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Lesson 12: E-Commerce Practices

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1 Lesson 12: E-Commerce Practices

2 Lesson 12 Objectives Compare e-commerce to traditional commerce
Discuss the three e-commerce models Discuss common business operations that use Web technologies Identify the relationship between Internet marketing and search engine optimization (SEO) Discuss e-commerce information-formatting technologies Identify payment models used in e-commerce Identify ways to protect private transactions Identify issues related to working in a global environment Identify ways to build e-commerce relationships using Web-based technology

3 Traditional Commerce vs. E-Commerce
Similarities Both aim to deliver a valued product or service Both want to serve a large audience Both strive to quickly deliver products and services Differences E-commerce customers expect shorter fulfillment time E-commerce customers must understand Web-based technologies E-commerce provides a global audience E-commerce orders are processed without human interaction or travel to a store location E-commerce relies upon encryption for security

4 E-Commerce Models Business to consumer (B2C)
Targets consumers or end users, and sells products and/or services Amazon.com, small business sites Business to business (B2B) Helps organizations to manage relationships and transactions with other businesses B2Bxchange Consumer to consumer (C2C) Consumers buy and sell products or services to other consumers eBay, Craigslist

5 E-Commerce Models Business to consumer (B2C)
Targets consumers or end users, and sells products and/or services Amazon.com, small business sites Business to business (B2B) Helps organizations to manage relationships and transactions with other businesses B2Bxchange Consumer to consumer (C2C) Consumers buy and sell products or services to other consumers eBay, Craigslist

6 Business and Internet Technologies
Traditional businesses also use e-commerce Not an either/or proposition Web technologies make traditional business more efficient E-commerce concepts: Supply chain management Enterprise resource planning (ERP) B2B information sharing

7 Supply Chain Management (SCM)
The ability to manage the process that generates a product and distributes it to customers You must manage the process that begins with raw materials and ends with a product delivered to a consumer Customer can be: An end user Another business that resells your product after adding value to it, known as a Value Added Reseller (VAR)

8 Supply Chain Management (SCM) (cont'd)
Traditional supply chain management model Professionals running e-commerce sites increasingly need to understand this model

9 Supply Chain Management (SCM) (cont'd)
Supply chain management involves the following business aspects: Product demand Information flow Finance management Essential supply chain management terms Upstream and downstream Capacity requirements plan Additional terms found in coursebook

10 Enterprise Resource Planning (ERP)
Use of software to create an automated plan for company operations ERP goal – enhance communication among all company departments and divisions through software automation Accomplished through automation of tasks and reporting All company/organization departments involved Common terms: Bolt-on system Application programming interface (API) Library

11 B2B Information Sharing with XML
XML allows information to be indexed once, then used in many different applications and companies DTD limitations XML schema

12 Internet Marketing and Search Engine Optimization (SEO)
Marketing terms Internet marketing consists of: Search engine optimization (SEO) Pay per click (PPC) Web analytics

13 Search Engine Optimization (SEO)
SEO improves the volume and quality of traffic to a Web site by structuring content to improve search engine ranking An SEO expert must: Learn about and consider the factors that search engines take into account as they rank sites Try to create and edit Web pages accordingly Common SEO tactics Writing quality Web copy

14 Pay Per Click (PPC) PPC – list your site high in search engine rankings by advertising on keywords that describe your product or service You simply pay to have your page listed as highly as possible Most Internet marketing campaigns combine SEO and PPC strategies

15 Web Analytics Web analytic types: On-site analytics Off-site analytics
Use trend analysis software to analyze server logs Tag pages Off-site analytics Identify the size of your market Identify competitors Determine your market penetration Conduct surveys Consult market research sources

16 Complete Internet Marketing
A successful marketing campaign involves: A competent leader A team effort Continued effort Follow-up

17 E-Commerce Information-Formatting Technologies
When businesses need to exchange information, they must agree upon universal information-formatting methods The two most common ways to format information are: Electronic Data Interchange (EDI) Open Buying on the Internet (OBI)

18 Electronic Data Interchange (EDI)
A universal method for formatting information so it can be transferred among organizations In place for over 20 years Useful for exchanging: Invoices Bills Purchase orders Inventory lists Supply chain information EDI implementation and drawbacks EDI and XML

19 Open Buying on the Internet (OBI)
Designed as an alternative to EDI Developed to target high-volume, low-cost transactions These account for almost 80 percent of most companies' purchasing activities OBI components OBI transactions OBI and EDI

20 E-Commerce Payment Technologies
Payment technologies include: Electronic Funds Transfer (EFT) Payment gateways Secure Electronic Transactions (SET) Open Trading Protocol (OTP) Secure Sockets Layer (SSL) / Transport Layer Security (TLS)

