INSY50-5-E-commerce-and-Enterprise-Systems

Chapter 5: E-commerce and Enterprise Systems

Introduction to Electronic Commerce

• Electronic Commerce: Conducting business activities electronically over computer networks.

• Candidates for E-commerce:

  • Paper-based processes.

  • Time-consuming systems.

  • Inconvenient for customers.

Unique Features of E-commerce Technology

• Ubiquity: Available everywhere at all times.

• Global Reach: Convenient cross-cultural and national transactions.

• Universal Standards: Shared technical standards for e-commerce operations enable different systems to connect.

• Richness: Supports video, audio, and text delivery to large audiences.

Additional Unique Features

• Interactivity: Technology facilitates user interaction.

• Information Density: Reduces costs and improves information quality.

• Personalization/Customization: Delivers tailored messages to individuals and groups.

• Social Technology: Supports content creation and social networks.

Types of E-commerce

• Business-to-Consumer (B2C): Retail products/services to individual shoppers.

• Business-to-Business (B2B): Sales among businesses.

• Consumer-to-Consumer (C2C): Direct transactions between consumers.

Differences among B2B, B2C, and C2C

E-Government

• Uses information and communication technologies to:

  • Share information easily.

  • Speed up previously paper-dependent processes.

  • Improve citizen-government relationships.

• Forms of e-Government:

  • Government-to-Consumer (G2C)

  • Government-to-Business (G2B)

  • Government-to-Government (G2G)

Mobile Commerce (M-commerce)

• Definition: Consumers engage in e-commerce via wireless devices.

• Statistics: M-commerce represented 35% of retail e-commerce sales in Q4 2015.

• Advantages:

  • Expands customer reach.

  • Lowers operational costs.

  • Speeds up the flow of goods and information.

  • Increases order-processing accuracy.

  • Enhances customer service levels.

E-Commerce Challenges

• Consumer Privacy Concerns: Many adults avoid online purchases due to privacy worries.

• Trust Issues: Building trust in online sellers remains critical.

• Global Challenges: Addressing cultural differences, legal issues, and infrastructure requirements.

Electronic and Mobile Commerce Applications

• Applications in Various Sectors:

  • Retail and wholesale

  • Marketing and advertising

  • Bartering and retargeting

  • Price comparison

  • Investment and finance

Technology Infrastructure Requirements

• Web Performance: Poor website performance can drive customers away.

Hardware Requirements

• Storage and Computing Power: Depend on software requirements and transaction volumes; must be scalable.

Software Requirements

• Core Functions: Must ensure:

  • Security & identification

  • Web page retrieval & transmission

  • Website tracking and development.

Mobile Commerce Hardware and Software

• Users should have a seamless purchasing experience on mobile devices similar to PCs; web applications may require rewriting for accessibility.

Electronic Payment Systems

• Components:

  • Authentication technologies to verify user identities.

  • Digital Certificates: Verify identities in online transactions.

  • Certificate Authority (CA): Trusted entity that issues digital certificates.

Enhancements to Payment Security

• Address Verification System: Matches cardholder and transaction addresses.

• Card Verification Number: Checks security codes typically on the card's back.

• Transport Layer Security (TLS): Ensures secure data communication during e-commerce transactions.

Transaction Processing Systems (TPS)

• Purpose: Captures and processes data to update business records. Fields include:

  • Order entry

  • Inventory control

  • Payroll, etc.

• Outputs Valuable Data: For management, decision support, and knowledge management systems.

Traditional Transaction Processing Methods

• Batch Processing: Accumulates transactions and processes them collectively at scheduled intervals.

• Online Transaction Processing (OLTP): Processes each transaction in real-time, keeping data current.

Transaction Processing System Expectations

• Expectations:

  • Accurate data processing

  • Fraud prevention

  • Generate timely responses and reports.

  • Enhance service and operational efficiency.

TPS Components

• Order Processing: Checks inventory upon order receipt and adjusts inventory records accordingly.

• Accounting Systems: Track cash flow accurately.

• Purchasing Systems: Facilitate inventory control and purchasing processes.

Transaction Processing Activities

• Cycle Steps:

  • Data collection

  • Data editing and correction

  • Data manipulation

  • Data storage

  • Document production

Enterprise Systems

• Goals: Enable information sharing across all business functions and improve operations.

• Benefits: Enhance service delivery, reduce costs, and support daily business activities.

Enterprise Resource Planning (ERP)

• Definition: Integrated programs managing vital business operations organization-wide.

• Business Processes: Set activities transforming inputs into valuable outputs for customers.

ERP Evolution and Benefits

• Origin: Evolved from materials requirement planning (MRP) systems in the 1970s.

• Benefits:

  • Improved data access

  • Elimination of legacy systems

  • Enhanced work processes

  • Standardized technology infrastructures.

Customer Relationship Management (CRM)

• Purpose: Manage all customer interactions and anticipate needs.

• Uses: Primarily in sales, marketing, and service sectors.

• Key Features: Contact management, sales management, customer support, and marketing automation among others.

Overcoming Implementation Challenges in Enterprise Systems

• Challenges:

  • Integration complexities with existing systems.

  • High implementation costs and timelines.

  • Resistance to organizational change.

  • Software customization expenses and delays.

  • User training and adjustment frustrations.

Tips for Successful Implementation

• Recommendations:

  • Assign dedicated project management.

  • Utilize experienced oversight resources.

  • Allocate time for transition and training.

  • Clearly define project scope and assessment metrics.

Summary

• E-commerce and m-commerce evolve, presenting both benefits and challenges.

• Comprehensive planning for technology infrastructure is essential.

• Implementing an enterprise system creates integrated systems leading to broad business benefits.