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Electronic Commerce and Transaction Processing Systems. Chapter 5. Learning Objectives. Identify several advantages of e-commerce. Identify some of the major challenges companies must overcome to succeed in e-commerce. Identify several e-commerce applications. Learning Objectives.

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Electronic Commerce and Transaction Processing Systems

Chapter 5

Fundamentals of Information Systems, Second Edition


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Learning Objectives

  • Identify several advantages of e-commerce.

  • Identify some of the major challenges companies must overcome to succeed in e-commerce.

  • Identify several e-commerce applications.

Fundamentals of Information Systems, Second Edition


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Learning Objectives

  • Outline the key components of technology infrastructure that must be in place for e-commerce to succeed.

  • Discuss the key features of the electronic payments systems needed to support e-commerce.

  • Identify the major issues that represent significant threats to the continued growth of e-commerce.

Fundamentals of Information Systems, Second Edition


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Learning Objectives

  • Identify the basic activities and business objectives common to all transaction processing systems.

  • Discuss the importance of business resumption planning and disaster recovery for key transaction processing systems.

Fundamentals of Information Systems, Second Edition


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Learning Objectives

  • Define the term enterprise resource planning system and discuss the advantages and disadvantages associated with the implementation of such a system.

Fundamentals of Information Systems, Second Edition


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Introduction to Electronic Commerce

Fundamentals of Information Systems, Second Edition


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E-Commerce

  • Business-to-consumer

    • Example: Bookstore selling books to customers (amazon.com)

    • Annual online spending in 2002 was $85 billion

  • Business-to-business

    • Example: A data processing company handling data services for a company (adp.com)

    • $5.3 trillion impact by 2005

  • Consumer-to-consumer

    • Example: A customer selling goods to another customer (e-bay.com)

Fundamentals of Information Systems, Second Edition


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Why Use E-Commerce?

  • Cut transaction costs

  • Speed flow of goods and information

  • Improve customer service

  • Coordinate manufacturers, suppliers, and customers

Fundamentals of Information Systems, Second Edition


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Supply Chain Management

Fundamentals of Information Systems, Second Edition


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Value Chains in E-Commerce

  • Conversion to e-commerce supply chain management provides businesses with an opportunity to:

    • increase revenues or decrease costs by eliminating time-consuming and labor-intensive steps throughout the order and delivery process

    • improve customer satisfaction by enabling customers to view detailed information about delivery dates and order status

    • reduce inventory including raw materials, safety stocks, and finished goods

Fundamentals of Information Systems, Second Edition


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Product and Information Flow for HP Printers Ordered Over the Web

Fundamentals of Information Systems, Second Edition


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E-Commerce Applications the Web

Fundamentals of Information Systems, Second Edition


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E-Commerce Applications the Web

  • Retail and Wholesale: www.estore.com.tr/

  • Manufacturing: www.covisint.com/

  • Marketing: www.doubleclick.com

  • Investment and Finance: www.garanti.com.tr/

  • Auctions: www.gittigidiyor.com

  • Price comparison: www.google.com/froogle

Fundamentals of Information Systems, Second Edition


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Retail and Wholesale the Web

  • Electronic retailing - the direct sale from business to consumer through electronic storefronts

  • Cybermall - a single Web site that offers many products and services at one Internet location

Fundamentals of Information Systems, Second Edition


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Model of an Electronic Exchange the Web

Fundamentals of Information Systems, Second Edition


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Web Sites Useful to Investors the Web

Fundamentals of Information Systems, Second Edition


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Popular Stock Tracker Web Sites the Web

Fundamentals of Information Systems, Second Edition


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Technology, Infrastructure, and Development the Web

Fundamentals of Information Systems, Second Edition


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Key E-Commerce Technical Components the Web

Fundamentals of Information Systems, Second Edition


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Hardware the Web

  • The amount of storage capacity and computing power required of the Web server depends primarily on two things:

    • the software that must run on the server

    • the volume of e-commerce transactions that must be processed

Fundamentals of Information Systems, Second Edition


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Software (1) the Web

  • Web server software

    • Apache Server

    • Microsoft Internet Information Server

  • Web site development tools

    • FrontPage, NetStudio

  • Web page construction software

    • Static Web page: Always the same information (ISE 100 Web page)

    • Dynamic Web page: Content created based on demand (Google search results)

Fundamentals of Information Systems, Second Edition


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Software (2) the Web

  • Database management system

    • SQL Server

    • Oracle

  • E-commerce software

    • Catalog software

    • Product configuration software

    • Electronic shopping cart

Fundamentals of Information Systems, Second Edition


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Catalog Management Software the Web

