Chapter 10 Building E-Commerce Applications and Infrastructure

Learning Objectives Discuss the major steps in developing an EC application Describe the major EC applications and list their major functionalities List the major EC application development options along with their benefits and limitations Describe various EC application outsourcing options Discuss the major components of an electronic catalog and EC application suite

Learning Objectives (cont.) Describe various methods for connecting an EC application to backend systems and databases Describe the criteria used in selecting an outsourcing vendor and package Understand the value and uses of EC application log files Discuss the importance and difficulties of EC application maintenance

Tracking United Parcel Service (UPS) Shipments The Problem UPS has provided the means for customers to track their shipments to determine the status and whereabouts of a particular package for some time this was accomplished over the telephone Customers would call UPS with the tracking number Operator would look up the status of the shipment and relay the information to the customer Servicing cost about $2 per call

Tracking United Parcel Service (UPS) Shipments (cont.) The Solution UPS created a Web site (ups.com) in 1996-97 that enabled customers to: Track their shipments online Determine the cost and transit time for delivery of a package Schedule a package for pickup Locate the nearest drop-off facility

Tracking United Parcel Service (UPS) Shipments (cont.) The Results UPS site services over 4 million online tracking requests per day Also offers: Option of tracking their packages through wireless devices A set of e-commerce solutions and a technology infrastructure that enables other companies to incorporate UPS’ online order entry, shipping, and tracking capabilities E-commerce tools and services for managing a an enterprises’ overall supply chain

Landscape and Framework of EC Application Development Development process Step 1: EC architecture creation plan includes: Business goals and vision for the site Information and data required to fulfill the goals and vision Application modules that will deliver and manage the information and data Specific hardware and software on which the application modules will run, Human resources and procedures for implementing the architecture

Landscape and Framework of EC Application Development (cont.) Step 2: Select a development option—developed in-house, outsourced to another party, or some combination of both Step 3: Installing, testing, and deploying Unit testing—testing application software modules one at a time Integration testing—testing the combination of application modules acting in concert Usability testing –testing quality of the user’s experience when interacting with a Web site Acceptance testing—determining whether a Web site meets the original business objectives and vision Step 4: Operation and maintenance—should be continually updated

Major EC Applications and Their Functionalities A storefront should offer buyers the means to: Discover, search, evaluate, and compare products Select product ad negotiate price Place an order using a shopping cart Payment of purchase usually on credit Order confirmation Track orders once they are shipped

Major EC Applications and Their Functionalities (cont.) Merchant’s needs to: Provide access to personalized catalogs Provide electronic shopping cart Verify customer credit and approve purchases Process the orders (back-end services) Arrange for product delivery Track shipments to make sure they are delivered Provide the means for buyers and visitors to register, make comments, or request additional information

Major EC Applications and Their Functionalities (cont.) Merchants (cont.) Answer customers’ questions Analyze purchases in order to customize buyers’ experiences Provide Web-based post-sale support Create the capability for cross-sell and up-sell Provide language translation if needed Measure and analyze the traffic at the site

Major EC Applications and Their Functionalities (cont.) A storefront must contain three interrelated subsystems: Merchant system or storefront that provides the merchant’s catalog and shopping cart Transaction system for processing orders, payments, and other aspects of the transaction Payment gateway that routes payments through existing financial systems

Major EC Applications and Their Functionalities (cont.) Supplier sell-side site: Personalized catalogs and Web pages for all major buyers B2B payment gate Electronic contract negotiation features Product configuration by customers Affiliate program capabilities Business alerts

Major EC Applications and Their Functionalities (cont.) Procurement E-procurement site is an online intermediary that offers businesses access to hundreds of parts and services provided by suppliers Catalog Management Collaborative Planning On-line Purchase Purchase Order Handling Document Service Historical Performance Service Information Service System Administration

Major EC Applications and Their Functionalities (cont.) Aggregating catalogs Search engine for locating items with particular characteristics Comparison engine for alternative vendors Ordering mechanism Budget and authorization feature Usage comparisons (among various departments) Payment mechanism (e.g., use of a purchasing card)

Major EC Applications and Their Functionalities (cont.) Reverse auctions Catalog of items to be tendered and their content management Search engine Personalized pages for potential large bidders Reverse auction mechanism Facility to help prepare, issue, manage, and respond to a buyer’s requests for quotes (RFQs) Ability to bid dynamically Automatic vendor approval and workflow

Major EC Applications and Their Functionalities (cont.) Reverse auctions (cont.) Electronic collaboration with trading partners Standardization of RFQ writing A site map A mechanism for selecting suppliers to participate Automatic matching of suppliers with RFQs Automatic business process workflow Ability for bidders to use m-commerce for bidding Automated language translation

Major EC Applications and Their Functionalities (cont.) Exchanges Collaboration services Community services Web-automated workflow Integrated business process solutions Central coordination of global logistics Integration services

Major EC Applications and Their Functionalities (cont.) Exchanges (cont.) Data mining, customized analysis and reporting, real-time transactions, trend and customer behavior tracking Transaction flow managers Negotiation mechanisms Language translation Comprehensive links to related resources

