Principles and Learning Objectives E-commerce is a new way of conducting business, and as with any other new application of technology, it presents both opportunities for improvement and potential problems. E-commerce requires the careful planning and integration of a number of technology infrastructure components. An organization’s transaction processing system (TPS) must support the routine, day-to-day activities that occur in the normal course of business and help a company add value to its products and services. Implementation of an enterprise resource planning (ERP) system enables a company to achieve many benefits by creating a highly integrated set of systems.

Ebake.com

Revenue Paradigm

Business advantages of B2B include: Managing __________ more efficiently Adjusting more quickly to customer demand Getting products to market faster Obtaining __________ prices on supplies Sales - Cost of goods sold Gross margin - Expenses Net income

Business advantages of B2C include: Access to a wider __________ of products and services Access to products at lower costs __________ for transactions or for obtaining information Sales - Cost of goods sold Gross margin - Expenses Net income Ebake.com

The E-Commerce Supply Chain __________ Figure 5.1: Supply Chain Management

The E-Commerce Supply Chain (continued) E-commerce supply chain management allows businesses an opportunity to achieve: Increased __________ and decreased costs Improved customer satisfaction Inventory reduction across the supply chain Amazon Distribution

Mobile Commerce Mobile commerce (m-commerce) relies on the use of wireless devices, such as personal digital assistants, cell phones, and smart phones, to place orders and __________ business Issues confronting m-commerce User-friendliness of the wireless device Network speed Security __________

Mobile Commerce (continued) Handheld devices used for m-commerce have limitations that complicate their use Wireless application protocol (WAP): a standard set of specifications for Internet __________ that run on handheld, wireless devices

E-Commerce Applications Retail and Wholesale Manufacturing Marketing Investment and Finance Auctions __________

E-commerce Technology, Infrastructure, and Development __________ Figure 5.4: Key E-Commerce Technical Components

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 __________ hosting __________

Software Security and identification Retrieving and __________ Web pages Web page construction Static Web page Dynamic Web page E-commerce software must support: Catalog __________ Product configuration Shopping-cart facilities

Electronic Payment Systems Electronic cash Electronic wallets Smart cards Credit cards Debit cards Charge cards __________

An Overview of Transaction Processing Systems Provide data for other __________ 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 __________ , accounts receivable, and the general ledger.

An Overview of Transaction Processing Systems (continued) Figure 5.6: TPS, MIS/DSS, and Special Information Systems in Perspective

Traditional Transaction Processing Methods and Objectives (continued) __________ Figure 5.7: Batch Versus Online Transaction Processing

Transaction Processing Activities TPSs Capture and process data that describes fundamental business transactions Update databases Produce a variety of reports

Transaction Processing Activities (continued) __________ Figure 5.8: Data Processing Activities Common to TPSs

Basic TPS Applications Table 5.4: Systems That Support Order Processing

Order Processing Systems Order entry Sales configuration Shipment planning Shipment execution Inventory control Invoicing Customer relationship management Routing and scheduling

Order Processing Systems (continued) Figure 5.10: Order Processing Systems APL Fulfillment

Purchasing and Accounting Systems Purchasing transaction processing systems include: Inventory control Purchase-order processing Receiving Accounts payable

Purchasing and Accounting Systems (continued) Accounting transaction processing systems include: Budget Accounts receivable Payroll Asset management General ledger

Purchasing and Accounting Systems (continued) Figure 5.11: Integration of a Firm’s TPSs

TPS Control and Management Issues Business continuity planning Transaction Processing System Audit International Issues ( GLOBAL LOGISTICS ) Different languages and cultures Disparities in IS infrastructure Varying laws and customs rules Multiple currencies __________

An Overview of Enterprise Resource Planning Enterprise resource __________ (ERP) systems are used in large, midsized, and small companies Real-time monitoring of business functions Timely analysis of key __________ , such as quality, availability, customer satisfaction, performance, and profitability IN Tech We trust

An Overview of Enterprise Resource Planning Steps in running a manufacturing organization using an ERP system: Develop demand forecast Deduct demand forecast from inventory Determine what is needed for production Check inventory for needed raw materials Schedule production Assess need for additional production resources Financial forecasting __________

Advantages of ERP __________ of costly, inflexible legacy systems Improvement of work processes Increase in access to data for operational decision making __________ of technology infrastructure Advantages and Disadvantages of ERP The primary benefits of implementing ERP include elimination of inefficient systems, easing adoption of improved work processes, improving access to data for operational decision making, and technology standardization. Note, however, that although ERP offers many strategic advantages by streamlining a company’s transaction processing system, it is time consuming, difficult, and expensive to implement.

Disadvantages of ERP Expense and time in implementation __________ implementing change Difficulty integrating with other systems Risks in using one __________ Risk of implementation failure