Information System & IT AUDIT

1. Information System & IT AUDIT Lecture

2. E-commerceArchitecture Lecture

3. Client Server Architecture • E-commerce is based on client/ server architecture • Client processes requesting service from server processes • First used in 1980s, the model improves to be e-commerce usability • In e-commerce the client is defined as the requestor of a service and a server is the provider of the service • Browser is the client and the customer, the computer that sends the HTML files is the server • The server can also be a computer program that provides services to other computer programs • A web server is the computer program that serves requested HTML pages or files. • Uses client/server model and http(hypertext transfer protocol) • Every computer on the internet that contains a web site must have a web server program.

4. Client Server Architecture • Most popular web servers are Deerfield’s WebSite and Microsoft’s Internet Information Server (IIS) • Web servers are included as part of a larger package of internet and intranet related programs for serving e-mail, downloading requests for FTP files and building and publishing web pages. • Typically the e-commerce customer is the client and the business is the server. • In the client/ server model single machine can be both client and the server • The client/ server model utilises a database server in which RDBMS user queries can be answered directly by the server

5. Client Server Architecture • The client/ server architecture reduces network traffic by providing a query response to the user rather than transferring total files. • The client/ server model improves multi-user updating through a graphical user interface (GUI) front end to the shared database. • In client/ server architectures client and server typically communicate through statements made in structured query language (SQL).

6. Two-Tier Architectures • The user system interface is usually located in the user’s desktop environment and the DBM services are usually in a server that is a more powerful machine that services many clients. Client Server User Interface (Business Rules) (Business Rules) Data Access

7. Two-Tier Architectures • It runs the client processes separately from the server processes, usually on a different computer: • The client processes provide an interface for the customer, and gather and present data usually on the customer’s computer. This part of the application is the presentation layer • The server processes provide an interface with the data store of the business. This part of the application is the data layer • The business logic that validates data, monitors security and permissions, and performs other business rules can be housed on either the client or the server, or split between the two. • Fundamental units of work required to complete the business process • Business rules can be automated by an application program.

8. Two-Tier Architectures • Typically used in e-commerce • Internet retrieval, desicion support • Used in distributed computing when there are fewer than 100 people simultaneously interacting on a LAN. • lacks of flexibility in moving program functionality from one server to another.

9. Three-Tier Architectures • Also called as multi-tier architecture • A middle tier is added between the client environment and the DBM server environment • Variety of ways to implement: • Transaction processing (TP) monitors • Message servers • Application servers Database server Web client Web server

10. Three-Tier Architectures with TP Monitor • The most basic type • Type of message queuing, transaction scheduling, prioritisation service • Client connects to TP instead of the DB server • The transaction is accepted by the monitor which queues it and takes responsibility to complete it by freeing up the client • When a third part provides this service it is called TP heavy • When it is embeded in the DBMS, it can be considered 2-tier

11. Three-Tier Architectures with TP Monitor • TP monitor provides: • The ability to update multiple DBMSs in a single transaction • Connctivity to a variety of data sources (flat files & non-RDBMSs) • The ability to attach priorities to transactions • Strong security • More scalable than a 2-tier architecture • Most suitable for e-commerce with many thousands of users

12. Three-Tier Architectures with Message Server • Messages are prioritised and processed asynchronously • Headers contain priority info, the address, the id no • Message server connects to the RDBMS and other data sources • The message server focuses on intelligent messages, whereas the TP environment has the intelligence in the monitor and treats transactions as dumb data packets • They are sound business solutions for the wireless infrastructures of m-commerce.

13. Three-Tier Architectures with an Application Server • Allocates the main body of an application to run on a shared host rather than in the user system interface client environment • The application server does not drive GUIs rather it shares business logic, computations, and a data retrieval engine. • With less software on the client • There is less concern with security, • Applications are more scalable • Support and installation costs are less on a single server than maintaining each on a desktop client.

14. Three-Tier Architectures with an Object Request Broker Standard • Need for improving interoperability and object request broker (ORB) standards in the client/ server model. • ORB support in a network of clients and servers on different computers means • A client program (object) can request services from a server program • Object without having to understand where the server is in a distributed network or what the interface to the server program looks like • ORB is the programming that acts as the mediary or as a broker between a client request for a service from a distributed object or component and server completion of that request.

