1. Elias M. Awad Third Edition ELECTRONIC COMMERCE From Vision to Fulfillment 12-1© 2007 Prentice-Hall, Inc ELC 200 Day 18

2. 12-2 © 2007 Prentice-Hall, Inc Agenda Assignment 6 Corrected –7 A’s, 7 B’s, 1 C, 2 D’s Assignment 7 Posted –1 more 2 go –Due April 10 Quiz 3 will on April 7 –Chap 7, 8, 9, 10 & 11 ECommerce Initiative Frameworks –GuidelinesGuidelines –Due MAY 7 @ 10 AM Finish Discussion on E-Core Values: Ethical, Legal, Taxation, and International Issues Begin Discussion on Going On Line

3. 12-3 © 2007 Prentice-Hall, Inc End of days? (subject to change) Today –Chap 12 ECore Values –Chap 16 Going on line April 7 –Quiz 3 –Chaps 7, 8, 9, 10 & 11 –20 M/C and 4 short essay April 10 & 14 –Chap 13 eSecurity and the USA Patriot Act –Assignment 7 due April 10 –Assignment 8 Posted April 17 & 21 –Chap 14 Encryption –Assignment 8 Due April 21 April 24 & 28 –Chap 15 getting the money –Optional Assignment 9?? May 1 –Quiz 4 –Chapters 12  16 –20 M/C and 4 short essay May 7 @ 10 AM –eCommerce frameworks due –Student presentations 5 Mins!

4. Elias M. Awad Third Edition ELECTRONIC COMMERCE From Vision to Fulfillment 12-4© 2007 Prentice-Hall, Inc E-Core Values: Ethical, Legal, Taxation, and International Issues

5. 12-5 © 2007 Prentice-Hall, Inc Copyrights, Trademarks, and Trade Names Intellectual property : includes software, books, music, videos, trademarks, copyrights, and Web pages Copyright : ownership of an original work created by an author –Copyright law is a law that gives the author or creator of a tangible product the right to exclude others from using the finished work –Protected works include: Graphic works Web sites –Good for the life of its author plus an additional 70 years after the author’s death –http://www.copyright.gov/http://www.copyright.gov/ The Digital Millennium Copyright Act (DMCA)Digital Millennium Copyright Act Trademark : registration of a company’s trade name so that others cannot use it; a word or a symbol that distinguishes a good from other goods in the market (registered with Patent Office)

6. 12-6 © 2007 Prentice-Hall, Inc Taxation Issues Sales tax is a very controversial issue On the Internet, tax collection is not easy The rules for taxation differ by country All indicators suggest that sales-tax revenue loss is projected to increase exponentially unless something is done to collect the tax Internet Tax Freedom Act

7. 12-7 © 2007 Prentice-Hall, Inc Taxation Issues (Cont’d) Internet Tax Freedom Act –A three-year moratorium on special, multiple, or discriminatory taxes on the Internet that would be imposed by any state or local governments –An advisory committee to explore different issues relating to Internet taxes, government Internet policy, and its effects on e-commerce –The federal government is barred from taxing the Internet or any transaction that takes place through it

8. 12-8 © 2007 Prentice-Hall, Inc Internet Taxation Today US –ITFA extended on October 30, 2007 for 7 more years –Sales Tax Fairness and Simplification Act (H.R. 3396) in hearingsSales Tax Fairness and Simplification Act(H.R. 3396) http://www.ncsl.org/programs/fiscal/tctelcom.htm EU VAT still in place –https://secure.hmce.gov.uk/ecom/voes/welcome.do;jsessionid= 26E449F8278200994D04BD766AEC3432https://secure.hmce.gov.uk/ecom/voes/welcome.do;jsessionid= 26E449F8278200994D04BD766AEC3432 WTO – no internet taxes More Info –http://www.cob.sjsu.edu/nellen_a/e-links.htmlhttp://www.cob.sjsu.edu/nellen_a/e-links.html More information on Internet taxation –Internet_taxation.pptInternet_taxation.ppt

