Electronic Commerce and Transaction Processing Systems

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Chapter 5

• Electronic Commerce and Transaction Processing
  Systems

• An Introduction to Electronic Commerce
• E-Commerce Applications
• E-Commerce Technology Components
• Strategies for Successful E-Commerce
• An Overview of Transaction Processing Systems
• Enterprise Resource Planning

Topics
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An Introduction to Electronic Commerce
Chapter 5.1
Key Terms

• Business-to-consumer
• (B2C) e-commerce
• Business-to-business
• (B2B) e-commerce
• Consumer-to-consumer
• (C2C) e-commerce
• Supply chain management

• Electronic data
• interchange (EDI)
• Mobile commerce
• (m-commerce)

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E-commerce

• Business activities conducted using electronic
  data transmission involving computers,
  telecommunications networks, and streamlined work
  processes.

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E-commerce History
VAN
Transaction
EDISoftware
Company B
Transaction
EDISoftware
Company A
Electronic Data Interchange (EDI) EDI uses
private network communications networks called
value-added networks (VANs) to transmit
standardized transaction data between business
partners and suppliers.
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Benefits of E-Commerce?

• Businesses use E-Commerce to
• Reduce transaction costs
• Speed the flow of goods and info
• Improve customer service
• Enable close coordination of actions among
  manufacturers, suppliers, and customers
• Gain access to worldwide markets

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E-commerce can dramatically extend a businesses
market. Farmyard Nurseries customer base before
and after e-commerce. http//www.farmyardnurseries
.co.uk/mail.htm.
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Challenges of E-Commerce

• Change distribution systems work processes
• Integrate web-based order processing with
  traditional systems

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The E-Commerce Supply Chain

• Supply chain management is a key value chain
  composed of
• Demand planning
• Supply planning
• Demand fulfillment

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The E-Commerce Supply Chain
Figure 5.1 Supply Chain Management
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E-Commerce Segmentation

• Business to Business (B2B)
• Private

• Consumer to Consumer (C2C)
• eBay.com
• Half.com

• Business to Consumer (B2C)
• Amazon.com
• BestBuy.com

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E-Commerce Segmentation
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M-commerce

• M-commerce E-commerce over mobile devices like
  smartphones.
• digital goods
• proximity payment systems
• distance goods

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E-commerce Applications
Chapter 5.2
Key Terms

• Electronic retailing
• Cybermall
• Electronic exchange
• Market segmentation
• Technology-enabled
• relationship management
• Electronic bill presentment

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E-Commerce Applications Retail and Wholesale

• Electronic retailing (E-tailing) the direct sale
  from business to consumer through electronic
  storefronts, typically designed around an
  electronic catalog and shopping cart model
• www.sharperimage.com
• Cybermalls a single Web site that offers many
  products and services at one Internet location
• http//eshop.msn.com
• Wholesale e-commerce B2B
• Electronic Exchanges

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E-Commerce Applications Manufacturing

• To raise profitability and improve customer
  service, many manufacturers move their supply
  chain operations onto the Internet
• Electronic exchange an electronic forum where
  manufacturers, suppliers, and competitors buy and
  sell goods, trade market information, and run
  back-office operations

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E-Commerce Applications Manufacturing
Figure 5.3 Model of an Electronic Exchange
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E-Commerce Applications Marketing

• Market segmentation the identification of
  specific markets to target them with advertising
  messages
• Technology-enabled relationship management use
  of detailed information about a customers
  behavior, preferences, needs, and buying patterns
  to set prices, negotiate terms, tailor
  promotions, add product features, and otherwise
  customize the entire relationship with that
  customer

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E-Commerce Applications Marketing
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Investment Finance

• Investment and Finance
• On-line Stock Trading
• www.sharebuilder.com
• On-line Banking
• electronic bill presentment
• The Motley Fool http//www.fool.com
• Auctions
• http//www.ebay.com
• http//www.whattheheck.com/ebay/

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E-commerce Technology, Infrastructure, and
Development
Chapter 5.3
Key Terms

• Web site development
• tools
• Web page construction
• software
• E-commerce software
• Catalog management
• software

• Product configuration
• software
• Electronic shopping cart
• Digital certificates
• Electronic cash
• Electronic wallet
• Smart card

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E-commerce Technology, Infrastructure, and
Development
Cost, Availability, Reliability, Security,
Redundency
Catalog, Shopping Cart, Transaction Processing,
Traffic Data Analysis
Security, Encryption, Delivery, Tracking

• Dedicated machine that can handle a lot of
  traffic.

www.cnet.com Click Internet Services, E-commerce
Hosting
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Hardware

• Storage capacity and computing power required of
  the Web server depends on
• Software that will run on the server
• Volume of e-commerce transactions
• Web site hosting
• www.dreamhost.com

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Software

• Web site development tools
• Tools used to develop a web site, including HTML
  or visual web page editor, software development
  kits, and web page upload support.
• Retrieving and sending Web pages
• Web page construction
• Software that uses web editors and extensions to
  produce both
• Static Web pages
• Dynamic Web pages

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Software

• E-commerce software must support
• Catalog management
• Automates the process of creating a real-time
  interactive catalog and delivering customized
  content to a users screen.
• Product configuration
• Software used by buyers to build the product they
  need online E.g. www.dell.com
• Electronic shopping cart
• A model used to track the items selected for
  purchase, allow shoppers to view what is in the
  cart, add new items to it, and remove items from
  it.

