1. E-Commerce, Web 2.0, and Social Networking
Chapter 8
E-Commerce, Web 2.0, and Social Networking

2. This Could Happen to You: “She Said What on Our Facebook Page?”
Customer comment on Fox Lake’s Facebook page
“I would totally recommend Fox Lake Country Club for your wedding reception if you want to be told to disinvite your close friends and family. . . they were TOTAL liars who planned ballroom renovations DURING my wedding reception. . .They are just greedy business people who want to get your money. . .Whatever you do, don’t ever work with Fox Lake Country Club!!!!!”
Scenario Video
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3. Study Questions Q1: What types of inter-organizational systems exist?
Q2: How do companies use e-commerce?
Q3: Why is Web 2.0 important to business?
Q4: How does social capital benefit you and organizations?
Q5: How does social CRM empower customers?
How does the knowledge in this chapter help Fox Lake and you?
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4. Q1: What Types of Interorganizational Systems Exist?
Pre-Internet Systems
E-Commerce
Web Storefronts
Postal mail, telephone, fax
Inter-organizational Systems
Enterprise 2.0
Web 2.0
Google, eBay, Amazon, CNet
Social CRM, SOA
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5. Interorganizational Systems
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6. Q2: How Do Companies Use E-Commerce?
Merchant companies—take title to goods they sell
Nonmerchant companies—arrange for purchase and sale of goods without owning or taking title to those goods
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7. Example of Use of B2B, B2G, and B2C
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8. Nonmerchant E-Commerce Companies
E-commerce application enables auction company to offer goods for sale and to support a competitive-bidding process
Online auctions
Provide goods and services at stated price, arrange delivery, but do not take title
Amazon.com sells books and other merchandise for other businesses
Clearinghouses
Match buyers and sellers
Priceline.com
Electronic exchanges
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9. Q2: How Does E-Commerce Improve Market Efficiency?
Disintermediation
Companies learn how customers internalize competitors’ pricing, advertising, and messaging X
Retail Store
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10. What Economic Factors Disfavor E-Commerce?
Channel conflict
Price conflict with traditional channels
Logistics expenses increase for manufacturer
Customer-service expenses increase for manufacturer
Economic Factors in Disintermediation
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11. Q3: Why is Web 2.0 Important to Business?
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12. Software as a (Free) Service (SaaS)
Figure 8-6
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13. Software as a (Free) Service
SaaS—thin-client applications run in Internet cloud
License-free software
Does not require an installation on the users’ computers
Web servers download Web 2.0 programs as code within HTML, as Flash, or as Silverlight code.
Readily (and frequently) updated. New features added with little notice or fanfare.
Google Docs & Spreadsheets
Google Groups
Google Earth
Google Maps
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14. User-Generated Content
Crowdsourcing examples
Combines social networking, viral marketing, and open-source design, saving considerable cost while cultivating customers.
Crowd performs classic in-house market research and development. Sets up customers to buy.
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15. Organic User Interfaces and Mashups
Mashup —a web application that combines data from other websites
Example—map data from Google Maps to add location information to real-estate data, thus creating a new and distinct web service
See
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16. How Can Businesses Benefit from Web 2.0?
AdWords
Vendors pay for specific words, phrases
Placement on search results list depends on how much you pay for search word
Vendor pays when someone clicks on their link
Amount can vary day to day, hour to hour
Ad Sense
Google inserts ads that match web page content
Google pays web page owner for every click
Website owners enroll in this program to enable text, image, and video advertisements on their websites
Advertising
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17. Web 2.0 Not for All Applications
Information systems that deal with assets, whether financial or material, requires control, rather than flexibility and organic growth.
Don’t get carried away
Credit card transaction processing
Accounts payable or general ledger system interface
Examples
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18. Q4: How Does Social Capital Benefit You and Organizations?
Social Capital—investment in social relations with expectation of returns in the marketplace
Adds value in four ways:
Information about opportunities, alternatives, problems and other factors
Influence decision makers in your organization or others
Social credentials from linking to network of highly regarded contacts
Personal re-enforcement of professional image and position
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19. Social Capital Professional social networking factors
Value of social capital: Number of relationships in a social network, by strength of those relationships, and by resources controlled by those related.
