Ch 5 - Electronic and Mobile Commerce and Enterprise Systems

• Electronic Commerce: conducting business activities electronically over computer networks

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• Types of E-Commerce:

  1. Business-to-business (B2B): all participants are organisations. It is a useful tool for connecting business partners in a virtual supply chain to cut resupply times and reduce costs

  2. Business-to-Consumer (B2C): where customers deal directly with an organisation and avoid intermediaries

  3. Consumer-to-Consumer (C2C): Involves consumers selling directly to other consumers. Example: craigslist, eBid, bidzcom

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• Disintermediation: the elimination of intermediate organisations between the producer and the consumer

  

• E-Government: use of information and communications technology to:

  • Simply the sharing of information
  • Speed formerly paper-based processes
  • Improve the relationship between citizen and government

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• Forms of E-Government:

  1. Government-to-Consumer (G2C)
  2. Government-to-Business (G2C)
  3. Government-to-Government (G2G)

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• Mobile-commerce (m-commerce) relies on the use of wireless devices

  • The Internet Corporation for Assigned Names and Numbers (ICANN):

  • Created a .mobi domain to attract mobile users to the web

  • M-commerce will succeed only if it provides users with real benefits

  • B2B, B2C, C2C, and m-commerce are used in: retail and wholesale, manufacturing, marketing and advertising, price comparison, couponing, investment and finance, banking and e-boutiques

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• Electronic Retailing (e-tailing):

  • Direct sale from business to consumer through electronic storefronts

• Cybermall:

  • Single web site that offers many products and services at one internet location

• Manufacturing, repair, and operations (MRO):

  • Purchases often approach 40% of a manufacturing company’s total revenue

• Manufacturing:

  • Electronic exchange: electronic forum where manufacturers, suppliers, and competitors buy and sell goods, trade market information, and run back-office operations
  • Private exchange: owned and operated by a single company
  • Public exchanges: owned and operated by industry groups
  • Market segmentation: identification of specific markets to target them with advertising messages

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• Advertising:

  • Mobile and impressions are generally bought at cost per thousand (CPM), cost per click (CPC), or cost per action (CPA)
  • Price comparison: mobile phones services enable shoppers to compare prices and products on the web
  • Couponing: shoppers can subscribe to mobile coupon aggregators

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• Investment and Finance:

  • The Internet: revolutionised the world of investment and finance
  • The brokerage business: adapted to the internet faster than any other arm of finance
  • Online banking customers can check balances, transfer money, and pay their bills

• Hardware:

  • Key e-commerce infrastructure factor: web server hardware platform complete with the appropriate software
  • Key decision facing new e-commerce companies: to host their own web site or let someone else do it

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• Each e-commerce website must have web server software to perform fundamental services:

  • Security and identification

  • Retrieval and sending of web pages

  • Web site tracking

  • Website development

  • Web page development

  • Difference between web page and web site is that a website is the entire site, whereas a web page is the first page of the web site

  • The E-Commerce Software should be able to manage the catalogue, configure products to help customers, have shopping cart facilities, e-commerce transaction processing, and web traffic data analysis

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• M-Commerce Hardware and Software: For the m-commerce to work effectively, the interface between the wireless, handheld device and its user must improve

  • Encryption can provide secure transmission
  • Wireless Application Protocol (WAP): standard set of specifications for internet applications that run on handheld, wireless devices

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• Electronic Payment Systems:
  • Digital certificate: attachment in a website that verifies the identity of a sender or website
  • Certificate authority (CA): trusted third party organisation that issues digital certificates
  • Secure sockets layer (SSL): used to secure sensitive data
  • Electronic cash: amount of money that is computerised for e-commerce transactions
  • Smart card: card sized device with a microchip for electronic memory and processing capability
  • P-card: credit card used to streamline the traditional purchase order and invoice payment process

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• Transaction Processing Systems (TPS):
  • Can capture detailed data necessary to update records about fundamental business operations
  • Include order entry, inventory control, payroll account payable
  • Provide employees with data to help them achieve their goals

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• Traditional transaction processing methods and objectives

  • Batch processing system:
  • Data processing of business transactions as they accumulate over a period of time and are prepared for processing as a single unit or batch
  • Online transaction processing (OLTP):
  • Data processing in which each transaction is processed immediately

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• Transaction Processing System: an information processing system for business transactions involving the collection, modification and retrieval of all transaction data.

  • TPS captures and processes data that describes fundamental business transactions
  • Updates databases
  • Produces a variety of reports

• Transaction processing cycle:

  • The process of data collection, data editing, data correction, data manipulation, data storage, and document production

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  • Data Collection:
  • Capturing and gathering all data necessary to complete the processing of transactions

  

• Data collection should be collected at source, recorded accurately, in a timely fashion

• Data collection couldbe manual or automated via special input devices \n

• POS Transaction Processing System:

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• Data Editing: checking data for validity and completeness to detect any problems
  • Examples: quantity and cost data must be numeric, names must be alphabetic

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• Data Correction: reentering data that was not typed or scanned properly
  • Error messages must specify the problem so proper corrections can be made

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• Data Manipulation: performing calculations and other data transformations related to business transactions
  • Can include: classifying data, sorting data into categories, performing calculations, summarising results, storing data in the organisation’s database for further processing

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• Data Storage: updating one or more databases with new transactions

  • After being updated, this data can be further processed and manipulated by other systems

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• Document Production and Reports:

  • Generating output records, documents, and reports
  • Hard-copy paper reports
  • Displays on computer screens
  • Results from one TPS can be inputs to another system

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• A TPS usually includes the following types of systems:

  • Order processing systems
  • Accounting systems
  • Purchasing systems

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• Enterprise Resource Planning: software used by a company to manage key parts of operations, including accounting and resource management

• ERP systems:

  • Central to the organisation
  • Ensure information can be shared across all business functions
  • Employ a database of key operational and planning data that can be shared by all

  

• ERP systems evolved from materials requirement planning system (MRP). Large organisations are the first to take on the challenge of implementing ERP

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• Advantages of ERP:
  • Improved access to data for operational decision making
  • Elimination of costly, inflexible legacy systems
  • Improvement of work processes
  • Upgrade of technology infrastructure

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• Disadvantages of ERP:
  • Expense and time in implementation
  • Difficulty implementing change
  • Difficulty integrating with other systems
  • Difficulty in loading data into new ERP system
  • Risks in using one vendor
  • Risk of implementation failure

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• ERP for small and medium-size enterprises (SMEs):
  • Many SMEs elect to implement open-source ERP systems
  • Anyone can see and modify the source code to customise it to meet their needs with open-source software

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• Supply Chain Management is the management of the flow of goods and services and includes all processes that transform raw materials into final products
• It includes:
  • Planning, executing, and controlling all activities involved in raw material sourcing and procurement
  • Converting raw materials to finished products and warehousing and delivering finished product to customers

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• Process for developing a production plan:

  • Sales forecasting
  • Sales and operations plan (S&OP)
  • Demand management
  • Detailed scheduling
  • Materials requirement planning (MRP)
  • Purchasing
  • Production

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• Financial and Managerial Accounting

  • General ledger: main accounting record of a business

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• ERP system:

  • Captures transitions entered by workers in all function areas of a business
  • Creates associated general ledger record to track the financial impact of the transaction

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• Hosted software model for enterprise software: means the small business firm does not need to employ a full-time IT person to maintain key business applications

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• Advantages & Disadvantages: \n

  • Challenges faced by multinational corporations when planning, building, and operating their TPSs:

  • Dealing with different languages and cultures

  • Disparities in IS infrastructure

  • Varying laws and customs rules

  • Multiple currencies

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