1. Chapter 10 Building E-Commerce Applications and Infrastructure

2. Learning Objectives
Discuss the major steps in developing an EC application
Describe the major EC applications and list their major functionalities
List the major EC application development options along with their benefits and limitations
Describe various EC application outsourcing options
Discuss the major components of an electronic catalog and EC application suite

3. Learning Objectives (cont.)
Describe various methods for connecting an EC application to backend systems and databases
Describe the criteria used in selecting an outsourcing vendor and package
Understand the value and uses of EC application log files
Discuss the importance and difficulties of EC application maintenance

4. Tracking United Parcel Service (UPS) Shipments
The Problem
UPS has provided the means for customers to track their shipments to determine the status and whereabouts of a particular package for some time this was accomplished over the telephone
Customers would call UPS with the tracking number
Operator would look up the status of the shipment and relay the information to the customer
Servicing cost about $2 per call

5. Tracking United Parcel Service (UPS) Shipments (cont.)
The Solution
UPS created a Web site (ups.com) in that enabled customers to:
Track their shipments online
Determine the cost and transit time for delivery of a package
Schedule a package for pickup
Locate the nearest drop-off facility

6. Tracking United Parcel Service (UPS) Shipments (cont.)
The Results
UPS site services over 4 million online tracking requests per day
Also offers:
Option of tracking their packages through wireless devices
A set of e-commerce solutions and a technology infrastructure that enables other companies to incorporate UPS’ online order entry, shipping, and tracking capabilities
E-commerce tools and services for managing a an enterprises’ overall supply chain

7. Landscape and Framework of EC Application Development
Development process
Step 1: EC architecture creation plan includes:
Business goals and vision for the site
Information and data required to fulfill the goals and vision
Application modules that will deliver and manage the information and data
Specific hardware and software on which the application modules will run,
Human resources and procedures for implementing the architecture

8. Landscape and Framework of EC Application Development (cont.)
Step 2: Select a development option—developed in-house, outsourced to another party, or some combination of both
Step 3: Installing, testing, and deploying
Unit testing—testing application software modules one at a time
Integration testing—testing the combination of application modules acting in concert
Usability testing –testing quality of the user’s experience when interacting with a Web site
Acceptance testing—determining whether a Web site meets the original business objectives and vision
Step 4: Operation and maintenance—should be continually updated

9. Major EC Applications and Their Functionalities
A storefront should offer buyers the means to:
Discover, search, evaluate, and compare products
Select product ad negotiate price
Place an order using a shopping cart
Payment of purchase usually on credit
Order confirmation
Track orders once they are shipped

10. Major EC Applications and Their Functionalities (cont.)
Merchant’s needs to:
Provide access to personalized catalogs
Provide electronic shopping cart
Verify customer credit and approve purchases
Process the orders (back-end services)
Arrange for product delivery
Track shipments to make sure they are delivered
Provide the means for buyers and visitors to register, make comments, or request additional information

11. Major EC Applications and Their Functionalities (cont.)
Merchants (cont.)
Answer customers’ questions
Analyze purchases in order to customize buyers’ experiences
Provide Web-based post-sale support
Create the capability for cross-sell and up-sell
Provide language translation if needed
Measure and analyze the traffic at the site

12. Major EC Applications and Their Functionalities (cont.)
A storefront must contain three interrelated subsystems:
Merchant system or storefront that provides the merchant’s catalog and shopping cart
Transaction system for processing orders, payments, and other aspects of the transaction
Payment gateway that routes payments through existing financial systems

13. Major EC Applications and Their Functionalities (cont.)
Supplier sell-side site:
Personalized catalogs and Web pages for all major buyers
B2B payment gate
Electronic contract negotiation features
Product configuration by customers
Affiliate program capabilities
Business alerts

14. Major EC Applications and Their Functionalities (cont.)
Procurement
E-procurement site is an online intermediary that offers businesses access to hundreds of parts and services provided by suppliers
Catalog Management
Collaborative Planning
On-line Purchase
Purchase Order Handling
Document Service
Historical Performance Service
Information Service
System Administration

15. Major EC Applications and Their Functionalities (cont.)
Aggregating catalogs
Search engine for locating items with particular characteristics
Comparison engine for alternative vendors
Ordering mechanism
Budget and authorization feature
Usage comparisons (among various departments)
Payment mechanism (e.g., use of a purchasing card)

16. Major EC Applications and Their Functionalities (cont.)
Reverse auctions
Catalog of items to be tendered and their content management
Search engine
Personalized pages for potential large bidders
Reverse auction mechanism
Facility to help prepare, issue, manage, and respond to a buyer’s requests for quotes (RFQs)
Ability to bid dynamically
Automatic vendor approval and workflow

17. Major EC Applications and Their Functionalities (cont.)
Reverse auctions (cont.)
Electronic collaboration with trading partners
Standardization of RFQ writing
A site map
A mechanism for selecting suppliers to participate
Automatic matching of suppliers with RFQs
Automatic business process workflow
Ability for bidders to use m-commerce for bidding
Automated language translation

18. Major EC Applications and Their Functionalities (cont.)
Exchanges
Collaboration services
Community services
Web-automated workflow
Integrated business process solutions
Central coordination of global logistics
Integration services

19. Major EC Applications and Their Functionalities (cont.)
Exchanges (cont.)
Data mining, customized analysis and reporting, real-time transactions, trend and customer behavior tracking
Transaction flow managers
Negotiation mechanisms
Language translation
Comprehensive links to related resources

