Slide 1Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
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Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
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Electronic Commerce: buying and selling of products, services and information via computer networks, primarily the Internet
Electronic Business: a broader definition that includes
buying and selling, plus
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Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of email and fax messages through a single communication system.
Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
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Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of email and fax messages through a single communication system.
Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
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History
Began in the early 1970s (long before the Internet was open to commercial use)
Limited to large businesses initially
Electronic Fund Transfer (EFT) and Electronic Data Interchange (EDI)
Scope Today Includes
buying stocks
providing customer service
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Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of email and fax messages through a single communication system.
Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
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Procure material and services from other companies at less cost
Shorten marketing distribution channels and reduce marketing costs
Lower telecommunications costs because the Internet is much cheaper then other.
Reduced cycle time:
Procure material and services from other companies rapidly
Reduce the time between the outlay of capital and the receipt of products and services
Helps small businesses compete against large companies
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Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of email and fax messages through a single communication system.
Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
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Choice
Consumers can select from many vendors and many more products than they could locate otherwise
Consumers can get customized products, from PCs to cars, at competitive or bargain prices
Consumers can find unique products and collectors’ items through virtual auctions that might otherwise require them to travel long distances to a particular auction place at a specific time
Convenience
Consumers can conduct online quick comparisons to find less expensive products and services
Customers can shop or make other transactions 24 hours a day, year round, from almost any location
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Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of email and fax messages through a single communication system.
Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
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Convenience
Enables more individuals to work at home and to do less traveling
Access
Allows some merchandise to be sold at lower prices - less affluent people can buy more and increase their standard of living
Enables people in less developed countries and rural areas to enjoy products and services that otherwise are not available to them
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Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of email and fax messages through a single communication system.
Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
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Technical Limitations of EC
A few technical challenges remain for organizations wishing to conduct EC:
Lack of universally accepted standards for quality, security, and reliability
Insufficient telecommunications bandwidth
Still-evolving software development tools
Difficulties in integrating the Internet and EC software with some existing applications and databases
Need for special Web servers in addition to the network servers (added cost)
Expensive and/or inconvenient Internet accessibility for many people
All of these will diminish over time
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Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of email and fax messages through a single communication system.
Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
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Lack of national and international regulations and standards
Difficulty in measuring benefits of EC and justifying EC
Insufficient number (critical mass) of sellers and buyers exists for profitable EC operations
Cultural resistance:
Distrust of the new: Many sellers and buyers are waiting for EC to stabilize before they take part
Customer resistance to the change from a physical to virtual stores
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Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of email and fax messages through a single communication system.
Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
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Electronic Storefronts and Malls
Electronic retailing can be conducted via solo storefront or as a part of cybermall
Issues of e-tailing
Incorrect business model (advertising revenue versus profitable sales)
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Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of email and fax messages through a single communication system.
Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
9-*
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Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of email and fax messages through a single communication system.
Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
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B2C EC enables personalization at low cost
Internet enables marketing research
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Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of email and fax messages through a single communication system.
Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
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Online advertising
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Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of email and fax messages through a single communication system.
Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
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Permission marketing – offer incentives to consumers to receive advertising
Viral (advocacy) marketing – online word of mouth advertising (send this ad to a friend and get…)
Customizing ads – base ads on consumers’ profile
Interactive marketing – tailor ads based on stored customer data
Attracting visitors to a site
Making the top list of a search engine
Online events, promotions, and attractions
Electronic catalogs / customized catalogs
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Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of email and fax messages through a single communication system.
Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
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Covers all activities along the supply chain
Business Models:
Sell-Side Marketplace
Buy-Side Marketplace
Electronic Exchanges
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Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of email and fax messages through a single communication system.
Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
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Planning and scheduling
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Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of email and fax messages through a single communication system.
Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
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Electronic Commerce Innovations
E-Government – deliver information and public services to citizens and members of the public sector
M-Commerce – use of wireless devices to deliver mobile e-commerce
Consumer-to-consumer EC – direct interaction facilitated by auctions, classifieds, and bartering
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Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of email and fax messages through a single communication system.
Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
9-*
Electronic Payment Mechanisms
Customer opens account with a bank
the customer e-mails an encrypted electronic check signed with a digital signature
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Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of email and fax messages through a single communication system.
Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
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Electronic credit cards
Unencrypted payments - the buyer e-mails her or his credit card number to the seller on the Internet
Encrypted payments - credit card details encrypted for security
Electronic cash in PC
customer buys “electronic money” from the bank through software
the bank sends electronic money note to this customer, endorsing it with a digital signature
the money is stored on the buyer’s PC and can be spent in any electronic store that accepts e-cash
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Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of email and fax messages through a single communication system.
Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
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Electronic payment cards with e-cash
Credit cards using magnetic strips
Card holds information about prepaid cash which can be used to make payments
Smart cards
Person-to-person payment systems
EFT
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Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of email and fax messages through a single communication system.
Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
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Security
Authentication - assurance regarding the identity of the parties who are involved in the deal
Integrity - assurance that data and information (orders, reply to queries, and payment authorization) are not accidentally or maliciously altered or destroyed during transmission
Non-repudiation - Protection against the customer’s unjustifiable denial of placing an order; buyer needs protection against the vendor denial of shipment, or sending wrong order
Privacy - many customers want their identity to be undisclosed
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Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of email and fax messages through a single communication system.
Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
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Security (continued)
Encryption - a process of making messages indecipherable except by those who have an authorized decryption key
Single-key encryption
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Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of email and fax messages through a single communication system.
Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
9-*
Ship product to customer
Provide on-going support (e.g., animated assembly instructions)
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Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of email and fax messages through a single communication system.
Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
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Buyer Protection
look for reliable brand names at sites like Wal-Mart Online, Disney Online, and Amazon.com
search any unfamiliar selling site for company’s address and phone and fax number
check out the seller with the local Chamber of Commerce and/or Better Business Bureau
investigate how secure the seller’s site is by reading the posted privacy notice, and evaluate how well the site is organized
examine the money-back guarantees, warranties, and service agreements
compare prices to those in regular stores (suspect the too cheap sites)
ask friends what they know about the vendor
find out what your rights are in case of a dispute
consult the National Fraud Information Center
check www.consumerworld.org for a listing of useful resources
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Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of email and fax messages through a single communication system.
Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
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Seller Protection
Need protection against consumers who refuse to pay or pay with bad checks and buyers’ claims that the merchandise did not arrive
Need protection against the use of their name by others as well as use of their unique words and phrases, slogans and Web address
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Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of email and fax messages through a single communication system.
Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
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Ethics
Privacy
most electronic payment systems know who the buyers are; therefore, it may be necessary to protect the buyers’ identity
Web Tracking
by using sophisticated software it is possible to track individual movements on the internet
Disintermediation
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Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to
Integrated messaging – delivery of email and fax messages through a single communication system.
Introduction to Information Technology, 2nd Edition Turban, Rainer & Potter © 2003 John Wiley & Sons, Inc.
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Legal Concerns
Domain Names
several companies that have similar or same names (in different countries) compete over a domain name that is not a registered trademark
Taxes and Other Fees
Federal, state, and local taxing authorities are trying to figure out how to impose taxes on Internet sales
Copyright
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Global systems – systems connecting two or more companies in two or more countries
Electronic data interchange (EDI) – electronic movement of business documents between business partners
Electronic funds transfer (EFT) – transfer of money using telecommunications
Extranets – extended Intranets that link business partners
Shared databases – databases that business partners both have access to