Professional social networking factors
Gain social capital by adding more friends and strengthening relationships with existing friends.
Gain more social capital by adding friends and strengthening relationships with people who control resources important to you.
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20. Importance of Weak Relationships
People you know the least contribute the most to your network.
Eileen is weak tie
Expand network by meeting Eileen
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21. How Do Social Networks Add Value to Business?
Progressive organizations maintain a presence on Facebook, LinkedIn,
Twitter, and other sites
Sales people, customer support, public relations, and endorsements by high profile people
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22. Fan Connections and Endorsements
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23. Experiencing MIS InClass Exercise 8: Computing Your Social Capital
1. Define capital, human capital, and social capital. Explain how these terms differ.
2. How does the expression “It’s not what you know, but who you know that matters” pertain to the terms you defined in item 1.
3. Do you, personally, agree with the statement in item 2? Form your own opinion before discussing it with your fellow group members.
4. As a group, discuss the relative value of human and social capital. In what ways is social capital more valuable than human capital? Formulate a group consensus view on the validity of the statement in item 2.
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24. Experiencing MIS InClass Exercise 8: Computing Your Social Capital (cont’d)
5. Visit the Facebook, LinkedIn, Twitter, or other social networking presence, site of each group member.
Using definition of social capital value in this chapter, assess value of each group member’s social networking presence.
Recommend at least one way to add value to each group member’s social capital at each site.
6. Suppose you each decide to feature your Facebook, or other social networking, page on your professional résumé.
How would you change your presence you evaluated in item 5 in order to make it more appropriate?
Describe three or four types of professionals you could add to your social network that would facilitate your job search.
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25. Experiencing MIS InClass Exercise 8: Computing Your Social Capital (cont’d)
7. Imagine that you are the CEO of a company that has just one product to sell: You!
a. Review Enterprise 2.0 SLATES principles in Figure 8-10 and assess how each could pertain to the selling of your “product” (i.e., obtaining a quality job that you want). You can find the McAfee article at:
b. Explain how you could use your social networking presence to facilitate social CRM selling of your product.
c. Devise a creative and interesting way to use this exercise as part of your social CRM offering.
8. Present your answers to items 4 and 7 to the rest of the class.
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26. Q5: How Does Social CRM Empower Customers?
Classical CRM organization speak to customers with one voice and controlled messages, offer support for customers, depending on value of customer.
Today, customers craft own relationship with a business by their use of touch points.
Social CRM—creation and use of Enterprise 2.0 collaborative relationship between businesses and customers.
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27. What Are the Characteristics of Web 2.0: SLATES
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28. Social CRM is Enterprise 2.0 CRM
Social CRM done in style of Enterprise 2.0.
Relationships between organizations and customers emerge as both parties create and process content.
Employees create wikis, blogs, discussion lists, frequently-asked-questions, sites for user reviews and commentary, and other dynamic content.
Customers search content, contribute reviews and commentary, ask more questions, create user groups, etc. Each customer crafts own relationship with company.
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29. Classical CRM vs. Social CRM
Centered on customer lifetime value
Control what customer reads, sees, hears about company and its products
Social CRM
Effective reviewer, commentator, or blogger can have significant influence
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30. How Does the Knowledge in This Chapter Help Fox Lake and You?
Anne: Craft new marketing capabilities using Web 2.0, social networking, Enterprise 2.0, and Social CRM
Jeff: Encourage other employees to consider new marketing efforts
You
Craft short summary of what you’ve learned about Web 2.0, Enterprise 2.0, and social CRM to use it in a job interview
Use new insights into social networking in business to help you find a job
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31. Study Questions Q1: What types of inter-organizational systems exist?
Q2: How do companies use e-commerce?
Q3: Why is Web 2.0 important to business?
Q4: How does social capital benefit you and organizations?
Q5: How Does social CRM empower customers?
How does the knowledge in this chapter help Fox Lake and you?
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

32. Ethics Guide: Hiding the Truth?
Scenario A
A 15 year old posts a fake picture of himself and other false information on river rafting company’s website. Someone believes him to be “cool” and decides to go on a rafting trip with him and is disappointed when they learn the truth.