20. Development Options for EC Applications
Insourcing—in-house development of applications
Development approaches
Build from scratch
Build from components
Prototyping methodology

21. Development Options for EC Applications (cont.)
Buy the applications (turnkey approach)
Disadvantages
Software doesn’t exactly fit needs
May be difficult to modify
Loss of control over improvements and versions
Difficult to integrate
Vendors may drop product or go out of business
Advantages
Availability of many off-the-shelf packages
Saves time
Requires few dedicated personnel
Company knows what it is getting
Not the first and only user of the software

22. Development Options for EC Applications (cont.)
Lease
Types of leasing vendors
Lease the application from an outsourcer and install it on company premises
Use an application system provider (ASP)
Application service provider (ASP)
A company that provides business applications to users, for a small monthly fee—go online to use the equipment and software that resides with the ASP

23. Development Options for EC Applications (cont.)
Other development options
E-marketplaces, exchanges, auctions, or reverse auctions
Joint ventures and consortia
Internet malls
ISPs
Telecommunications companies
Software houses

24. Criteria for Selecting a Development Approach
Flexibility
Information requirements
User friendliness
Hardware and software resources
Installation
Maintenance services
Vendor quality and track record
Estimating costs
Measuring benefits
Personnel
Technology evolution
Scaling
Sizing
Performance
Reliability
Security

25. Third-Party EC Components and Suites
Electronic catalogs
Virtual-world equivalent of traditional product catalog, containing product descriptions and photos, along with information about various promotions, discounts, payment methods, and methods of delivery
Merchant server software
Electronic catalog

26. Third-Party EC Components and Suites (cont.)
Features of electronic catalogs
Templates or wizards for creating a storefront and catalog pages
Electronic shopping carts
Web-based order forms for making secure purchases
A database for maintaining product descriptions, pricing, and customer orders
Integration with third-party software for calculating taxes and shipping costs and for handling distribution and fulfillment

27. Third-Party EC Components and Suites (cont.)
EC suite—combined set of tools giving builder and users:
Greater flexibility
Specialization
Customization
Integration
Support for complete functionality

28. EC Suites Internetworld Commerce Suite Websphere Commerce Suite
Channel marketing
Order management
Account management
Customer service
Websphere Commerce Suite
Order management
Collaborative filters
Portal capabilities
Multicultural support
E-coupons
Additional bundled products
Catalog manager
Payment manager

29. Connecting to Databases and Other Enterprise Systems
Multi-tiered application architecture
EC architecture consisting of four tiers
Web browser—data presented to and collected from the user
Web server—delivers Web pages
Application server—executes business rules
Database server—data is stored, managed, and requests processed

30. Connecting to Databases and Other Enterprise Systems (cont.)
Enterprise application integration
Aims to integrate applications (including internal applications) that have been developed by different organizations
If source code is unavailable (altering the application is not possible), EAI becomes the glue between the applications

31. Vendor and Software Selection
Steps in selecting software package
Identification potential vendors
Determination the evaluation criteria
Evaluate vendors and packages
Choose a vendor and package
Negotiate a contract
Establish service level agreement

32. Vendor and Software Selection (cont.)
Identification potential vendors; eliminate:
Too small vendors
Vendors with questionable reputations
Packages without required features
Packages that don’t fit with hardware, operating system, network, etc.

33. Vendor and Software Selection (cont.)
Determination the evaluation criteria
Characteristics of the vendor
Functional requirements of the system
Technical requirements the software must satisfy
Amount and quality of documentation provided
Vendor support of the package

34. Vendor and Software Selection (cont.)
Evaluate vendors and packages determine the gaps between
Company’s needs as specified by the requirements
Capabilities of the vendors and their application packages

35. Vendor and Software Selection (cont.)
Choose a vendor and package
Additional development effort required to tailor the system to the company’s needs or to integrate it into the company’s environment
Opinions of users and IT personnel who will have to use and support the system

36. Vendor and Software Selection (cont.)
Negotiate a contract
Specify price of software
Determines the type and amount of support to be provided by the vendor
Use software purchasing specialists who assist in negotiations and write or approve the contract

37. Vendor and Software Selection (cont.)
Establish service level agreement
Formal agreements regarding the division of work between a company and its vendors
Define the partners’ responsibilities
Provide framework for designing support services
Allow company to retain as much control as possible over their own systems

38. Usage Analysis and Site Management
Access log
A record kept by a Web server of every time a user accesses the server; kept in a common log file format, each line of this text file details an individual access
Pageviews by time bucket
Pageviews by customer logging-in status
Pageviews by referrer
Pageviews by visitor’s hardware platform, OS, browser and/or browser version
Pageviews by visitor’s host

39. Site Management and Usage Analysis (cont.)
E-commerce management tools from BMC Corp. at bmc.com
Patrol for e-business management
Measures Web response time
Firewall administration
Application servers:
Patrol for Microsoft
Open market
Netscape

40. Managerial Issues What is our business perspective?
Do we have a systematic development plan?
Insource or outsource?
How should we choose a vendor/software?
Have we analyzed the data?

41. Summary Discuss the major steps in developing an EC application
Describe the major EC applications and list their major functionalities
List the major EC application development options along with their benefits and limitations
Describe various EC application outsourcing options
Discuss the major components of an electronic catalog and EC application suite

42. Summary (cont.)
Describe various methods for connecting an EC application to backend systems and databases
Describe the criteria used in selecting an outsourcing vendor and package
Understand the value and uses of EC application log files
Discuss the importance and difficulties of EC application maintenance