1. Electronic Commerce Systems8
Electronic Commerce Systems
© 2002 McGraw-Hill Companies

2. Identify the major categories and trends of e-commerce applications.
Chapter Objectives
Identify the major categories and trends of e-commerce applications.
Identify the essential processes of an e-commerce system, and give examples of how they are implemented in e-commerce applications.
© 2002 McGraw-Hill Companies

3. Chapter Objectives
Identify and give examples of several key factors and Web store requirements needed to succeed in e-commerce.
Identify and explain the business value of several types of e-commerce marketplaces.
Discuss the benefit trade-offs of several e-commerce clicks and bricks alternatives.
© 2002 McGraw-Hill Companies

4. Electronic Commerce Technologies
This figure illustrates an electronic commerce architecture that was developed by Sun Microsystems and its business partners. This architecture emphasizes that:
The Internet, intranets, and extranets are the network infrastructure or foundation of electronic commerce.
Customers must be provided with a range of secure information, marketing, transaction processing, and payment services.
Trading and business partners rely on the Internet and extranets to exchange information and accomplish secure transactions, including electronic data interchange (EDI) and other supply chain and financial systems and databases.
Company employees depend on a variety of Internet and intranet resources to communicate and collaborate in support of their EC work activities.
IS professionals and end users can use a variety of software tools to develop and manage the content and operations of the websites and other EC resources of a company.
Teaching Tips
This slide corresponds to Figure 8.3 on pp. 257 and relates to the material on pp. 258.
© 2002 McGraw-Hill Companies

5. Process Categories of e-Commerce
Catalog Management
Access Control
& Security
Profiling
& Personalizing
Search Management
Content Management
Workflow Management
Event Notification
Payment
Collaboration
& Trading
Access Control & Security: E-commerce processes must establish mutual trust and secure access between the parties in an e-commerce transaction by authenticating users, authorizing access, and enforcing security features.
Profiling & Personalization: Profiling processes can occur that gather data on you and your website behavior and choices, and build electronic profiles of your characteristics and preferences.These profiles are then used to recognize you as an individual user and provide you with a personalized view of the contents of the site, as well as product recommendations and personalized Web advertising as part of a one-to-one marketing strategy.
Search Management: These capabilities helps customers find the specific product or service they want to evaluate or buy.
Content Management software helps e-commerce companies develop, generate, deliver, update, and achieve text data, and multimedia information at e-commerce websites.
Catalog Management: Generating and managing catalog content is a major subset of content management and takes the form of multimedia catalogs of product information.
Workflow Management: helps employees electronically collaborate to accomplish structured work tasks within knowledge-based business processes. Workflow management in both e-business and e-commerce depends on workflow software engine containing software models of the business processes to be accomplished.
Event Notification: Event notification software works with the workflow management software to monitor all e-commerce processes and record all relevant events, including unexpected changes or problem situations. Then it works with user-profiling software to automatically notify all involved stakeholders of important transaction events using appropriate user-preferred methods of electronic messaging, such as , newsgroup, pager, and fax communications.
Collaboration and Trading: Customer-focused e-business uses tools such as e-mal, chat systems, and discussion groups to nurture online communities of interest among employees and customers to enhance customer service and build customer loyalty in e-commerce. The essential collaboration among business trading partners in e-commerce may also be provided by Internet-based trading services.
Teaching Tips
This slide corresponds to Figure 8.5 on pp. 259 and relates to the material on pp
© 2002 McGraw-Hill Companies

