2. Fundamentals of Information Systems, Third Edition2 Principles and Learning Objectives E-commerce is a new way of conducting business, and as with any other new application of technology, it presents both opportunities for improvement and potential problems. –Identify several advantages of e-commerce. –Identify some of the major challenges that companies must overcome to succeed in e-commerce and m- commerce. –Describe some of the current uses and potential benefits of m-commerce. –Identify several e-commerce applications.

3. Fundamentals of Information Systems, Third Edition3 Principles and Learning Objectives (continued) An organization’s transaction processing system (TPS) must support the routine, day-to-day activities that occur in the normal course of business and help a company add value to its products and services. –Identify the basic activities and business objectives common to all TPSs.

4. Fundamentals of Information Systems, Third Edition4 Principles and Learning Objectives (continued) Implementation of an enterprise resource planning (ERP) system enables a company to achieve many benefits by creating a highly integrated set of systems. –Discuss the advantages and disadvantages associated with the implementation of an ERP system.

5. Fundamentals of Information Systems, Third Edition5 An Introduction to Electronic Commerce E-commerce is a general concept that covers any business transaction executed electronically between consumers (consumer to consumer), companies (business-to-business), or companies and consumers (business-to-consumer). It involves conducting primary business activities using electronic data transmission, telecommunications networks, and streamlined work processes.

6. Fundamentals of Information Systems, Third Edition6 E-commerce Businesses and individuals use e-commerce to reduce transaction costs, speed the flow of goods and information, improve the level of customer service, and enable close coordination among manufacturers, suppliers, and customers. E-commerce also enables consumers and companies to gain access to worldwide markets.

7. Fundamentals of Information Systems, Third Edition7 An Introduction to Electronic Commerce Business-to-consumer (B2C) e-commerce: customers deal directly with the organization, avoiding any intermediaries. Ex: Amazon. COM Business-to-business (B2B) e-commerce: participants are organizations Consumer-to-consumer (C2C) e-commerce: participants are individuals, with one serving as the buyer and the other, the seller ex: eBay. Customers buy and sell items directly to each other through the site.

8. Fundamentals of Information Systems, Third Edition8 The E-Commerce Supply Chain Supply chain management is a key value chain Most companies may gain tremendous business opportunities by converting supply chain management to e-commerce composed of: –Demand planning –Supply planning –Demand fulfillment

9. Fundamentals of Information Systems, Third Edition9 Supply chain management demand planning (anticipating market demand) supply planning (allocating the right amount of enterprise resources to meet demand) demand fulfillment (fulfilling demand quickly and efficiently).

10. Fundamentals of Information Systems, Third Edition10 The E-Commerce Supply Chain (continued) Figure 5.1: Supply Chain Management

11. Fundamentals of Information Systems, Third Edition11 The E-Commerce Supply Chain (continued) E-commerce supply chain management allows businesses an opportunity to achieve: –Increased revenues and decreased costs –Improved customer satisfaction –Inventory reduction across the supply chain

12. Fundamentals of Information Systems, Third Edition12 Business-to-business (B2B) e-commerce is a form of e-commerce in which the participants are organizations. This form of e-commerce allows manufacturers to buy at a low cost worldwide, and it offers enterprises the chance to sell to a global market right from the start. It also provides great opportunities for developing countries, helping them to enter the prosperous global marketplace.

13. Fundamentals of Information Systems, Third Edition13 Business-to-Consumer (B2C) E-Commerce Business-to-consumer (B2C) e-commerce is a form of e-commerce in which customers deal directly with the organization, avoiding any intermediaries. E- commerce is gaining more and more acceptance among shoppers. Many shoppers find that online shopping saves them time and is more convenient. Also, many goods and services can be cheaper when purchased via the Web, such as stocks, books, newspapers, airline tickets, and hotel rooms. Shoppers can also research products and services more easily on the Internet, allowing them to make better deals.

14. Fundamentals of Information Systems, Third Edition14 Consumer-to-Consumer (C2C) E-Commerce Consumer-to-consumer (C2C) e-commerce involves consumers selling directly to other consumers. Often this exchange is done through Web auction sites, such as eBay.

15. Fundamentals of Information Systems, Third Edition15 Mobile Commerce Mobile commerce (m-commerce) relies on the use of wireless devices, such as personal digital assistants, cell phones, and smart phones, to place orders and conduct business Issues confronting m-commerce –User-friendliness of the wireless device –Network speed –Security

16. Fundamentals of Information Systems, Third Edition16 Mobile Commerce (continued) Handheld devices used for m-commerce have limitations that complicate their use Wireless application protocol (WAP): a standard set of specifications for Internet applications that run on handheld, wireless devices

17. Fundamentals of Information Systems, Third Edition17 E-Commerce Applications Business-to-business (B2B), business-to-consumer (B2C), and consumer-to-consumer (C2C) e- commerce use is spreading rapidly, especially in the areas of retail and wholesale, manufacturing, marketing, investment and finance, and auction industries

18. Fundamentals of Information Systems, Third Edition18 E-Commerce Applications: Retail and Wholesale Electronic retailing (e-tailing): the direct sale from business to consumer through electronic storefronts, typically designed around an electronic catalog and shopping cart model Cybermall: a single Web site that offers many products and services at one Internet location Manufacturing, repair, and operations (MRO) goods and services

19. Fundamentals of Information Systems, Third Edition19 Manufacturing To raise profitability and improve customer service, many manufacturers move their supply chain operations onto the Internet Electronic exchange: an electronic forum where manufacturers, suppliers, and competitors buy and sell goods, trade market information, and run back- office operations. This approach has greatly speeded the movement of raw materials and finished products among all members of the business community, thus reducing the amount of inventory that must be maintained. It has also led to a much more competitive marketplace.

20. Fundamentals of Information Systems, Third Edition20 Manufacturing (continued) Figure 5.3: Model of an Electronic Exchange

21. Fundamentals of Information Systems, Third Edition21 Marketing In the area of marketing, e-commerce has enabled firms to gather much more information about customer behavior and preferences. Internet advertisers use Market segmentation: the identification of specific markets to target them with advertising messages Technology-enabled relationship management: use of detailed information about a customer’s behavior, preferences, needs, and buying patterns to set prices, negotiate terms, tailor promotions, add product features, and otherwise customize the entire relationship with that customer

22. Fundamentals of Information Systems, Third Edition22 Investment and Finance Online stock trading –Portfolio tracker: a tool that allows you to enter information about the securities you own-ticker symbol, number of shares, price paid, and date purchased – at a tracker web site. You can then access the tracker site to see how your stocks are doing. Online banking - allows customers to check balances of their accounts; transfer money among accounts, and pay their bills. - Electronic bill presentment: A method of billing whereby the biller posts an image of your statement on the Internet and alerts you by e-mail that your bill has arrived.

23. Fundamentals of Information Systems, Third Edition23 Auctions The Internet has created many new options for C2C e-commerce, including electronic auctions, in which geographically dispersed buyers and sellers can come together. A special type of auction called bidding allows a prospective buyer to place only one bid for an item or a service. Priceline.com uses a bidding system that enables consumers to save money by naming their own price for goods and services. eBay is an example of a Web auction site; it enables customers to buy and sell items directly to each other.