Principles of Information Systems Eighth Edition Chapter 8 Electronic and Mobile Commerce

An Introduction to Electronic Commerce Electronic commerce: conducting business activities electronically over computer networks Types of business activities that are strong candidates for conversion to e-commerce Paper based Time-consuming Inconvenient for customers Principles of Information Systems, Eighth Edition

Business-to-Business (B2B) E-Commerce Subset of e-commerce All the participants are organizations Useful tool for connecting business partners in a virtual supply chain to cut resupply times and reduce costs Principles of Information Systems, Eighth Edition

Business-to-Consumer (B2C) E-Commerce Form of e-commerce in which customers deal directly with an organization and avoid intermediaries Squeezes costs and inefficiencies out of supply chain Can lead to higher profits Can lead to lower prices for consumers E-commerce via the Internet Many goods and services are cheaper online The Internet allows consumers to easily compare prices, features, and value Principles of Information Systems, Eighth Edition

Consumer-to-Consumer (C2C) E-Commerce Subset of e-commerce that involves consumers selling directly to other consumers Example: eBay Customers buy and sell items directly to each other through the site 181 million users buy and sell items valued at more than $44 billion Other popular online auction Web sites: Craigslist, uBid, Yahoo! Auctions, Onsale, and WeBidz Principles of Information Systems, Eighth Edition

eGovernment Use of information and communications technology to simplify the sharing of information, speed formerly paper-based processes, and improve the relationship between citizen and government Forms of eGovernment Government-to-consumer (G2C) Government-to-business (G2B) Government-to-government (G2G) Principles of Information Systems, Eighth Edition

Multistage Model for E-commerce Figure 8.1: Multistage Model for E-Commerce (B2B and B2C) Principles of Information Systems, Eighth Edition

Multistage Model for E-commerce (continued) Figure 8.2: Product and Information Flow for HP Printers Ordered over the Web Principles of Information Systems, Eighth Edition

E-Commerce Challenges Defining an effective e-commerce model and strategy Community, content, and commerce Changing distribution systems and work processes to manage shipments of individual units directly to consumers B2C systems must be able to handle split-case distribution Integrating Web-based order processing with traditional systems Principles of Information Systems, Eighth Edition

E-Commerce Challenges (continued) Figure 8.3: Three Basic Components of a Successful E-Commerce Model Principles of Information Systems, Eighth Edition

E-Commerce Challenges (continued) Figure 8.4: Web-Based Order Processing Must Be Linked to Traditional Back-End Systems Principles of Information Systems, Eighth Edition

An Introduction to Mobile Commerce Mobile commerce (m-commerce) relies on the use of wireless devices, such as personal digital assistants, cell phones, and smart phones, to place orders and conduct business Handset manufacturers are working with communications carriers to develop appropriate wireless devices, related technology, and services Content providers and mobile service providers are working together more closely than ever Principles of Information Systems, Eighth Edition

Technology Needed for Mobile Commerce Improved interface between the wireless device and its user Improved network speed Security Encryption, digital certificates Web applications that are accessible for handheld users Principles of Information Systems, Eighth Edition

Technology Needed for Mobile Commerce (continued) Wireless application protocol (WAP): standard set of specifications for Internet applications that run on handheld, wireless devices Effectively serves as a Web browser for such devices Uses the Wireless Markup Language (WML), which is designed for effectively displaying information on small devices وظيفته الأساسية هي تمكين الاتصال بالإنترنت من خلال [[هاتف نقال زود متصفح WAP كل الخدمات الأساسية التي يزودها متصفح وب في حاسوب عادي ولكن بطريقة مبسطة تتلاءم مع إمكانيات وحدود الهاتف النقال. مواقع WAP هي عبارة عن مواقع مكتوبة بلغة  Principles of Information Systems, Eighth Edition

Retail and Wholesale Electronic retailing (e-tailing): direct sale from business to consumer through electronic storefronts Electronic storefronts are typically designed around an electronic catalog and shopping cart model Cybermall: single Web site that offers many products and services at one Internet location Manufacturing, repair, and operations (MRO) goods and services Principles of Information Systems, Eighth Edition

Investment and Finance Online stock trading Online tools for doing research and analysis Online banking Customers can check account balances, transfer money among accounts, pay bills, etc. Electronic bill presentment Principles of Information Systems, Eighth Edition

Anywhere, Anytime Applications of Mobile Commerce M-commerce devices are ideal for accessing personal information and receiving targeted messages for a particular consumer Through m-commerce, companies can establish one-to-one marketing relationships with individual consumers anytime and anywhere The most successful m-commerce applications suit local conditions and people’s habits and preferences Examples: banking, stock trading, information services, retail, advertisements Principles of Information Systems, Eighth Edition

Advantages of Electronic and Mobile Commerce Global reach: helps reduce gap between rich and poor countries Reduces costs: increases speed and accuracy Speeds the flow of goods and information Increases accuracy: eliminates human data-entry error Improves customer service: information about delivery status and ability to meet customer demand Principles of Information Systems, Eighth Edition

Security Methods to increase security Payment Card Industry security standard Address Verification System Card Verification Number technique Visa’s Advanced Authorization process Federal Financial Institutions Examination Council’s “Authentication in an Internet Banking Environment” guidelines Biometric technology Principles of Information Systems, Eighth Edition

Fraud Phishing: sending bogus messages purportedly from a legitimate institution to pry personal information from customers by convincing them to go to a “spoof” Web site Click fraud: arises in a pay-per-click online advertising environment when additional clicks are generated beyond those that come from actual, legitimate users Online auction fraud Principles of Information Systems, Eighth Edition

Lack of Internet Access Digital divide: difference between people who do and people who don’t have access or capability to use high-quality, modern information and communications technology to improve their standard of living Exists between: More and less developed countries Economic classes The educated and uneducated Those who live in cities and those who live in rural areas Principles of Information Systems, Eighth Edition

Return on Investment The investment required for a large firm to establish and operate a B2B or B2C Web site can be in the millions of dollars Common problem with determining return on investment: difficult to forecast project costs and benefits Principles of Information Systems, Eighth Edition

Taxation U.S. Supreme Court ruling: Internet-based merchants must apply sales tax only when buyers live in a state where the company has physical facilities, or “nexus” Difficult for states to collect sales taxes on Internet purchases Principles of Information Systems, Eighth Edition

Strategies for Successful E-Commerce Companies must develop effective Web sites that include the following characteristics: Easy to use Accomplish the goals of the company Safe and secure Affordable to set up and maintain Principles of Information Systems, Eighth Edition

Building Traffic to Your Web Site Obtain and register a domain name Make your site search-engine-friendly Meta tag: special HTML tag that contains keywords representing your site’s content Keywords are used by search engines to build indexes pointing to your Web site Web site traffic data analysis software Adapting Web site design for global consumers Principles of Information Systems, Eighth Edition

Electronic Payment Systems Digital certificate: attachment to an e-mail message or data embedded in a Web page that verifies the identity of a sender or a Web site Certificate authority (CA): trusted third party that issues digital certificates Secure Sockets Layer (SSL): communications protocol used to secure sensitive data Electronic cash: amount of money that is computerized, stored, and used as cash for e-commerce transactions مرجع مصدق Principles of Information Systems, Eighth Edition

Electronic Payment Systems (continued) Credit card Charge card Debit card Smart card: a credit card–sized device with an embedded microchip to provide electronic memory and processing capability Principles of Information Systems, Eighth Edition