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Ch 5 - Electronic and Mobile Commerce and Enterprise Systems

  • Electronic Commerce: conducting business activities electronically over computer networks

  • 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

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

    Table of Factors

  • 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

  • Forms of E-Government:

    1. Government-to-Consumer (G2C)

    2. Government-to-Business (G2C)

    3. Government-to-Government (G2G)

  • 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

  • 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

  • Model of Electronic exchange

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

    • Data Collection:

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

Transaction processing cycle

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

  • Data collection __could__be manual or automated via special input devices

  • POS Transaction Processing System: Transaction processing system

  • Data Editing: checking data for validity and completeness to detect any problems

    • Examples: quantity and cost data must be numeric, names must be alphabetic

  • Data Correction: reentering data that was not typed or scanned properly

    • Error messages must specify the problem so proper corrections can be made

  • 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

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

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

  • 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

  • A TPS usually includes the following types of systems:

    • Order processing systems

    • Accounting systems

    • Purchasing systems

  • 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

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

  • 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

  • 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

  • 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

  • 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

  • Process for developing a production plan:

    • Sales forecasting

    • Sales and operations plan (S&OP)

    • Demand management

    • Detailed scheduling

    • Materials requirement planning (MRP)

    • Purchasing

    • Production

  • Financial and Managerial Accounting

    • General ledger: main accounting record of a business

  • 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

  • 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

  • Advantages & Disadvantages:
    Advantages and Disadvantages

    • 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

Ch 5 - Electronic and Mobile Commerce and Enterprise Systems

  • Electronic Commerce: conducting business activities electronically over computer networks

  • 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

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

    Table of Factors

  • 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

  • Forms of E-Government:

    1. Government-to-Consumer (G2C)

    2. Government-to-Business (G2C)

    3. Government-to-Government (G2G)

  • 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

  • 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

  • Model of Electronic exchange

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

  • 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

    • Data Collection:

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

Transaction processing cycle

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

  • Data collection __could__be manual or automated via special input devices

  • POS Transaction Processing System: Transaction processing system

  • Data Editing: checking data for validity and completeness to detect any problems

    • Examples: quantity and cost data must be numeric, names must be alphabetic

  • Data Correction: reentering data that was not typed or scanned properly

    • Error messages must specify the problem so proper corrections can be made

  • 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

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

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

  • 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

  • A TPS usually includes the following types of systems:

    • Order processing systems

    • Accounting systems

    • Purchasing systems

  • 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

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

  • 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

  • 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

  • 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

  • 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

  • Process for developing a production plan:

    • Sales forecasting

    • Sales and operations plan (S&OP)

    • Demand management

    • Detailed scheduling

    • Materials requirement planning (MRP)

    • Purchasing

    • Production

  • Financial and Managerial Accounting

    • General ledger: main accounting record of a business

  • 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

  • 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

  • Advantages & Disadvantages:
    Advantages and Disadvantages

    • 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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