  • Combines product data formats into a standard format

  • Creates a central repository of product data

  • Catalog resides on a database

  • Amazon’s book, music catalog

Fundamentals of Information Systems, Second Edition


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Product Configuration Software the Web

  • Allow buyers to build the products they want to buy

  • www.dell.com lets you choose parts of the computer separately

  • Better customization, better sales

Fundamentals of Information Systems, Second Edition


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Electronic Shopping Cart the Web

  • Track items selected for purchase

  • Let buyers modify their choices (add or delete items)

  • Let buyers “checkout” (begins a purchase transaction)

  • Wish list

Fundamentals of Information Systems, Second Edition


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Electronic Shopping Cart the Web

Fundamentals of Information Systems, Second Edition


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Electronic Payment Systems the Web

  • Electronic cash

    • Money that is “computerized”

    • Used as cash in e-commerce transactions

  • Electronic wallets

    • Holds credit card, e-cash, address information

    • Automatically handles checkout

  • Credit, charge, debit, and smart cards

Fundamentals of Information Systems, Second Edition


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An Overview of Transaction Processing Systems the Web

Fundamentals of Information Systems, Second Edition


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TPS, MIS/DSS, and Special-Purpose Information Systems the Web

Fundamentals of Information Systems, Second Edition


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Traditional Transaction Processing Methods the Web

  • Batch processing – method of computerized processing in which business transactions are accumulated over a period of time and prepared for processing as a single unit

  • On-line transaction processing (OLTP) - method of computerized processing in which each transaction is processed immediately and the affected records are updated

Fundamentals of Information Systems, Second Edition


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Batch versus On-Line Processing the Web

Fundamentals of Information Systems, Second Edition


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Integration of a Firm’s TPSs the Web

Fundamentals of Information Systems, Second Edition


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Transaction Processing Activities the Web

  • Data collection: Capturing data necessary for the transaction

  • Data editing: Check validity and completeness

    • Ex: 400 hours/week instead of 40 hours/week

  • Data correction: Correct the wrong data

  • Data manipulation: Calculate, summarize

  • Data storage: Update transactions

  • Document production and reports: Create end results (paychecks)

Fundamentals of Information Systems, Second Edition


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Data Processing Activities Common in Transaction Processing Systems

Fundamentals of Information Systems, Second Edition


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Point-of-Sale Transaction System Systems

Fundamentals of Information Systems, Second Edition


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Systems that Support Order Processing Systems

Fundamentals of Information Systems, Second Edition


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Order Processing Systems Systems

Fundamentals of Information Systems, Second Edition


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Business Resumption Planning Systems

The process of anticipating and minimizing the effects of disasters.

  • Focuses primarily on two issues:

    • maintaining the integrity of corporate information

    • keeping key information systems running until normal operations can be resumed

  • Disaster recovery – implementation of the business resumption plan

Fundamentals of Information Systems, Second Edition


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Enterprise Resource Planning Systems

Fundamentals of Information Systems, Second Edition


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Some ERP Software Vendors Systems

Fundamentals of Information Systems, Second Edition


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Commonalities Among ERP Systems Systems

  • Integrate data: Enter data once; access everywhere

  • Operate in Client/Server Environment

  • Based on Objects:

    • Uses object-oriented approach

    • Easy to extend

  • Employ Tables:

    • System configuration table: Defines how the system is set up

    • Control table: Defines functions that help the user

      • Does not allow a non-existing product to be purchased

    • Application data table: Content-related data

Fundamentals of Information Systems, Second Edition


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Advantages of ERP Systems

  • Elimination of costly, inflexible legacy systems

    • Single integrated system

  • Improvement of work processes

    • Support best practices: Most efficient and effective way of carrying out a business process

  • Increase in access to data for operational decision making

    • A sale is reflected in inventory control

  • Upgrade of technology infrastructure

    • Uniform platform

Fundamentals of Information Systems, Second Edition


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Disadvantages of ERP Systems

  • Expense and time in implementation

  • Difficulty integrating with other systems

  • Risks in using one vendor

Fundamentals of Information Systems, Second Edition


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Summary Systems

  • E-commerce – includes business-to-business (B2B), business-to-consumer (B2C), consumer-to-consumer (C2C).

  • Transaction Processing Systems (TPSs) - consist of all the components of a CBIS, including databases, telecommunications, people, procedures, software, and hardware devices to process transactions.

  • Business resumption plan – anticipates and minimizes the effects of disasters.

  • Disaster recovery – implements disaster resumption plan.

Fundamentals of Information Systems, Second Edition


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