Info Tech Chapter 5 E-commerce and transactions

Supply Chain Management

System that includes planning, executing, and controlling all activities involved in raw material sourcing and procurement

Business to Business (B2B)

A subset of e-commerce in which all the participants are organizations.

Business to Consumer (B2C)

Elimination of intermediate organization between producer and consumer
-Growth due to personalization

Disintermediation

Consumer deal directly w/ organization

Personalization

Tailoring web pages to specifically target individual consumers
(Also uses social media)

Consumer-to-consumer (C2C)

Electronic transaction between consumers using 3rd party to facilitate process
(Ebay)

E-government

The use of information and communications technology to simplify the sharing of information, speed formerly paper-based processes, and improve the relationship between citizens and government.
(G2C, G2B, G2G)

G2C (Government to Consumer)

Taxes, auto licenses, postage, etc…

G2B (Government to Business)

Buy materials and services from private industries

G2G (Government-to-Government)

Transactions between government entities
(fed, state, or local)

Mobile Commerce

-Relies on use of mobile devices to place order
-Rapidly growing segment of e-commerce

Advantages of e-commerce system

-enable organization to reach new customers
-reduce cost,
-speed flow of goods and info,
-increase accuracy of order processing and fulfilment,
-improve the level of customer service

Reach new customers

Advertising

Reduce costs

eliminating or reducing time-consuming/labor intensive steps throughout order and deliver process.
-More sales completed in the same period

Speed the flow of goods and info

Flow accelerated because electronic connection & communications are already established

Increase Accuracy

Buyers input their own product specifications & eliminate human error

improve Customer Service

-More detailed info of delivery dates and current status
-Increase loyalty
-Consistently meeting customer's desired dates and quality of goods

E-commerce Challenges

1) Dealing w/ customers privacy concerns
2) Overcoming consumer lack of trust
3) Overcoming global issues

1) Dealing w/ customers privacy concerns

Invest in latest security tech

2) Overcoming consumer lack of trust

Give incentives, longevity, show investment in website, brand endorsements, display credentials

3) Overcoming global issues

Cultural challenges, language, times, infrastructure, currency, law challenges

Manufacturing

-Move supply chain onto internet
-Electronic Exchange

Electronic Exchange

Electronic forum where manufacturers, suppliers, and competitors buy and sell goods, trade market information, and run back-office operations

Three Types of Exchange

-Private
-Consortium
-Independent

Private Exchange

Owned by single company (Walmart)

Consortium Exchange

Run by group of traditionally competing companies w/ common procurement needs (Big Three Auto)

Independent Exchange

Open to any set of buyers & sellers within given market

Marketing Segmentation

Identification of specific markets to target them w/ tailored advertising messages
(age, gender, martial status, income)

Advertising

• Mobile ad impressions bought @ cost per thousand (CPM)

• Cost per click (CPC)
  -Cost per action (CPA)
  -Measures success through click through rate (CTR)

Bartering

People & businesses turn to bartering to gain goods and services

Retargeting

74% of online shopping carts are abandoned so personalized ads remind people.

Price Comparison

Shoppers compare prices and products online

Couponing

Digital coupon

Investment Finance

-Brokage business adopted to the internet fast
-Online trading investors do quick through research and buy shares

Banking

Bank stuff online by hand (withdrawal, deposit, send, pay)
(M.Pesa w. 20mil users worldwide more developed mobile payment system)

Successful implementation of E-commerce

Requires changes in IS tech and process

Hardware E-commerce

-Key to e-commerce infrastructure

• Amount of storage capacity depends on (software and volume of transactions being processed)

Key website performance measures include

-Response time (<1 sec)

• Transaction success rate (>=99%)
  -System availability (O minutes unscheduled downtime)

Webserver Software

Perform fundamental services: security & ID, retrieval & sending webpages, website tracking, website development & web page development.

E-commerce Software

(1) catalog management
(2) product configuration
(3) shopping cart
(4) e-commerce transaction processing
(5) web traffic data analysis

Mobile Commerce Hardware and Software

-Interface between mobile device and users must improve
-Network speeds must improve
-Security of transmission & trust transaction was made w/ correct party. (Digital Certificate)

Limitations of Mobile Commerce Hardware and Software

Small screen, tedious, limited battery, less bandwidth

Electronic Payment Systems

-Digital Certificate
-Certificate Authority (CA)

Digital Certificate

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 (CA)

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

Card Verification number

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

Transport layer security (TLS)

A communications protocol or system 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

Types of Electronic Cash

Credit, Charge, Debit & Smart

Credit card

Preset spending limit | unpaid balance gain interest

charge card

A payment type that works just like credit cards except the balance must be paid in full every month.

debit card

A bank card that automatically deducts the amount of a purchase from the checking account of the cardholder

Smart card

a card that contains a computer chip that stores electronic money and facts about user

(PCI)

Payment Card Industry, a set of security standards designed to protect card information during and after a financial transaction.

Safeguards card issuer, card holder, and merchant.