Electronic Business Systems Yong Choi School of Business CSU, Bakersfield

Batch Processing (Periodic Mode) Batch processing: the aggregation of several business events over some period of time with the subsequent processing of these data as a group by the information system. –Gather all the sales transaction data and update over night –Getting rare –Example: pay roll

Batch Processing of Accounting Data

Online Transaction Entry (OLTE) Enter business events directly, using computer input device or PC, into the information system at the time and place the event occurs. –Merges the traditional subprocesses of business event occurrence (usually eliminating a source document) and record business event data. –Considered online because the data entry device is connected to the computer.

Online Transaction Entry (Batch)

Online Real-Time (OLRT) Gather and record business event data at time of occurrence. Update master data instantaneously. Provide results in real time. Also known as immediate mode in which little or no delay occurs between any two data processing steps.

Online Real-Time Processing

INTRODUCTION OLTP (online transaction processing) –Supports operational processing –Sales orders, accounts receivable, etc –Supported by operational databases & DBMSs OLAP (online analytical processing) –Helps build business intelligence –Supported by data warehouses and data-mining tools 3-8

OLTP, OLAP, and Business Intelligence 3-9 BI tools DMS KMS

BUSINESS INTELLIGENCE Business intelligence (BI) – collective information about customers, competitors, business partners, competitive environment, and your internal operations for making important, effective, and strategic business decisions Hot topic in business today Current market is $50 billion and double-digit annual growth 3-10

BI Objectives Help people understand –Capabilities of the organization –State of the art trends and future directions of the market –Technological, demographic, economic, political, social, and regulatory environments in which the organization competes –Actions of competitors 3-11

Viewing Business Intelligence Digital dashboard – displays key information gathered from several sources in a format tailored to the needs and wants of an individual 3-12

DATA WAREHOUSES AND DATA MINING Help you build and work with business intelligence and some forms of knowledge Data warehouse – collection of information (from many places) that supports business analysis activities and decision making 3-13

Data Warehouse Characteristics Multidimensional –Rows, columns, and layers Support decision making, not transaction processing –Contain summaries of information –Not every detail 3-14

Data-Mining Tools Data-mining tools – software tools you use to query information in a data warehouse 3-15

Data-Mining Tools Query-and-reporting tools – similar to QBE tools, SQL, and report generators Intelligent agents – utilize AI tools to help you “discover” information and trends Multidimensional analysis (MDA tools) – slice- and-dice techniques for viewing multidimensional information Statistical tools – for applying mathematical models to data warehouse information 3-16

Data Marts Data mart – subset of a data warehouse in which only a focused portion of the data warehouse information is kept 3-17

Definition of EC Electronic commerce (EC) is an emerging concept that describes the buying and selling of products, services and information via and the Internet and computer networks (EDI). E-Business?

EC vs. Traditional Commerce

History of EC 1970s: Electronic Funds Transfer (EFT) –Used by the banking industry to exchange account information over secured networks Late 1970s and early 1980s: Electronic Data Interchange (EDI) for e-commerce within companies –Used by businesses to transmit data from one business to another 1990s: the World Wide Web on the Internet provides easy-to- use technology for information publishing and dissemination –Cheaper to do business (economies of scale) –Enable diverse business activities (economies of scope)

Why business is interested in EC? Not just save cost and increase productivity –Paper check Vs. E-check Change the nature of competition –Etrade.com / Amazon.com Create new businesses –Citrix.com / Priceline.com

Ecommerce infrastructure Information superhighway infrastructure –Internet, LAN, WAN, routers, etc. –telecom, cable TV, wireless, etc. Messaging and information distribution infrastructure –HTML, XML, , HTTP, etc. Common business infrastructure –Security, authentication, electronic payment, directories, catalogs, etc.

E-COMMERCE BUSINESS MODELS 5-23

Some examples B2B: GM and suppliers (SCM) B2C: Amazon C2B: Priceline C2C: ebay G2C: Paying tax, Vehicle registration B2G: Lockheed (prodcuts/services to DoD)

25 Intranet A private version of the Internet Use TCP/IP A network that uses a Web Browser as a universal applications client and that is accessible only by individuals within a particular enterprise

Public/External Internet Users Intranet Clients Servers ERP Legacy systems servers Web servers Databases Firewalls 26 The Intranet (cont.)

27 Extranet A collection of Intranets (known as extended Intranet) Also use TCP/IP A network that links business partners to one another over the Internet by tying together their corporate intranet

28 Enterprise Consumers Suppliers Clients Business Partners Distributors VPN Internet Intranet Extranet Intranet VPN Remote Employees The Extranet (cont.)

29 E-Commerce Security Cryptography –Encryption and decryption of information Secret Key (symmetric) Cryptography Public Key (asymmetric) Cryptography Digital Signature

Cryptography Any information (such as order) in cyberspace must be delivered securely using cryptography technology. History of CryptographyCryptography Rewrite contents (encryption) so that they cannot be read without key –Encrypting function: Produces encrypted message –Decrypting function: Extracts original message Method –Secret key Cryptography –Public key Cryptography –Digital signature

31 Secret Key Cryptography Use a single key –Key: a set of random numbers to encrypt/decrypt information Known as symmetric encryption or private key encryption The same key is used by sender and receiver Easy to use, suitable when only two distinctive parties are involved Less secure (than public key cryptography), when many parties are involved

32 Secret Key Cryptography (symmetric) Scrambled Message Original Message Sender Internet Scrambled Message Key sender (= Key receiver ) Encryption Original Message Receiver Key receiver Decryption

33 Public Key Cryptography Use a pair of key (public and private) Known as asymmetric encryption The public key –Known to all authorized users The private key –Known only to key’s owner Easy to use, more secure (than secret key cryptography), suitable when many parties are involved Requires sharing of both keys

34 Sender Original Message Scrambled Message Public Key receiver Original Message Receiver Private Key receiver Internet Public Key Cryptography Mechanism Message

35 Digital Signature Public key cryptography problem –Receiver cannot ensure that a message is actually coming from sender. Your subordinate can send a fake message using your system - which looks originated from “REAL” you.

36 Digital Signature Goal –Guarantee that message must have originated with a certain entity (increase security) Idea –Encrypt digital signature with private key –Decrypt digital signature with public key Only owner of private key could have generated original signature

Sender Original Message Scrambled Message Private Key sender Original Message Receiver Public Key sender Internet Digital Signature Digital Signature