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1PrinciplesofInformationSystems,SeventhEditionE-commerceisanewwayofconductingbusiness,andaswithanyothernewapplicationoftechnology,itpresentsbothopportunitiesforimprovementandpotentialproblemsIdentifyseveraladvantagesofe-commerceOutlineamultistagemodelthatdescribeshowe-commerceworksIdentifysomeofthemajorchallengesthatcompaniesmustovercometosucceedine-commerceDescribesomeofthecurrentusesandpotentialbenefitsofm-commerceIdentifyseverale-commerceapplications2PrinciplesofInformationSystems,SeventhEditionE-commercerequiresthecarefulplanningandintegrationofanumberoftechnologyinfrastructurecomponentsOutlinethekeycomponentsoftechnologyinfrastructurethatmustbeinplacefore-commercetosucceedDiscussthekeyfeaturesoftheelectronicpaymentssystemsneededtosupporte-commerce3PrinciplesofInformationSystems,SeventhEditionUsersofe-commercetechnologymustusesafeguardstoprotectthemselvesIdentifythemajorissuesthatrepresentsignificantthreatstothecontinuedgrowthofe-commerce4PrinciplesofInformationSystems,SeventhEditionOrganizationsmustdefineandexecuteastrategytobesuccessfuline-commerceOutlinethekeycomponentsofasuccessfule-commercestrategy5PrinciplesofInformationSystems,SeventhEditionAnIntroductiontoElectronicCommerceBusiness-to-consumer(B2C)e-commerce:customersdealdirectlywiththeorganization,avoidinganyintermediariesBusiness-to-business(B2B)e-commerce:participantsareorganizationsConsumer-to-consumer(C2C)e-commerce:participantsareindividuals,withoneservingasthebuyerandtheotherastheseller6PrinciplesofInformationSystems,SeventhEditionMultistageModelforE-commerceSearchandidentificationSelectionandnegotiationPurchasingproductsandserviceselectronicallyProductandservicedeliveryAfter-salesservice7PrinciplesofInformationSystems,SeventhEditionFigure8.1:MultistageModelforE-Commerce(B2BandB2C)8PrinciplesofInformationSystems,SeventhEditionE-CommerceChallengesDefineaneffectivee-commercemodelandstrategyNeedtochangedistributionsystemsandworkprocessesIntegrateWeb-basedorderprocessingwithtraditionalsystems9PrinciplesofInformationSystems,SeventhEditionFigure8.3:ThreeBasicComponentsofaSuccessfulE-CommerceModel10PrinciplesofInformationSystems,SeventhEditionFigure8.4:Web-BasedOrderProcessingMustBeLinkedtoTraditionalBack-EndSystems11PrinciplesofInformationSystems,SeventhEditionTheE-CommerceSupplyChainSupplychainmanagementisakeyvaluechaincomposedof:DemandplanningSupplyplanningDemandfulfillment12PrinciplesofInformationSystems,SeventhEditionFigure8.5:SupplyChainManagement13PrinciplesofInformationSystems,SeventhEditionTheE-CommerceSupplyChain(continued)E-commercesupplychainmanagementallowsbusinessesanopportunitytoachieve:IncreasedrevenuesanddecreasedcostsImprovedcustomersatisfactionInventoryreductionacrossthesupplychain14PrinciplesofInformationSystems,SeventhEditionBusiness-to-Business(B2B)E-CommerceAllowsmanufacturerstobuyatalowcostworldwideEnterprisescanselltoaglobalmarketOffersgreatpromisefordevelopingcountries15PrinciplesofInformationSystems,SeventhEditionBusiness-to-Consumer(B2C)E-CommerceConvenienceManygoodsandservicesarecheaperwhenpurchasedviatheWebComparisonshoppingDisintermediation:eliminationofintermediateorganizationsbetweentheproducerandtheconsumer16PrinciplesofInformationSystems,SeventhEditionConsumer-to-Consumer(C2C)E-CommerceOftendonethroughWebauctionsitessuchaseBayGrowthofC2Cisresponsibleforreducingtheuseoftheclassifiedpagesofnewspaperstoadvertiseandsellpersonalitems17PrinciplesofInformationSystems,SeventhEditionGlobalE-CommerceLocalization:adaptinganexistingU.S.