Lesson Three General Comments on Harrah’s Discuss Ben and Jerry’s Chapters 5 and 6 Review Mid Term Time for Group Project

WHAT’S REPLACING THE DAY AFTER THANKSGIVING FOR SHOPPING SALES? Black Friday is traditionally a big day for retailers It’s when Christmas shoppers spend a lot of money, moving retailers out of the red and into the black But Black Friday may soon be replaced by Cyber Monday Cyber Monday is the Monday after Thanksgiving when people go back to work and buy products online

B2B E-Commerce Business to Business (B2B) e-commerce – when a business sells products and services to customers who are primarily other businesses Where all the e-commerce money is Basically, it’s about businesses doing business with other businesses Supply chain management (from Chapter 2) is a big part of B2B e-commerce

B2C E-Commerce Business to Consumer (B2C) e-commerce – when a business sells products and services to customers who are primarily individuals B2C is the glitzy e-commerce like iTunes, eBay, etc B2C is a primary focus of the later sections in this chapter

C2B E-Commerce Consumer to Business (C2B) e-commerce – when an individual sells products and services to a business True economic inversion of the B2C model Fotolia is a good example ( There you can post photos and videos and businesses will pay you a royalty to use them (if they like what you offer) You can also advertise businesses on your personal Web site (called an affiliate program) and receive monies for visitors who jump from your site to the business’ Web sites

C2C E-Commerce Consumer to Consumer (C2C) e-commerce – when an individual sells products and services to another individual. You selling to another person (or the reverse) Usually occurs through an intermediary such as eBay

B2G E-Commerce Business to Government (B2G) e- commerce – when a business sells products and services to a government entity. Lockheed providing products and services to DoD Fairly large e-commerce model in terms of revenue Most U.S. government entities (for sure at the federal level) won’t do business with your business if you can’t do it electronically

G2C E-Commerce Government to Consumer (G2C) e- commerce – e-commerce activities performed between a government and its citizens Does not fit well at all within the traditional supply-and-demand e-commerce notion Paying taxes, registering vehicles, etc

Examples:

B2B: Horizontal Versus Vertical B2B e-commerce takes advantage of e- marketplaces Electronic marketplace (e-marketplace) – interactive business providing a central market where multiple buyers and sellers can engage in e-commerce Horizontal e-marketplaces Vertical e-marketplaces

B2C Marketing Mix Tools SEO/SEM Online ads Viral marketing Affiliate programs Social Media

Affiliate Programs

B2C Payment Systems Credit cards Financial cybermediaries Electronic checks Electronic Bill Presentment and Payment Smart cards

Financial Cybermediaries Financial cybermediary – Internet-based company that makes it easy for one person to pay another person or organization over the Internet PayPal ( is the most well- knownwww.paypal.com

Financial Cybermediaries

Security: The Pervading Concern Security is very important when moving money Some security measures… Encryption Secure Sockets Layers Secure Electronic Transactions Many, many others

Encryption Encryption – scrambles the contents of a file so that you can’t read it without having the right decryption key Often through public key encryption (PKE) – uses two keys: a public key for everyone and private key for only the recipient of the encrypted information

Public Key Encryption

Secure Sockets Layers Secure Sockets Layer (SSL)… Creates a secure connection between a Web client and server Encrypts the information Sends the information over the Internet Denoted by lock icon on browser or (notice the “s”)

Secure Sockets Layers The “s” in https and the padlock

Secure Electronic Transactions Secure Electronic Transaction (SET) – transmission method that ensures transactions are legitimate as well as secure Helps verify use of a credit card, for example, by sending the transaction to the credit issuer as well as the seller/supplier

E-Business Trend – M-Commerce Class-show iphone

E-Business Trend – Long Tail Long Tail – first offered by Chris Anderson; explains e-commerce profitability in terms of a sales curve Brick-and-mortar businesses carry limited inventory, inventory that is popular E-businesses can carry huge amounts of “niche” inventory that may only sell a couple of times a year

E-Business Trend – Long Tail

Old Style Software Development

Phase 1: Planning Sample Project Plan

Phase 2: Analysis Two primary analysis activities: 1. Gather the business requirements Business requirements - the detailed set of knowledge worker requests that the system must meet in order to be successful Business requirements address the “why” and “what” of your development activities Joint application development (JAD) - knowledge workers and IT specialists meet, sometimes for several days, to define or review the business requirements for the system

Phase 2: Analysis 2. Prioritize the requirements Requirements definition document – prioritizes the business requirements and places them in a formal comprehensive document Again, you probably can’t do everything, so prioritizing is important Users sign off on this document which clearly sets the scope for the project

Phase 2: Analysis Take time during analysis to get the business requirements correct. If you find errors, fix them immediately. The cost to fix an error in the early stages of the SDLC is relatively small. In later stages, the cost is huge.

