Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-1 Lecture Outline 9 1. Using Information Systems for Competitive Advantage (p ) 2. Highlights of Electronic Business (p )

Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-2 Strategy and Competitive Advantage How to get Competitive Advantage *MC Having the best-made product on the market Delivering superior customer service Achieving lower cost than rivals Having proprietary manufacturing technology Having shorter lead-times in developing and testing new products Having a well-known brand name and reputation Giving customers more value for their money INFORMATION SYSTEMS CAN HELP HERE Achieving Strategy Providing support in a way that enables the firm to gain or sustain competitive advantage over rivals Achieving Strategy Providing support in a way that enables the firm to gain or sustain competitive advantage over rivals

Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-3 Traditional vs. Strategy Support Process Example AVIS RENTA CAR Using handheld technology combined with a reengineered business process to create a competitive advantage

Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-4 Competitive Advantage examples 7-11 in Japan: - consumer focused orientation based on IT - who buys what, where at what time - extensive knowledge of market

Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-5 Competitive Advantage examples Avis Rent-A Car –What provides the advantage? Innovative technology? Or, strategic, creative use of technology? Domino’s Pizza –Where is the advantage here?

Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-6 Using Systems for Competitive advantage For an information system to have competitive advantage, it must be: *L –Valuable –Rare*** e.g., can ATM be used for competitive advantage? Many IT jobs in future will be to develop systems for competitive advantage

2-7 Electronic Commerce The process of buying or selling goods or services across a telecommunications network. Many technologies facilitate E- commerce -Electronic funds transfer -Electronic data interchange -Internet / world wide web

Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-8 Electronic Commerce - another definition- The online exchange of goods, services, and money among firms, and between firms and their customers

Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-9 Types of Electronic Commerce *MC

Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-10 e-Commerce: online selling of goods and services - business to consumer (B2C) e-Business: broader, not just selling (follow-up customer service, EDI between businesses) - terms are not (yet) clearly defined -reason for B2C: increase sales by providing more opportunity for more people to purchase goods and services from you - reason for B2B: to save money

Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-11 **Revenue Models for e-commerce How will we make money? *MC

2-12 Innovative marketing *X Use the power of the Web and Internet to leverage new ideas, and new business models e.g., Hotmail gave away free e- mail accounts that used a Web interface and was linked to a site.

Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-13 Ease of Entry Into Markets *MC The Internet opened up access to markets by lowering barriers to entry. Good ideas can be cloned. Advantage frequently goes to First Mover EBay was a “first mover”

Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-14 ESTABLISHING AN E-COMMERCE WEB SITE *L 1.Dedicated Server - business sets up own server TO SERVE E- BUSINESS WEB PAGES - connect to Internet through a dedicated line - install proper software for managing server and creating Web pages - expert staff required - offers most control

Information Systems Today, 2/C/e ©2008 Pearson Education Canada **Web Hosting Services *L - hosting company offers space on its server for the hosting of Web sites - may provide software tools for flexible page development - majority of businesses do not maintain their own Web server; they use host services;

Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-16 Showing your e-business on customer screen *MC - storefront: can have your own business on one separate web page this is a OR - cybermall hosts pages of many businesses and users browse them all - user who went into one mall store may also visit yours out of curiosity

Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-17 Outsourcing Web Operations *L Using a web hosting service provides an e-business with several advantages. A web hosting service has a staff available 24 hours a day with the technical knowledge to keep the servers and network connections running.

Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-18 Outsourcing cont’d *L An web hosting company can provide a level of redundancy that an e-business may not be able to provide for itself, including redundant hard drives on the servers, backup power from generators, and redundant connections to the internet.

Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-19 Outsourcing cont’d *L One disadvantage of outsourcing Web site operations is lack of control. One solution to this lack of control is for an e-business to provide its own servers and software and simply co-locate its servers at the Web hosting company facilities.

Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-20 Design for Your Website *MC Allow customers to order products and services online? Provide technical support for products and services? Advertise products and services? Build the e-business ’ s image and brand? Collect information about current and potential customers? Provide links to related web pages? Provide general or industry information? Recruit employees

Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-21 General E-business Security cont’d *MC Businesses must protect against the unknown. New methods of attacking networks and Web sites and new network security holes are being constantly discovered or invented. An e-business cannot expect to achieve perfect security for its network and Web site

Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-22 General E-business Security cont’d *MC Several aspects of e-business computer systems security need to be addressed: How secure is the server software? How secure are communications

Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-23 General E-business Security cont’d *MC How is the data protected once it is delivered to the e-business? How are credit card transactions authenticated and authorized? The biggest potential security problem in an e- business is of human, rather than electronic, origin. The weakest link in any security system is the people using it.

Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-24 Network and Web Site Security *X An entire glossary of words and phrases identifies network and web security risks, such as hacker, cracker, Trojan horse, and more. As part of planning a startup e-business ’ s security, management should become familiar with network and web server security risk terminology

Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-25 Denial of Service Attacks *MC A type of attack designed to disable a web site by flooding it with useless traffic or activity. Distributed denial of service attack uses multiple computers to attack in a coordinated fashion. Risk is primarily centered around downtime or lack of web site availability. Defenses exist for these attacks.

Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-26 Credit Card Fraud & Data Theft *MC E-business is at risk from credit card fraud from stolen data. Secure your own data. Verify the identity of your customers and the validity of the incoming credit card data. Identity theft by a criminal masquerading as someone else, is a too common problem.

Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-27 Front-End Systems **L Front- end systems are those processes with which a user interfaces, and over which a customer can exert some control. For an e-business, front-end systems are the Web site processes that customers use to view information and purchase products and services.

Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-28 Back-End Systems *L Back-end systems are those processes that are not directly accessed by customers. Back-end systems include the business ’ s TPS and MIS systems that handle the accounting and budgeting, manufacturing, marketing, inventory management, distribution, order-tracking, and customer support processes.

Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-29 Front & Back-End Systems

Information Systems Today, 2/C/e ©2008 Pearson Education Canada 2-30 Integrating the “ends” *L Online sales transactions are the heart of an e-business ’ s operations. The sales and payment information gathered from online sales transactions must be integrated with other back-end processes