All Organizations Need to Share and Communicate Information... 6-2 Introduction All Organizations Need to Share and Communicate Information... Externally with other organizations Internally among employees. NETWORK - a connection of two or more IT components that gives people the ability to communicate with each other and share software, information, peripheral devices, and processing power. TELECOMMUNICATIONS - the electronic movement of information.

NETWORKS SUPPORT 5 FUNCTIONS 6-4 Networks NETWORKS SUPPORT 5 FUNCTIONS 1. Sharing of software 2. Sharing of information 3. Sharing of peripheral devices 4. Communicating with other people 5. Sharing of processing power

6-5 Networks A PEER-TO-PEER NETWORK provides only two abilities - the ability to communicate with other people and the ability to share peripheral devices. A CLIENT/SERVER NETWORK is a network that contains one or more host computers (called “servers”) that provide some type of service to the other computers (called “clients”). Client/server networks are the emerging blueprint for all networks today. Client/server is both a business and technical implementation model.

CLIENT/SERVER ADVANTAGES & DISADVANTAGES 6-9 Client/Server CLIENT/SERVER ADVANTAGES & DISADVANTAGES Distribution of processing mirrors organizational workings Distribution is transparent Software reuse Servers can control information use Flexibility on the client side Scalability Support for electronic commerce Existence of non-client/server-oriented software Hidden costs Only 30% of client/server costs are tied up in hardware and software. The remaining 70% is in the form of labor - both IT professionals and knowledge workers.

NETWORKS BY GEOGRAPHIC DISTANCE 6-14 Network Technologies NETWORKS BY GEOGRAPHIC DISTANCE LOCAL AREA NETWORK (LAN) - covers a limited geographic distance, such as an office, office building, or a group of buildings within close proximity. WIDE AREA NETWORK (WAN) - covers large geographic distances, such as a state, a country, or even the entire world. The Internet is a WAN. A WAN is often a collection of connected LANs.

COMMUNICATIONS METHODS, STANDARDS, AND PROTOCOLS 6-24 Network Technologies COMMUNICATIONS METHODS, STANDARDS, AND PROTOCOLS Govern the manner in which information moves from one place to another. Constitute the most technically complex aspect of telecommunications and networks. There are literally hundreds of different methods, standards, and protocols. Here, we introduce only a few.

6-25 Network Technologies ETHERNET - a communications standard for connecting components of a LAN that uses a shared communications medium. TOKEN RING - a standard that uses a single electronic token or “clip board” that each component uses in turn to send a transmission within the network. TRANSMISSION CONTROL PROTOCOL/INTERNET PROTOCOL (TCP/IP) - the standard by which the Internet works today. INTEGRATED SERVICES DIGITAL NETWORK (ISDN) - the plan and international communications standard for the transition of the world’s public telephone system from analog to digital for the purpose of transmitting all formats of information simultaneously over twisted-pair telephone lines. X.12 - the standard for transmitting common-formatted information during electronic data interchange (EDI).

6-31 Network Technologies VALUE-ADDED NETWORK a semipublic network that provides additional services beyond the simple communication of information from one place to another. Cost - operate on a pay-as-you-go basis for time and use. Availability - no competition for use. Services - VAN owner provides additional services. Speed - typically faster than public networks. Security - higher than that of public networks.

ELECTRONIC COMMERCE ACTIVITIES AND CONCEPTS In this Chapter 6-35 Electronic Commerce ELECTRONIC COMMERCE ACTIVITIES AND CONCEPTS In this Chapter EXTERNAL ELECTRONIC COMMERCE Ordering products and services Moving money without handling it Reaching the exact customer Gathering competitive intelligence INTERNAL ELECTRONIC COMMERCE Intranets Telecommuting

ELECTRONIC DATA INTERCHANGE (EDI) Ordering Products and Services 6-36 External Electronic Commerce ELECTRONIC DATA INTERCHANGE (EDI) Ordering Products and Services the direct computer-to-computer transfer of transaction information contained in standard business documents, such as invoices and purchase orders, in a standard format. EDI supports IOSs (from Chapter 2) and information partnerships (from Chapter 3) EDI uses X.12 as its standard format

EDI AND YOUR ORGANIZATION 6-37 External Electronic Commerce EDI AND YOUR ORGANIZATION It’s becoming the standard for interorganizational transactions. Many organizations won’t do business with you if you don’t have EDI. EDI supports just-in-time (JIT) processes. Most virtual organizations use EDI to move information electronically.

ELECTRONIC FUNDS TRANSFER (EFT) Moving Money Without Handling IT 6-38 External Electronic Commerce ELECTRONIC FUNDS TRANSFER (EFT) Moving Money Without Handling IT the electronic passing of funds (money) between businesses and banks and their customers. EFT eliminates the movement of all physical instruments, such as checks. Instead, all information (and money) is transmitted electronically (See Figure 6.22 page 240).

6-41 Internal Electronic Commerce INTRANET an internal organizational Internet that is guarded against outside access by special security software. (See Figure 6.25 page 244) An intranet is simply your organization’s version of a private Internet. The special security software that protects against outside access is called a FIREWALL. If you provide outside access to your Intranet, you have an EXTRANET - a special application that allows other organizations and people access to information published on an intranet.

WHAT’S SO GREAT ABOUT INTRANETS? 6-42 Internal Electronic Commerce WHAT’S SO GREAT ABOUT INTRANETS? Intranets support the concept of virtual organizations. Intranets look just like the Internet (complete with Web sites). Most all organizations have intranets (or plan to have them). Most importantly - like the Internet - intranets are platform independent. So, you can use an intranet to connect your entire organization.

6-43 Internal Electronic Commerce TELECOMMUTING using communications technology to work in a place other than a central location. Telecommuters form two groups: 1. Those people required to work outside the office because that’s where the real work is. 2. Those people who can work away from the home office because it doesn’t matter where they perform work. In 1996, over 9 million people telecommuted. How many telecommute today? Telecommuting is only possible because of network technologies.

NETWORK PERFECT SERVICE 6-46 Network Perfect Service NETWORK PERFECT SERVICE occurs at the customer’s moment of value. So, network perfect service includes... Network Reach - where the customer wants it (location) Network Range - how the customer wants it (form) Network Responsiveness - when the customer wants it (time) See Figure 6.28 (page 252) for reach, range, and responsiveness in network perfect service.

6-47 Network Perfect Service NETWORK REACH addresses the people, organizations, and business processes that your network should include. Will the network be limited to a single location? Will the network support people and business processes across all domestic operations? Will the network support international activities? Will the network support customers, distributors, and suppliers?

6-48 Network Perfect Service NETWORK RANGE addresses the information and transactions that must travel across your network. Does your network need to support only basic communications such as e-mail? Does your network need to enable shared information access? Does your network need to support computers that process transactions independently? Does your network need to support computers that process transactions in cooperation?

NETWORK RESPONSIVENESS 6-49 Network Perfect Service NETWORK RESPONSIVENESS addresses the level of service - speed, reliability, and security - your network must provide? Does your network need to support information processing and communications that do not require an immediate response? Does your network need to support information processing and communications that require an immediate response? Does your network need to support on-demand responses to information processing and communications?

NETWORK PERFECT DELIVERY 6-50 Network Perfect Service NETWORK PERFECT DELIVERY the extent to which your organization can meet the where, how, and when characteristics and the extent to which your organization can guarantee those characteristics. 24-hour-a-day availability may not be necessary. But, then again, it may be. Always understand your business needs and let those needs drive your network perfect delivery requirements.