9. 12-9 © 2007 Prentice-Hall, Inc Jurisdiction The legitimate scope of government power Whose laws apply? State and federal laws limit a court’s jurisdiction over a defendant from another state International jurisdiction is especially complex and controversial –In an international dispute over e-commerce, whose laws apply? –Violations of IP

10. 12-10 © 2007 Prentice-Hall, Inc Guidelines Regarding Domain Names and Trademarks Find out whether the proposed domain name infringes on any trademarks –http://www.uspto.gov/main/trademarks.htmhttp://www.uspto.gov/main/trademarks.htm Secure federal trademark registration of the proposed name Register the proposed domain name with InterNIC, http://www.internic.net http://www.internic.net In the event of a poached domain name, bring a lawsuit to force InterNIC to reassign the name to the original owner Get permission before linking to other Web sites

11. 12-11 © 2007 Prentice-Hall, Inc International Issues What right does any one country have to determine the materials that should be available on the Internet? Can a country regulate an entity in cyberspace, but not on the soil of that country? World Intellectual Property Organization (WIPO) succeeded in two treaties to adapt copyright rules for e-commerce EU’s Electronic Commerce Directive gave online business firms assurance, in 2000, that the firms would have to comply with laws only where the firms are based, not in any other country in the union

12. 12-12 © 2007 Prentice-Hall, Inc International Issues (Cont’d) Digital Millennium Copyright Act of 1998 EU’s Rome II Directive hopes to allow consumers to sue e-businesses in their home country Hague Convention drafted a treaty in 1992 designed to set global standards for defamation, copyright, and libel on the Internet

13. 12-13 © 2007 Prentice-Hall, Inc Intellectual Property Intellectual property describes the ideas, inventions, technologies, music, and literature that are intangible when created and are converted into tangible products for market consumption IP laws and cultural norms vary from country to country

14. 12-14 © 2007 Prentice-Hall, Inc Management Implications Legal rules that define the Internet are yet to be clarified Long-range effect of Internet patents, especially those held by e-companies like Amazon.com that cover fundamental online business practices Ultimate goal in doing business on the Internet is to promote standards that everyone can accept or adopt Management must focus on legal and consumer protection issues surrounding B2C e-commerce

15. 12-15 © 2007 Prentice-Hall, Inc Chapter Summary Legal and ethical implications of the Internet are attracting attention in industries and governments around the world Question of ethics in e-commerce is the current challenge confronting U.S. organizations Several threats to ethics Privacy is a basic American value Many of the legal questions that arise in e- commerce are not settled due to lack of specific laws or legal guidelines

16. 12-16 © 2007 Prentice-Hall, Inc Chapter Summary (Cont’d) Internet copyright and trademark violations fall under intellectual property laws The question of whether a Web site is a product or a service elicits varied opinions On the Internet, tax collection is not easy The ultimate goal of doing business on the Internet is to promote ethics through standards that everyone can accept or adopt

17. Elias M. Awad Third Edition ELECTRONIC COMMERCE From Vision to Fulfillment 12-17© 2007 Prentice-Hall, Inc Going Online

18. 12-18 © 2007 Prentice-Hall, Inc The focus of this chapter is on several learning objectives How to build a business on the Internet - from beginning to end What it takes to plan effectively The hardware, software, security, and setup considerations in e-commerce infrastructure The critical elements in the design of an e- business How to market e-presence How to manage customer feedback

19. 12-19 © 2007 Prentice-Hall, Inc Building an Internet Business - The Life Cycle

20. 12-20 © 2007 Prentice-Hall, Inc Business Planning and Strategizing (1) What is the best way to launch the business on the Internet? How much of the company’s business should be on the Internet? Requirements –Top management support –A champion in top management to sponsor the push to the Internet

21. 12-21 © 2007 Prentice-Hall, Inc Business Planning and Strategizing (Cont’d) When should the business go on the Web? Strategize the following areas: –Vision –Resources –Culture –What is the key product or service at stake? –What is the main goal of going online?

