates the process of creating a real-time interactive catalog and delivering customized content to a user’s screen.
Product configuration
Software used by buyers to build the product they need online E.g. www.dell.com
Electronic shopping cart
A model used to track the items selected for purchase, allow shoppers to view what is in the cart, 24 add new items to it, and remove items from it.
Software
Figure 5.5: Electronic Shopping Cart 25
Electronic Payment Systems
Digital certificate:
an attachment to an e-mail message or data embedded in a Web page that verifies the identity of a sender or a Web site
Electronic cash (e-cash or digital cash)
any of several schemes that allow a person to pay for goods or services by transmitting a number from one computer to another http://www.paypal.com
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Is it safe to provide your bank information using this form?
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Electronic Payment Systems
Electronic wallet:
a computerized stored value that holds credit card information, electronic cash, owner identification, and address information Credit card e.g. VISA, MasterCard Charge card e.g American Express Debit card e.g. Bank Of America
Smart card
A credit card-sized device with an embedded microchip to provide electronic memory and processing capability FSU Card 28
Chapter 5.4
An Overview of Transaction Processing Systems
• • • Key Terms
Batch processing system Online transaction processing (OLAP) Transaction processing
• •
cycle Data collection Data editing
• • • • •
Data correction Data manipulation Data storage Document production Order processing systems
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An Overview of Transaction Processing Systems
Provide data for other business processes: Management information system/decision support system (MIS/DSS) Special-purpose information systems Process the detailed data necessary to update records about the fundamental business operations Include order entry, inventory control, payroll, accounts payable, accounts receivable, and the general ledger.
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An Overview of Transaction Processing Systems
Figure 5.6: TPS, MIS/DSS, and Special Information Systems in Perspective 31
Traditional Transaction Processing Methods and Objectives
Batch processing system:
method of computerized processing in which business transactions are accumulated over a period of time and prepared for processing as a single unit or batch
Online transaction processing (OLTP):
computerized processing in which each transaction is processed immediately, without the delay of accumulating transactions into a batch 32
Transaction Processing Activities
Transaction processing cycle:
the process of data collection, data editing, data correction, data manipulation, data storage, and document production Data collection Data editing Data correction Data manipulation Data storage Document production and reports 33
Transaction Processing Cycle
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Order Processing Systems
Systems that process order entry, sales configuration, shipment planning, shipment execution, inventory control, invoicing, customer relationship management, and outing and scheduling.
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Order Processing Systems
The lifeblood of the organization!
Business Resumption Planning
: Anticipating and minimizing the effects of disasters.
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Customer Order Entry System Shipment Planning System Shipment Execution System Invoicing System
O r d e r P r o c e s s I n g
Inventory Control System
s i n g c h a P u r
Accounts Payable System Receiving System Purchase Order Processing System Warehouse Supplier 37
Chapter 5.5
TPS Control and Management Issues
• • • Key Terms
Business continuity planning Transaction processing system audit Audit trail
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TPS Control and Management Issues
Business continuity planning:
identification of the business processes that must be restored first in the event of a disaster and specification of what actions should be taken and who should take them to restore operations
Audit trail:
documentation that allows the auditor to trace any output from the computer system back to the source documents 39
Transaction Processing System Audit
Does the system meet the business need for which it was implemented?
What procedures and controls have been established?
Are these procedures and controls being used properly?
Are the information systems and procedures producing accurate and honest reports?
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Chapter 5.6
Enterprise Resource Planning
Key Terms •
Best practices
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Enterprise Resource Planning (ERP)
From
Webopedia.com
: a business management system that integrates all facets of the business, including planning, manufacturing, sales, and marketing. Key: Real-time monitoring of business functions http://www.aim.fsu.edu/ 42
ERP
Benefits
Eliminates costly, inflexible legacy systems Improved technology infrastructure Improved work processes Increased data access for decision making
Disadvantages
Expense & time Radical change Integrating with other systems One vendor risks 43
ERP
Best practices
the most efficient and effective ways to complete a business process 44
Review
E-commerce supports electronic business transactions.
Electronic Data Interchange (EDI) uses private VANs for e-commerce.
B2B is huge compared to B2C and C2C.
E-commerce benefits include streamlined business process and opportunities for small businesses.
M-commerce is e-commerce over mobile devices.
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Review
Encryption and Digital Signatures provide security for e-commerce transactions.
TPS facilitates and records business transactions.
There are lots of different kinds of TPSs. Among the most important is the Order Processing System.
ERP provides real time access to business processes.
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Questions?
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