15. Distributed Enterprise Architecture • Based on ORB technology • Uses shared, reusable business models on a business enterprise-wide scale. • Standardised business object models and distributed object computing are combined to give greater flexibility to the business • With the emergence and popularity of Enterprise Resource Planning (ERP) software, distributed enterprise architecture promises to enable e-commerce to extend business processes at the enterprise level.

16. The Relationship Between E-commerce and Web Database Constructions • E-commerce is dynamic and constantly evolving, supported by technologies that are constantly changing • Database storage is the oldest technology and currently used by e-commerce • Business can implement • New sales and marketing channels • Customer support • Exchange of documents with other businesses • Transact over the internet using web interfaces to interact with back-end relational databases

17. A Simple E-commerce Web Database Construction Model Client Desktop Web Browser HTTP URL Web Server Software Web Server Helper HTML formatted HTML Data (e.g. HTML table) Middleware Database Front-end Back-end

18. Risks in E-commerce Business What are the risks? • Failure of the web site • problems with the surroundings, power failure, fire or flooding • failure of the hardware • failure of the software • attack through virus or computer hacker

19. Risks in E-commerce Business Sabotage or Defacement: All the business transactions and deals going on through online methods, you being a businessman can also face the problem of attacks. There are different malicious attacks like – virus, worms and Trojan horse, that your system can be a pray to. You should always have a good anti-virus and keep it updated to impede any such kinds of attacks.

20. Risks in E-commerce Business Unauthorized access: While you may not be aware of and trust your employees the best, you might never know who accesses your data and account illegally. Unauthorized access to your data can also be done by outsiders. Poor configuration of systems and poor encrypted transmission are few factors that can let others access your confidential business data illegally. You must also be careful to choose strong passwords. In most cases you can form your own question. Do that wherever applicable; and if not try choosing your hint questions in a way that will not let anyone guess it or know it.

21. Risks in E-commerce Business Degradation of performance: Machines make our life easier, and technology makes it luxurious. But even technology is bounded by certain barriers. Busy network, with heavy traffic is a common problem. Hardware and software can also cause you troubles at any time; yes, might also be when you are on a major transaction. Your processor speed and data storage might also pose as a problem for degradation of your system’s performance.

22. Controls to such crisis: Legal:- You must refuge(shelter) to audit and assistance to alleviate(lighten) any company risks regarding the financial matters. Hiring efficient employees:- Your human resource management need to be expert in choosing good business analysts, system administrator, programmers, database administrator, testers and system designers.

23. Technology: As you choose the e-commerce way to do business, you must be updated with all the new technology and software that are coming into the market. You need to adopt those for the best results to derive out of your business, besides helping it stay away from any sorts of malicious attacks, and virus attacks. Good anti-virus and turning on firewalls will diminish the chances of getting your systems attacked. You must also regularly install new updates that are available for your computers. Spywares and malwares are also important to keep your systems safe.

24. Advantages of Ecommerce • Faster buying/selling procedure, as well as easy to find products. • More reach to customers, there is no theoretical geographic limitations. • Low operational costs and better quality of services. • No need of physical company set-ups. • Easy to start and manage a business. • Customers can easily select products from different providers without moving around physically. • Easier to compare prices • Access to Stores Located Remotely • No Standing in Queues

25. Disadvantages of Ecommerce • Any one, good or bad, can easily start a business. And there are many bad sites which eat up customers’ money. • There is no guarantee of product quality. • Mechanical failures can cause unpredictable effects on the total processes. • As there is minimum chance of direct customer to company interactions, customer loyalty is always on a check. • There are many hackers who look for opportunities, and thus an ecommerce site, service, payment gateways, all are always prone to attack.

26. Supply Chain Management • A supply chain is the system of organizations, people, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform raw materials and components into a finished product that is delivered to the end customer.

27. Supply Chain Supplier Manufacturer Distributor Retailer Customers

28. A Supply Chain Example… Fsd Makro TNB Matro Pb Defence Coke KPk Isdd. Liver br End customer Johnsno Sindh Pepsi Balochistab Tier 1 suppliers Province distributors Local stores Super market chains

29. Supply Chain Management Supply Chain Management is the design and management of processes across organizational boundaries with the goal of matching supply and demand in the most cost effective way.