6. Electronic Payment and Security Systems
Merchant’s
Web Server
Client
Browser
Payment
Server
Electronic Cash
Cybergold
Qpass
E-Bill Payment
CheckFree
BillerXpert
Online buying
CyberCash
1 ClickCharge
Bank accounts
Debit Cards
Online Banking
Credit cards
VISA
MasterCard
Verify merchant
Receive order
Receive payment
Confirm order
Verify customer
Review payment
Authorize or deny payment
This slide illustrates and summarizes a B2C electronic payment system with several payment alternatives. Stress to Students:
1. Payment processes are not simple, because of the near-anonymous electronic nature of transactions taking place between the networked computer systems of buyers and sellers, and the many security issues involved.
2. Payments are complex because of the wide variety of debit and credit alternatives and financial institutions and intermediaries that may be part of the process.
3. A variety of electronic payments systems have evolved over time.
4. New payment systems are being developed and tested to meet the security and technical challenges of electronic commerce over the Internet.
Electronic Funds Transfer (EFT) systems are major form of electronic payment systems in banking and retaining industries.
Micropayment systems: Some of these technologies create electronic scrip or digital cash, sometimes called e-cash, for making payments that are too small for credit card transactions. Encryption and authentication techniques are used to generate strings of data that can be handled like currency for making cash payments.
Secure Electronic Payments: When making online purchases on the Internet, your credit card information is vulnerable to interception by network sniffers, software that easily recognizes credit card number formats. Basic security measures being used to solve security problems include:
1. Encrypt (code and scramble) the data passing between the customer and merchant.
2. Encrypt the data passing between the customer and the company authorizing the credit card transaction
3. Take sensitive information offline.
Teaching Tips
This slide corresponds to Figure 8.8 on pp. 264 and relates to the material on pp
© 2002 McGraw-Hill Companies

7. e-Commerce Success Factors
Selection & Value
Performance & Service
Look & Feel
Advertising & Incentives
Personal Attention
Community Relationships
Security & Reliability
Some Key
Factors
for Success
in E-commerce
A basic fact of Internet retailing (e-tailing) is that all retail websites are created equal as far as the “location, location, location” imperative of success in retailing is concerned. Several key factors for success include:
Selection and Value: Attractive product selections,l competitive prices, satisfaction guarantees, and customer support after the sale.
Performance and Service: Fast, easy navigation, shopping, and purchasing, and prompt shipping and delivery.
Look and Feel: Attractive Web storefront, website shopping areas, multimedia product catalog pages, and shopping features.
Advertising and Incentives: Targeted Web page advertising and promotions, discounts and special orders, including advertising at affiliate sites.
Personal Attention: Personal Web pages, personalized product recommendations, Web advertising and notices, and interactive support for all customers.
Community Relationships: Virtual communities of customers, suppliers, company representatives, and others via newsgroups, chat rooms, and links to related sites.
Security and Reliability: Security of customer information and website transactions, trustworthy product information, and reliable order fulfillment.
Teaching Tips
This slide corresponds to Figure 8.12 on pp. 270 and relates to the material on pp
© 2002 McGraw-Hill Companies

8. e-Commerce Success Marketplaces
Many to One
Many to Many
One to Many
Some to Many
Many to Some
Marketplaces
Five major types of e-commerce marketplaces used by business today include:
One to Many: Sell-side marketplaces. Host one major supplier, who dictates product catalog offerings and prices.
Examples: Cisco.com and Dell.com.
Many to One: Buy-side marketplaces. Attract many suppliers that flock to these exchanges to bid on the business of a major buyers.
Examples: GE or AT&T.
Some to Many: Distribution marketplaces. Unite major suppliers who combine their product catalog to attract a larger audience of buyers.
Examples: VerticalNet and Works.com
Many to Some: Procurement marketplaces. Unite major buyers who combine their purchasing catalogs to attract more suppliers and thus more competition and lower prices.
Examples: the auto industry’s Covisint and energy industry's Pantellos.
Many to Many: Auction marketplaces used by many buyers and sellers that can create a variety of buyers’ or sellers’ auctions to dynamically optimize prices.
Examples are eBay and FreeMarkets.
Teaching Tips
This slide corresponds to Figure 8.16 on pp. 277 and relates to the material on pp
© 2002 McGraw-Hill Companies

9. Chapter Summary
Electronic commerce encompasses the entire online process of developing, marketing, selling, delivering, servicing, and paying for products and services.
Basic categories of business and technology platforms for e-commerce marketplaces include: B2C, B2B, C2C.
Many e-business enterprises are moving toward offering full-service B2C and B2B e-commerce portals supported by integrated customer-focused processes and internetworked supply chains.
© 2002 McGraw-Hill Companies

10. Chapter Summary (cont)
B2C e-Commerce: Businesses typically sell products and services to consumers at e-commerce websites that provide attractive Web pages, multimedia catalogs, interactive order processing, secure electronic payment systems, and online customer support.
B2B e-Commerce: Business-to-business applications of e-commerce involve electronic catalog, exchange, and auction marketplaces that use Internet, intranet, and extranet websites and portals to unite buyers and sellers.
© 2002 McGraw-Hill Companies