21 Electronic Funds Transfer (EFT)
A generic term that describes the ability to transfer funds using computers rather than paper Also known as wire transfer EFT systems must ensure: Confidentiality of payment information Integrity of payment information Merchant authentication Interoperability Automated Clearing House (ACH) Governed in the United States by the National Automated Clearing House Association Used in EFT

22 Payment Gateway Mediates between a merchant and a merchant bank
Once the merchant receives payment from a customer, the merchant uses the payment gateway to transmit credit card information to the bank Responsibilities: Forwarding information Authenticating participants Ensuring confidentiality Ensuring data integrity Payment gateway companies

23 Secure Electronic Transactions (SET)
Uses digital certificates to secure financial transactions Public and private keys ensure encryption, data confidentiality and non-repudiation Designed to allow both simple and complex transactions History of SET SET example SET vs. conventional transactions

24 Open Trading Protocol (OTP)
Alternative to SET An open standard (RFC 2802) Used for both B2C and B2B Often used with XML OTP features: Provides trading protocol options to control the way that the trade occurs Provides a record of a particular trade Supports real and virtual delivery of goods and services (payment tracking)

25 Secure Sockets Layer (SSL) / Transport Layer Security (TLS)
Not transaction methods Used to secure transactions Services provided: Authentication Data confidentiality Data integrity

26 SSL/TLS and Public Key Infrastructure (PKI)
You need a certificate to enable host authentication before you can begin an SSL session Public Key Infrastructure (PKI) A collection of individuals, networks and machines that comprise the ability to authoritatively confirm the identity of a person, host or organization

27 PKI Elements PKI elements include: Digital certificate
Certificate authority (CA) Registration authority (RA) Certificate server Certification chain

28 Digital Certificates and X.509
Digital certificates used in PKI conform to the ITU X.509 standard X.509 describes how to format digital certificates

29 PKCS Standards Public-Key Cryptography Standards (PKCS) PKCS #7
Used to store and transport certificates PKCS #7 Used to secure certificates PKCS #10 Used to generate a certificate request to a certificate authority (CA)

30 Certificate Life Cycle
Certificates usually have a limited life (e.g., 1 month, 2 years, 6 years) Life cycle helps reduce the likelihood of fraud Terms include: Certificate policy Certificate Practice Statement (CPS) Certificate expiration Certificate revocation Certificate suspension Certificate renewal Certificate destruction Certificate revocation list (CRL) Online Certificate Status Protocol (OCSP)

31 Additional SSL/TLS Concepts
The SSL/TLS handshake Common applications Beginning an SSL/TLS session Encryption begins after authentication Issues: Different host name Certificate expired Certificate date not yet valid Invalid certificate format Certificate presented by the server not signed by a recognized CA Incompatible encryption settings

32 Working in a Global Environment
By placing your business on the Web, you expand your audience to include anyone in the world with a browser and Internet access Consider the level to which you will accommodate potential customers from countries outside yours Issues to consider include: Currency differences International shipping Language concerns Relationship management

33 Currency and Trade Each country (e.g., China) and economic block (e.g., European Union) uses its own currency Businesses and organizations must be able to: Automatically calculate exchange rates for the day of the transaction Calculate taxes and tariffs on goods Taxes, tariffs and trade

34 International Shipping
Consider the following issues: Customs searches Costs incurred by customs Delays caused by customs All tariffs Legal and regulatory issues: A product you sell legally in one country may be illegal in another A product you sell may be heavily regulated

35 Language Concerns As you develop an e-commerce site, consider the following issues: The language(s) used by the target audience The characters necessary (e.g., alphanumeric, mathematical or currency symbols) Character sets and languages Computers can use different character sets Unicode

36 Relationship Management
Building trust Quality customer service Frequent contact Customer self-service Automatic order tracking Unattended choice Order customization

37 Lesson 12 Summary Compare e-commerce to traditional commerce
Discuss the three e-commerce models Discuss common business operations that use Web technologies Identify the relationship between Internet marketing and search engine optimization (SEO) Discuss e-commerce information-formatting technologies Identify payment models used in e-commerce Identify ways to protect private transactions Identify issues related to working in a global environment Identify ways to build e-commerce relationships using Web-based technology

38 Site Development Foundations
Introduction to Web Site Development Markup Language and Site Development Essentials XHTML Coding Horizontal Rules and Graphical Elements Hyperlinks HTML Tables Web Forms Image Techniques HTML Frames GUI HTML Editors Advanced Web Technologies E-Commerce Practices


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