INSY50 - Chapter 5

Electronic Commerce

Conducting business activities electronically over computer networks

Paper Based
Time-Consuming
Inconvenient for Customers

Business activities that are strong candidates for conversion to e-commerce are:

Ubiquity

Available just about everywhere all the time

Global Reach

Permits cross-cultural and national boundaries conveniently and cost-effectively

Universal Standards

The technical standards for conducting e-commerce are shared worldwide and enables linking of computers regardless of their technology platform

Richness

Video, audio, and text messages are possible; delivered to large numbers of people

Interactivity

The technology works through interaction with the user

Information Density

The technology reduces information costs and raises quality

Personalization/Customization

The technology allows personalized messages to be delivered to individuals as well as to groups

Social Technology

The technology supports content generation and social networking

Business-to-consumer
Business-to-business
Consumer-to-consumer

Types of E-commerce:

Business-to-consumer

Involves retailing products and services to individual shoppers

Business-to-business

Involves sales of goods and services among businesses

Consumer-to-consumer

Involves selling directly to consumers

Mobile Commerce

Relies on the use of wireless devices

Hardware

Required storage capacity and computing power

Software

Must have the ability to perform fundamental services

35%

How much sales does m-commerce account for in the fourth quarter of 2015

Electronic Payment Systems

A key component of the e-commerce infrastructure

Authentication technologies

Used by many organizations to confirm the identity of a user requesting access to information or assets

Digital Certificate

An attachment to an e-mail message or data embedded in a web site that verifies the identity of a sender or web site

Certificate authority

A trusted third-party organization or company that issues digital certificates

Address Verification System

A check built into authorization request

Address Verification System

Compares the address on the file with the address provided by the cardholder

Card Verification Number

A check of the additional digits typically printed on the back of the card

Transport Layer Security

A communications protocol used to secure sensitive data during e-commerce

Electronic Cash

An amount of money that is computerized, stored, and used as cash for e-commerce transactions

Transaction Processing Systems

Capture and process detailed data necessary to update the organization’s records about fundamental business operations

Batch Processing System

Business transactions are accumulated over a period of time and prepared for processing as a single unit or batch

Online Transaction Processing

Data processing in which each transaction is processed immediately

Ordering Processing Systems
Accounting Systems
Purchasing Systems

A TPS includes:

Ordering Processing Systems

Flow beings with receipt of the customer order, then finished product inventory is checked to see if sufficient inventory is on hand to fill the order

Accounting Systems

Must track the flow of data related to all the cash follows that affect the organization

Purchasing Systems

Systems that support the purchasing business function

Data collection
Data editing
Data correction
Data manipulation
Data storage
Document production

Transaction Processing Activities:

Data collection

Capturing and gathering all data necessary to complete the processing of transactions

Data Editing

Checking data for validity and completeness to detect any problems

Data Correction

Involves reentering data that was not typed or scanned properly

Data Manipulation

Classifying, sorting, calculating, summarizing

Data Storage

Involves updating one or more databases with new transactions

Document Production

Involves generating output records, documents, and reports

Enterprise Systems

Ensures that information can be shared across all business functions and all levels of management to support the running and managing of a business

Enterprise Resource Planning

A set of integrated programs that manage a company’s vital business operations for an entire organization

Business process

A set of coordinated and related activities that takes one or more kinds of input and creates an output of value to the customer of that process

Customer Relationship Management

Helps a company manage all aspects of customer encounters

Customer Relationship Management

To understand and anticipate the needs of current and potential customers