Phase 3: Design Design phase - build a technical blueprint of how the proposed system will work Two primary design activities: 1. Design the technical architecture Technical architecture - defines the hardware, software, and telecommunications equipment required to run the system

Phase 4: Development Development phase - take all of your detailed design documents from the design phase and transform them into an actual system Two primary development activities: 1. Build the technical architecture 2. Build the database and programs Both of these activities are mostly performed by IT specialists

Phase 5: Testing Testing phase - verifies that the system works and meets all of the business requirements defined in the analysis phase Two primary testing activities: 1. Write the test conditions Test conditions - the detailed steps the system must perform along with the expected results of each step

Component-Based Development Methodologies Rapid application development (RAD) Extreme programming (XP) Agile methodology

Rapid Application Development (RAD) Rapid application development (RAD) (also called rapid prototyping) - emphasizes extensive user involvement in the rapid and evolutionary construction of working prototypes of a system to accelerate the systems development process Prototypes are models of the software components The development team continually designs, develops, and tests the component prototypes until they are finished

Rapid Application Development (RAD) Build new software components Use already- existing software components

Extreme Programming (XP) Extreme programming (XP) - breaks a project into tiny phases and developers cannot continue on to the next phase until the first phase is complete

Agile Methodology Agile methodology - a form of XP, aims for customer satisfaction through early and continuous delivery of useful software components

PROTOTYPING Prototype – a model of a proposed product, service, or system Prototyping - the process of building a model that demonstrates the features of a proposed product, service, or system Proof-of-concept prototype - used to prove the technical feasibility of a proposed system Selling prototype - used to convince people of the worth of a proposed system

The Prototyping Process The prototyping process involves four steps: 1. Identify basic requirements 2. Develop initial prototype 3. User review 4. Revise and enhance the prototype

The Prototyping Process

Advantages of Prototyping Encourages active user participation Helps resolve discrepancies among users Gives users a feel for the final system Helps determine technical feasibility Helps sell the idea of a proposed system

Disadvantages of Prototyping Leads people to believe the final system will follow Gives no indication of performance under operational conditions Leads the project team to forgo proper testing and documentation

OUTSOURCING Outsourcing – the delegation of specified work to a third party for a specified length of time, at a specified cost, and at a specified level of service The third “who” option of systems development, after insourcing and selfsourcing

OUTSOURCING The main reasons behind the rapid growth of the outsourcing industry include the following: Globalization The Internet Growing economy and low unemployment rate Technology Deregulation

Outsourcing – RFP Request for proposal (RFP) – formal document that describes in excruciating detail your logical requirements for a proposed system and invites outsourcing organizations (vendors) to submit bids for its development In outsourcing, you must tell another organization what you want developed; you do that with an RFP Therefore, the RFP must be very detailed and complete Some RFPs can take months or even years to develop

Outsourcing – SLA Service level agreement (SLA) - formal contractually obligated agreement between two parties In outsourcing, it is the legal agreement between you and the vendor and specifically identifies what the vendor is going to do (and by when) and how much you’re going to pay Supporting SLA documents – service level specifications and service level objectives – contain very detailed numbers and metrics

Offshore Outsourcing Primary outsourcing countries are: India China Eastern Europe (including Russia) Ireland Israel Philippines

The Advantages and Disadvantages of Outsourcing Advantages: Focus on unique core competencies Exploit the intellect of another organization Better predict future costs Acquire leading-edge technology Reduce costs Improve performance accountability

The Advantages and Disadvantages of Outsourcing Disadvantages: Reduces technical know-how for future innovation Reduces degree of control Increases vulnerability of your strategic information Increases dependency on other organizations