22. 12-22 © 2007 Prentice-Hall, Inc Traditional Business versus E-business

23. 12-23 © 2007 Prentice-Hall, Inc Developing the Online Strategic Plan The most critical part of going online is the plan - the blueprint An online plan is a tool with communication, management, and planning in mind The plan helps you track, monitor, and evaluate your progress The plan guides you through various phases of the business

24. 12-24 © 2007 Prentice-Hall, Inc Strategic Planning Questions to Consider 1.How familiar are you with the Internet? 2.Who will buy the product? 3.Are you planning to be a short-term presence or a long-term presence? 4.Who are your competitors? 5.How good will your products look? 6.How will you present your products offers? 7.How will you manage and process transactions? 8.How will the product be shipped? 9.How will you handle unexpected change? 10.How will you handle CRM?

25. 12-25 © 2007 Prentice-Hall, Inc Capacity Planning Determining in advance the capacity of the bandwidth (pipeline) that will accommodate the traffic to and from the Web site Planning for scalability The objective is to ensure that your customers do not go somewhere else

26. 12-26 © 2007 Prentice-Hall, Inc Going Global Strategic planning means considering the politics of going global A global strategy means setting up foreign distribution with IT talent abroad Think like a local Make sure your Web content is not misinterpreted Can your IT infrastructure handle your international traffic?

27. 12-27 © 2007 Prentice-Hall, Inc Deciding on Type of Web Site Clearly defined goals keep your priorities in perspective Some main goals for Web sites are: –Marketing –Online sales and service –Information delivery –Customer support

28. 12-28 © 2007 Prentice-Hall, Inc Types of E-Commerce Strategies

29. 12-29 © 2007 Prentice-Hall, Inc Technology Infrastructure (2) What hardware will you need?? What Software will you need? Find an ISP. How will you deal with security? How will you staff your company?

30. 12-30 © 2007 Prentice-Hall, Inc Software Issues eCommerce on the Internet requires basic software –File transfer protocol (FTP) –Remote Console VNC –http://www.realvnc.com/http://www.realvnc.com/ –http://www.tightvnc.com/http://www.tightvnc.com/ –Search capabilities –NetNews -- RSS feeds http://en.wikipedia.org/wiki/RSS –E-mail –Broadband connection (DSL, Cable, or Wireless) –A browser IE, FireFox, Opera, Safari

31. 12-31 © 2007 Prentice-Hall, Inc Security Security is the critical backdrop that must be in place for every step to work Security is the protection of data, software, or hardware against accidental or intentional damage from a defined threat Three types of security risk: –Document security entails the integrity of the Web site and its information –Customer privacy has to do with embedding devices in the visitor’s hard disk to track site usage –System security deals with the way the network, the Web server, and the e-commerce infrastructure prevent unauthorized access and tampering with e-commerce traffic

32. 12-32 © 2007 Prentice-Hall, Inc Security Rules Control access to the Web server Update server software and encode security measures to ensure server - Web site integrity Use firewalls to protect the merchant’s internal network Monitor the traffic and detect irregularities in time to minimize damage Ensure a hot standby for every piece of hardware and software

33. 12-33 © 2007 Prentice-Hall, Inc Design Phase (3) Design, build and host the web site What makes a good web site? Will you outsource? What services will you offer? What components will you need for your website??

34. 12-34 © 2007 Prentice-Hall, Inc Attributes of the Web Storefront Customers should be able to find the product quickly The site should have mechanisms to process the order and send it to the fulfillment center for quick and secure packing and shipping The site should have mechanisms to generate a summary of the order and produce a printable receipt The site should have mechanisms to send a confirming e-mail to customers

35. 12-35 © 2007 Prentice-Hall, Inc Software Program Cluster Components Database server Catalog builder Shopping cart Order-processing system

36. 12-36 © 2007 Prentice-Hall, Inc Doing It Yourself? or Outsourcing? Should the IT department of the business design the Web site? Should the Web site design be assigned to an outside Web designer? Control versus Speed & Expertise How much $ do you have?