Development Options for EC Applications Insourcing—in-house development of applications Development approaches Build from scratch Build from components Prototyping methodology

Development Options for EC Applications (cont.) Buy the applications (turnkey approach) Disadvantages Software doesn’t exactly fit needs May be difficult to modify Loss of control over improvements and versions Difficult to integrate Vendors may drop product or go out of business Advantages Availability of many off-the-shelf packages Saves time Requires few dedicated personnel Company knows what it is getting Not the first and only user of the software

Development Options for EC Applications (cont.) Lease Types of leasing vendors Lease the application from an outsourcer and install it on company premises Use an application system provider (ASP) Application service provider (ASP) A company that provides business applications to users, for a small monthly fee—go online to use the equipment and software that resides with the ASP

Development Options for EC Applications (cont.) Other development options E-marketplaces, exchanges, auctions, or reverse auctions Joint ventures and consortia Internet malls ISPs Telecommunications companies Software houses

Criteria for Selecting a Development Approach Flexibility Information requirements User friendliness Hardware and software resources Installation Maintenance services Vendor quality and track record Estimating costs Measuring benefits Personnel Technology evolution Scaling Sizing Performance Reliability Security

Third-Party EC Components and Suites Electronic catalogs Virtual-world equivalent of traditional product catalog, containing product descriptions and photos, along with information about various promotions, discounts, payment methods, and methods of delivery Merchant server software Electronic catalog

Third-Party EC Components and Suites (cont.) Features of electronic catalogs Templates or wizards for creating a storefront and catalog pages Electronic shopping carts Web-based order forms for making secure purchases A database for maintaining product descriptions, pricing, and customer orders Integration with third-party software for calculating taxes and shipping costs and for handling distribution and fulfillment

Third-Party EC Components and Suites (cont.) EC suite—combined set of tools giving builder and users: Greater flexibility Specialization Customization Integration Support for complete functionality

EC Suites Internetworld Commerce Suite Websphere Commerce Suite Channel marketing Order management Account management Customer service Websphere Commerce Suite Order management Collaborative filters Portal capabilities Multicultural support E-coupons Additional bundled products Catalog manager Payment manager

Connecting to Databases and Other Enterprise Systems Multi-tiered application architecture EC architecture consisting of four tiers Web browser—data presented to and collected from the user Web server—delivers Web pages Application server—executes business rules Database server—data is stored, managed, and requests processed

Connecting to Databases and Other Enterprise Systems (cont.) Enterprise application integration Aims to integrate applications (including internal applications) that have been developed by different organizations If source code is unavailable (altering the application is not possible), EAI becomes the glue between the applications

Vendor and Software Selection Steps in selecting software package Identification potential vendors Determination the evaluation criteria Evaluate vendors and packages Choose a vendor and package Negotiate a contract Establish service level agreement

Vendor and Software Selection (cont.) Identification potential vendors; eliminate: Too small vendors Vendors with questionable reputations Packages without required features Packages that don’t fit with hardware, operating system, network, etc.

Vendor and Software Selection (cont.) Determination the evaluation criteria Characteristics of the vendor Functional requirements of the system Technical requirements the software must satisfy Amount and quality of documentation provided Vendor support of the package

Vendor and Software Selection (cont.) Evaluate vendors and packages determine the gaps between Company’s needs as specified by the requirements Capabilities of the vendors and their application packages

Vendor and Software Selection (cont.) Choose a vendor and package Additional development effort required to tailor the system to the company’s needs or to integrate it into the company’s environment Opinions of users and IT personnel who will have to use and support the system

Vendor and Software Selection (cont.) Negotiate a contract Specify price of software Determines the type and amount of support to be provided by the vendor Use software purchasing specialists who assist in negotiations and write or approve the contract

Vendor and Software Selection (cont.) Establish service level agreement Formal agreements regarding the division of work between a company and its vendors Define the partners’ responsibilities Provide framework for designing support services Allow company to retain as much control as possible over their own systems

Usage Analysis and Site Management Access log A record kept by a Web server of every time a user accesses the server; kept in a common log file format, each line of this text file details an individual access Pageviews by time bucket Pageviews by customer logging-in status Pageviews by referrer Pageviews by visitor’s hardware platform, OS, browser and/or browser version Pageviews by visitor’s host

Site Management and Usage Analysis (cont.) E-commerce management tools from BMC Corp. at bmc.com Patrol for e-business management Measures Web response time Firewall administration Application servers: Patrol for Microsoft Open market Netscape

Managerial Issues What is our business perspective? Do we have a systematic development plan? Insource or outsource? How should we choose a vendor/software? Have we analyzed the data?

Summary Discuss the major steps in developing an EC application Describe the major EC applications and list their major functionalities List the major EC application development options along with their benefits and limitations Describe various EC application outsourcing options Discuss the major components of an electronic catalog and EC application suite

Summary (cont.) Describe various methods for connecting an EC application to backend systems and databases Describe the criteria used in selecting an outsourcing vendor and package Understand the value and uses of EC application log files Discuss the importance and difficulties of EC application maintenance