Q: Would the rafting company have any responsibility to refund person’s fees?
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33. Ethics Guide: Hiding the Truth? (cont’d)
Scenario B
Assume you own and manage the rafting company.
Q: Is it unethical for you to encourage your employees to write positive reviews about your company?
Q: Does your assessment change if you ask your employees to use an address other than the one they have at work?
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34. Ethics Guide: Hiding the Truth? (cont’d)
Scenario C
Suppose you pay your employees a bonus for every client they bring to a rafting trip. You encourage them to be creative in obtaining clients. One employee invites his MySpace friends to a party to show rafting trip photos. A guest dies in auto accident on way to party. His spouse sues your company.
Q: Should company be held accountable?
Q: What if MRV managers knew about the presentation parties?
Q: Does it matter if you knew about the presentation? Would it matter if you had not encouraged employees to be creative?
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35. Ethics Guide: Hiding the Truth? (Cont’d)
Scenario D
Suppose your rafting company has a website for customer reviews. In spite of your best efforts at camp cleanliness, on one trip (out of dozens) your staff accidentally serves contaminated food and everyone becomes ill with food-poisoning. One of those clients writes a poor review because of that experience.
Q: Is it ethical for you to delete that review from your site?
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36. Ethics Guide: Hiding the Truth? (cont’d)
Scenario E
Assume you have a professor who has written a popular textbook. You are upset with the grade you received in his class, so you write a scandalously poor review of that professor’s book on Amazon.com.
Q: Are your actions ethical?
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37. Ethics Guide: Hiding the Truth? (Cont’d)
Scenario F
Instead of owner, suppose you were at one time employed by this rafting company and you were, undeservedly you think, terminated by the company. To get even, you use Facebook to spread rumors to your friends (many of whom are river guides) about the safety of the company’s trips.
Q: Are your actions unethical?
Q: Are they illegal?
Q: Do you see any ethical distinctions between this situation and that in Scenario D?
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38. Ethics Guide: Hiding the Truth? (cont’d)
Scenario G
Suppose you were once employed by rafting company and undeservedly terminated. You notice company’s owner has no Facebook account, so you create one. You’ve known her for many years and have dozens of photos, some were taken at parties and are unflattering and revealing. You post those photos along with critical comments she made about clients and employees when she was tired or frustrated. Comments are hurtful and humorous. You send “friend invitations” to people she knows, many were targets of her remarks.
Q: Are your actions unethical?
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39. Guide: Blending the Personal and the Professional
Employees sharing personal information at socially
Technology leads to blurring lines between work life and home life
Work is portable and always on
You need to be more careful about what you say
Work networks are not social networks
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40. Case Study 8: Tourism Holdings Limited
Publicly listed New Zealand corporation that owns multiple brands and businesses in tourism industry.
$5 million (2009) in EBIT on $170 million in revenue
Operates in New Zealand, Australia, and Fiji, and has sales offices in Germany and United Kingdom
Current list of businesses, visit
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41. Case Study 8: Tourism Holdings Limited (cont’d)
CEO considers information systems and technology a core component of its business value and invested in a variety of innovative information systems and Web 2.0 technologies
CEO speaks knowledgeably about information technologies, including SharePoint, Microsoft Office SharePoint Services (MOSS), Microsoft Report Server, OLAP, and data mining
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42. Case Study 8: Tourism Holdings Limited (cont’d)
Acquisition of multiple brands and companies created a disparate set of information systems using a variety of different technologies
Result:
Excessive software maintenance and costs
Single development platform reduces maintenance expenses and focuses management attention, development, and personnel training on single set of technologies
Converted customer-facing websites to use Microsoft SharePoint and MOSS to reduce costs and simplify IS management
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43. Case Study 8: Tourism Holdings Limited (cont’d)
Sells directly to consumer
Actively uses Google AdWords and Google Analytics to understand how their sites are processed
Experimenting with online chat, both voice and video
Click on “Plan Your NZ Trip”
This case implies frequent acquisition and disposition of tourism brands poses problems for information systems
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44. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
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Copyright © 2012 Pearson Education, Inc.  
Publishing as Prentice Hall