-centricWebsitetoanotherlanguageandcultureStepsinvolvedinlocalizationRecognizingandconformingtothenuances,subtleties,andtastesoflocalculturesSupportingbasictradelawssuchasthosecoveringeachcountry’scurrency,paymentpreferences,taxes,andtariffsEnsuringthattechnologicalcapabilitiesmatchlocalconnectionspeeds18PrinciplesofInformationSystems,SeventhEditionGlobalE-Commerce(continued)DeterminewhichglobalmarketsmakethemostsenseforsellingproductsorservicesonlineDecidewhetherWebcontentshouldbegeneratedorupdatedcentrallyorlocally19PrinciplesofInformationSystems,SeventhEditionMobileCommerceMobilecommerce(m-commerce)reliesontheuseofwirelessdevices,suchaspersonaldigitalassistants,cellphones,andsmartphones,toplaceordersandconductbusinessIssuesconfrontingm-commerceUser-friendlinessofthewirelessdeviceNetworkspeedSecurity20PrinciplesofInformationSystems,SeventhEditionTechnologyNeededforMobileCommerceHandhelddevicesusedform-commercehavelimitationsthatcomplicatetheiruseWirelessapplicationprotocol(WAP):astandardsetofspecificationsforInternetapplicationsthatrunonhandheld,wirelessdevices21PrinciplesofInformationSystems,SeventhEditionE-CommerceApplications:RetailandWholesaleElectronicretailing(e-tailing):thedirectsalefrombusinesstoconsumerthroughelectronicstorefronts,typicallydesignedaroundanelectroniccatalogandshoppingcartmodelCybermall:asingleWebsitethatoffersmanyproductsandservicesatoneInternetlocationManufacturing,repair,andoperations(MRO)goodsandservices22PrinciplesofInformationSystems,SeventhEditionManufacturingToraiseprofitabilityandimprovecustomerservice,manymanufacturersmovetheirsupplychainoperationsontotheInternetElectronicexchange:anelectronicforumwheremanufacturers,suppliers,andcompetitorsbuyandsellgoods,trademarketinformation,andrunback-officeoperations23PrinciplesofInformationSystems,SeventhEditionFigure8.6:Modelofan

ElectronicExchange24PrinciplesofInformationSystems,SeventhEditionMarketingMarketsegmentation:theidentificationofspecificmarketstotargetthemwithadvertisingmessagesTechnology-enabledrelationshipmanagement:useofdetailedinformationaboutacustomer’sbehavior,preferences,needs,andbuyingpatternstosetprices,negotiateterms,tailorpromotions,addproductfeatures,andotherwisecustomizetheentirerelationshipwiththatcustomer25PrinciplesofInformationSystems,SeventhEditionInvestmentandFinanceOnlinestocktradingOnlinebanking26PrinciplesofInformationSystems,SeventhEditionFigure8.7:KeyTechnologyInfrastructureComponents27PrinciplesofInformationSystems,SeventhEditionHardwareStoragecapacityandcomputingpowerrequiredoftheWebserverdependson:SoftwarethatwillrunontheserverVolumeofe-commercetransactionsWebsitehosting28PrinciplesofInformationSystems,SeventhEdition

WebServerSoftwareSecurityandidentificationWebsitesmustbedesignedtoprotectagainstattacksDenial-of-service(DOS)attackRetrievingandsendingWebpagesWebsitetracking29PrinciplesofInformationSystems,SeventhEditionWebServerSoftware(continued)WebsitedevelopmentWebpageconstructionStaticWebpageDynamicWebpage30PrinciplesofInformationSystems,SeventhEditionE-CommerceSoftwareCatalogmanagementProductconfigurationShoppingcartfacilitiesE-commercetransactionprocessingWebtrafficdataanalysis31PrinciplesofInformationSystems,SeventhEditionFigure8.8:ElectronicShoppingCart32PrinciplesofInformationSystems,SeventhEditionE-CommerceTransactionProcessingE-commercetransactionprocessingsoftware:connectsparticipantsinthee-commerceeconomyandenablescommunicationbetweentradingpartners,regardlessoftheirtechnicalinfrastructureFullyautomatestransactionprocessesfromorderplacementtoreconciliationWebsitetrafficdataanalysissoftware:processesandanalyzesdatafromtheWeblogfiletoprovideusefulinformationtoimproveWebsiteperformance33PrinciplesofInformationSystems,SeventhEditionElectronicPaymentSystemsDigitalcertificate:anattachmenttoane-mailmessageordataembeddedinaWebpagethatverifiestheidentityofasenderoraWebsiteCertificateauthority(CA):atrustedthirdpartythatissuesdigitalcertificatesSecureSocketsLayer(SSL):acommunicationsprotocolusedtosecuresensitivedataElectroniccash:anamountofmoneythatiscomputerized,stored,andusedascashfore-commercetransactions34PrinciplesofInformationSystems,SeventhEditionElectronicPaymentSystems(continued)Electronicwallet:acomputerizedstoredvaluethatholdscreditcardinformation,electroniccash,owneridentification,andaddressinformationCreditcardChargecardDebitcardSmartcard35PrinciplesofInformationSystems,SeventhEditionThreatstoE-CommerceE-andm-commerceincidentsTheftofintellectualpropertyIntellectualproperty:music,books,inventions,paintings,andotherspecialitemsprotectedbypatents,copyrights,ortrademarksPatentsonbusinessprocesses36PrinciplesofInformationSystems,SeventhEditionFraudPhishing:bogusmessagespurportedlyfromalegitimateinstitutiontoprypersonalinformationfromcustomersbyconvincingthemtogotoa“spoof”WebsiteOnlineauctionfraudSpam:e-mailsenttoawiderangeofpeopleandUsenetgroupsindiscriminately37PrinciplesofInformationSystems,SeventhEditionFraud(continued)PyramidschemesInvestmentfraudStockscams38PrinciplesofInformationSystems,SeventhEditionInvasionofConsumerPrivacyOnlineprofiling:thepracticeofWebadvertisers’recordingonlinebehaviortoproducetargetedadvertisingClickstreamdata:datagatheredbasedontheWebsitesvisitedandtheitemsclickedonSafeharborprinciples:principlesthataddressthee-commercedataprivacyissuesofnotice,choice,andaccess39PrinciplesofInformationSystems,SeventhEditionFigure8.9:TRUSTeSeal40PrinciplesofInformationSystems,SeventhEditionFigure8.10:BBBOnlinePrivacySeal41PrinciplesofInformationSystems,SeventhEditionTable8.4:HowtoProtectYour

PrivacyWhileOnline42PrinciplesofInformationSystems,SeventhEditionStrategiesforSuccessful

E-Commerce:DevelopinganEffectiveWebPresenceDecidewhichtasksthesitemustaccomplishAneffectiveWebsitecreatesanattractivepresenceandmeetstheneedsofitsvisitorsItmaybenecessarytoredefineyoursite’sbusinessmodeltocapturenewbusinessopportunities43PrinciplesofInformationSystems,SeventhEditionPuttingupaWebSiteWebsitehostingcompanies:companiesthatprovidethetoolsandservicesrequiredtosetupaWebpageandconducte-commercewithinamatterofdaysandwithlittleup-frontcostStorefrontbroker:companiesthatactasmiddlemenbetweenyourWebsiteandonlinemerchantsthathavetheproductsandretailexpertise44PrinciplesofInformationSystems,SeventhEditionBuildingTraffictoYourWebSiteObtainandregisteradomainnameMakeyoursitesearch-engine-friendlyMetatag:aspecialHTMLtag,notvisibleonthedisplayedWebpage,thatcontainskeywordsrepresentingyoursite’scontent,whichsearchenginesusetobuildindexespointingtoyourWebsiteWebsitetrafficdataanalysissoftware45PrinciplesofInformationSystems,SeventhEditionMaintainingandImprovingYourWebSiteBealerttonewtrendsanddevelopmentsine-commerceBepreparedtotakeadvantageofnewopportunitiesPersonalization:theprocessoftailoringWebpagestospecificallytargetindividualconsumersExplicitImplicit46PrinciplesofInformationSystems,SeventhEditionSummaryInbusiness-to-consumer