30. Supply Chain Management (SCM) with respect to IS • Managing flow of information through supply chain in order to attain the level of synchronization that will make it more responsive to customer needs while lowering costs • Keys to effective SCM • information • communication • cooperation • trust

31. Information Technology: A Supply Chain Enabler • Information links all aspects of supply chain • E-business • replacement of physical business processes with electronic ones • Electronic data interchange (EDI) • a computer-to-computer exchange of business documents • Bar code and point-of-sale • data creates an instantaneous computer record of a sale • Radio frequency identification (RFID) • technology can send product data from an item to a reader via radio waves • Internet • allows companies to communicate with suppliers, customers, shippers and other businesses around the world, instantaneously

32. E-business and Supply Chain • Cost savings and price reductions • Reduction or elimination of the role of intermediaries • Shortening supply chain response and transaction times • Gaining a wider presence and increased visibility for companies • Greater choices and more information for customers

33. SCM Software • Enterprise Resource Planning (ERP) • software that integrates components of a company by sharing and organizing information and data • SAP was first ERP software • mySAP.com • web enabled modules that allow collaboration between companies along the supply chain

34. Software Packages ARIBA Spend Management: It helps companies driving down enterprise wide spend mySAP SCM: A complete supply chain planning solution iBann: A complete solution suite from demand collaboration to order management

35. Results • Reduced inventory levels by 10-15% • Reduced markdown & scrap by 10-15% Companies that utilized best-in-class SCM solutions have • Used resources10-20% more efficiently • Improved delivery reliability by 95-95% • Reduced outage to 0-5% • Reduced cycle time by 10-20% • Reduced transportation cost by 10-15%

36. Customer Relationship Management (CRM)

37. What is CRM? • CRM “is a business strategy that aims to understand, anticipate and manage the needs of an organisation’s current and potential customers” • It is a “comprehensive approach which provides seamless integration of every area of business that touches the customer- namely marketing, sales, customer services and field support through the integration of people, process and technology” • CRM is a shift from traditional marketing as it focuses on the preservation of customers in addition to the gaining of new customers • “The expression Customer Relationship Management (CRM) is becoming standard terminology, replacing what is widely perceived to be a misleadingly narrow term, relationship marketing (RM)” .

38. Definition of CRM “CRM is concerned with the creation, development and enhancement of individualised customer relationships with carefully targeted customers and customer groups resulting in maximizing their total customer life-time value”.

39. The purpose of CRM • “The focus [of CRM] is on creating value for the customer and the company over the longer term”. • When customers value the customer service that they receive from suppliers, they are less likely to look to alternative suppliers for their needs. • CRM enables organisations to gain ‘competitive advantage’ over competitors that supply similar products or services

40. Information Technology and CRM • Technology plays a pivotal role in CRM . • Technological approaches involving the use of databases, data mining and one-to-one marketing can assist organisations to increase customer value and their own profitability • This type of technology can be used to keep a record of customers names and contact details in addition to their history of buying products or using services • This information can be used to target customers in a personalised way and offer them services to meet their specific needs • This personalised communication provides value for the customer and increases customers loyalty to the provider

41. Information Technology and CRM: Examples • Here are examples of how technology can be used to create personalised services to increase loyalty in customers: • Phone calls, emails, mobile phone text messages, or Wireless Access point (WAP) services • Having access to customers contact details and their service or purchase preferences through databases etc can enable organisations to alert customers to new, similar or alternative services or products • - Illustration: When tickets are purchased online via Lastminute.com, the website retains the customers details and their purchase history. The website regularly send emails to previous customers to inform them of similar upcoming events or special discounts. This helps to ensure that customers will continue to purchase tickets from Lastminute.com in the future.

42. Benefits of CRM • Benefits of CRM include (8): • reduced costs, because the right things are being done (ie., effective and efficient operation) • increased customer satisfaction, because they are getting exactly what they want (ie. meeting and exceeding expectations) • ensuring that the focus of the organisation is external • growth in numbers of customers • maximisation of opportunities (eg. increased services, referral etc.) • increased access to a source of market and competitor information • highlighting poor operational processes • long term profitability and maintainablility.

43. ERP( Enterprise Resource Planning) • ERP software integrates all departments and functions onto a single system that can serve the needs of the entire company. • Some of ERP’s functions include: • Bookkeeping & Accounting • Human Resource Management • Planning Production • Supply-Chain Management • Customer Relationship Management • Coordinate planning, inventory control, production and ordering

44. How we can use ERP • Update our legacy systems. • Cut down on inter-office paperwork. • To standardize our manufacturing processes and increase productivity. • Will give us more information and better access to our suppliers and customers.

45. Implementation Steps for implementation: • Cost analysis • Blueprinting of Business Processes • Staff Training • Integration • Data Conversion • Going live with ERP