37. 12-37 © 2007 Prentice-Hall, Inc Web Site Design Issues User control and freedom Consistency and standards Recognition rather than recall Efficient design Recovery from error Help desk

38. 12-38 © 2007 Prentice-Hall, Inc The Marketing Phase (4) Providing good site service Advertising Know your customer Making the sale –Stock control –Collecting the cash Delivering the goods and following up

39. 12-39 © 2007 Prentice-Hall, Inc The Marketing Phase

40. 12-40 © 2007 Prentice-Hall, Inc The Fulfillment Phase (5) Fulfillment is what happens after a sale is made –Packing up the merchandise –Shipping the merchandise –Answering questions about the order –Sending out the bill or verifying e-payment –Following up to see if the customer is satisfied Fulfillment is honoring a commitment to deliver goods or services after payment has been assured To the customer order fulfillment is the most important business activity of all

41. 12-41 © 2007 Prentice-Hall, Inc Fulfillment Issues Product availability Matching the products for sale to the products in the inventory Out-of-stock notice Back orders Processing orders Controls

42. 12-42 © 2007 Prentice-Hall, Inc The Maintenance and Enhancement Phase (6) Maintenance means keeping a system or business on course, based on the initial design or plan The goal of maintenance is to ensure the usability of the Web site Enhancement means implementing upgrades or changes that are designed to improve the system’s productivity The goal of enhancement is to upgrade the Web site and the business-to-consumer connection to meet the latest standards and customer expectations

43. 12-43 © 2007 Prentice-Hall, Inc Important Tips for Managing Customer Feedback Set up a list of frequently asked questions and post the list in a prominent location on the homepage Make sure the information can be accessed easily and quickly Make sure any page downloads within eight seconds and test it on slow, older computers Avoid unnecessarily large images or bandwidth-hogging elements Answer e-mail

44. 12-44 © 2007 Prentice-Hall, Inc Important Items for Managing Customer Service Updating orders Order status Technical support Localization Handling customer expectations

45. 12-45 © 2007 Prentice-Hall, Inc SWOT An analytic method used to determine competitive advantage –Strengths –Weakness –Opportunities –Threats

46. 12-46 © 2007 Prentice-Hall, Inc STRENGHTS (internal) Define areas you excel in –What will your initiative do better than others? –What are your core competencies (things you are good at)? –Do you have a clear strategic direction? –What resources do you have that competitors may not have?

47. 12-47 © 2007 Prentice-Hall, Inc WEAKNESSES (internal) Evaluate your liabilities –Where are you weak in relation to your competitors? –What skills and resources are you lacking? –What needs to be improved in your initiative? –Why were not able to improve the weaknesses you discovered?

48. 12-48 © 2007 Prentice-Hall, Inc OPPORTUNITIES (external) Analyze your customers and market potential –Identify favorable market conditions –Identify emerging technologies in support of your initiative –Identify changes in legislation and public policy that will have a supporting effect on your initiative

49. 12-49 © 2007 Prentice-Hall, Inc THREATS (external) Analyze potential challenges –What are your obstacles? –What are your competitors doing? –Identify changes in legislation and public policy that will have an adverse effect on your initiative.

50. 12-50 © 2007 Prentice-Hall, Inc SWOT Analysis

51. 12-51 © 2007 Prentice-Hall, Inc Chapter Summary Launching a business on the Internet involves a life cycle Strategizing means evaluating a company’s position and the competition, setting a course for the years ahead, and determining how to get it done Specific goals need to be considered when planning e-business

52. 12-52 © 2007 Prentice-Hall, Inc Chapter Summary (Cont’d) The hardware, software, security, and set-up phase focuses on: –Hardware to buy –Software to buy –Where to buy Four essentials of launching a business on the Internet are –Security –Shopping carts –Payments –Marketing Behind every Web site are programs stored on a Web server

53. 12-53 © 2007 Prentice-Hall, Inc Chapter Summary (Cont’d) In Web design, the focus is on –user control and freedom –Consistency and standards –Recognition –Aesthetic design –Recovery from error –Help desk to handle customer queries and complaints Marketing phase includes: –Advertising –Knowing the customer –Making the sale –Getting the goods –Follow-up procedures after the sale

54. 12-54 © 2007 Prentice-Hall, Inc Chapter Summary (Cont’d) Fulfillment phase typically includes: –Packing up the merchandise –Shipping the goods –Answering questions about the order –Sending out the bill or a copy of the bill Maintenance and Enhancement Phase addresses the need to keep the Web storefront up to date and to make any changes that will enhance the use and effectiveness of the Web site