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Software
Figure 5.5 Electronic Shopping Cart
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Electronic Payment Systems

• Digital certificate an attachment to an e-mail
  message or data embedded in a Web page that
  verifies the identity of a sender or a Web site
• Electronic cash (e-cash or digital cash)
• any of several schemes that allow a person to pay
  for goods or services by transmitting a number
  from one computer to another
• http//www.paypal.com

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Is it safe to provide your bank information using
this form?
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Electronic Payment Systems

• Electronic wallet a computerized stored value
  that holds credit card information, electronic
  cash, owner identification, and address
  information
• Credit card e.g. VISA, MasterCard
• Charge card e.g American Express
• Debit card e.g. Bank Of America
• Smart card
• A credit card-sized device with an embedded
  microchip to provide electronic memory and
  processing capability

FSU Card
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An Overview of Transaction Processing Systems
Chapter 5.4
Key Terms

• Batch processing system
• Online transaction
• processing (OLAP)
• Transaction processing
• cycle
• Data collection
• Data editing

• Data correction
• Data manipulation
• Data storage
• Document production
• Order processing systems

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An Overview of Transaction Processing Systems

• Provide data for other business processes
• Management information system/decision support
  system (MIS/DSS)
• Special-purpose information systems
• Process the detailed data necessary to update
  records about the fundamental business operations
• Include order entry, inventory control, payroll,
  accounts payable, accounts receivable, and the
  general ledger.

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An Overview of Transaction Processing Systems
Figure 5.6 TPS, MIS/DSS, and Special Information
Systems in Perspective
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Traditional Transaction Processing Methods and
Objectives

• Batch processing system method of computerized
  processing in which business transactions are
  accumulated over a period of time and prepared
  for processing as a single unit or batch
• Online transaction processing (OLTP)
  computerized processing in which each transaction
  is processed immediately, without the delay of
  accumulating transactions into a batch

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Transaction Processing Activities

• Transaction processing cycle the process of data
  collection, data editing, data correction, data
  manipulation, data storage, and document
  production
• Data collection
• Data editing
• Data correction
• Data manipulation
• Data storage
• Document production and reports

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Transaction Processing Cycle
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Order Processing Systems

• Systems that process order entry, sales
  configuration, shipment planning, shipment
  execution, inventory control, invoicing, customer
  relationship management, and outing and
  scheduling.

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Order Processing Systems
The lifeblood of the organization!
Business Resumption Planning Anticipating and
minimizing the effects of disasters.
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OrderEntry System
Order ProcessIng
Purchasing
AccountsPayableSystem
Customer
Supplier
ShipmentPlanning System
ReceivingSystem
ShipmentExecutionSystem
PurchaseOrder Processing System
Invoicing System
InventoryControl System
Warehouse
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TPS Control and Management Issues
Chapter 5.5
Key Terms

• Business continuity
• planning
• Transaction processing
• system audit
• Audit trail

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TPS Control and Management Issues

• Business continuity planning identification of
  the business processes that must be restored
  first in the event of a disaster and
  specification of what actions should be taken and
  who should take them to restore operations
• Audit trail documentation that allows the
  auditor to trace any output from the computer
  system back to the source documents

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Transaction Processing System Audit

• Does the system meet the business need for which
  it was implemented?
• What procedures and controls have been
  established?
• Are these procedures and controls being used
  properly?
• Are the information systems and procedures
  producing accurate and honest reports?

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Enterprise Resource Planning
Chapter 5.6
Key Terms

• Best practices

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Enterprise Resource Planning (ERP)

• From Webopedia.com a business management system
  that integrates all facets of the business,
  including planning, manufacturing, sales, and
  marketing.
• Key Real-time monitoring of business functions

http//www.aim.fsu.edu/
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ERP

• Benefits
• Eliminates costly, inflexible legacy systems
• Improved technology infrastructure
• Improved work processes
• Increased data access for decision making

• Disadvantages
• Expense time
• Radical change
• Integrating with other systems
• One vendor risks

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ERP

• Best practices
• the most efficient and effective ways to complete
  a business process

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Review

• E-commerce supports electronic business
  transactions.
• Electronic Data Interchange (EDI) uses private
  VANs for e-commerce.
• B2B is huge compared to B2C and C2C.
• E-commerce benefits include streamlined business
  process and opportunities for small businesses.
• M-commerce is e-commerce over mobile devices.

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Review

• Encryption and Digital Signatures provide
  security for e-commerce transactions.
• TPS facilitates and records business
  transactions.
• There are lots of different kinds of TPSs. Among
  the most important is the Order Processing
  System.
• ERP provides real time access to business
  processes.

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Questions?
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