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Electronic Commerce History

Business Systems: Electronic Commerce, Transaction Processing Systems (TPS), Management Information Systems (MIS), Enterprise Resource Planning (ERP), Decision Support System (DSS), Group Decision Support System (GDSS), Executive Support System (ESS/EIS) Chapter 5 and 6.

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Electronic Commerce History

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  1. Business Systems:Electronic Commerce, Transaction Processing Systems (TPS), Management Information Systems (MIS), Enterprise Resource Planning (ERP), Decision Support System (DSS), Group Decision Support System (GDSS), Executive Support System (ESS/EIS)Chapter 5 and 6

  2. Electronic Commerce History • Began in the early 1970s • innovations such as electronic transfer of funds (EFT) • were limited to large corporations and a few daring small businesses • Electronic Data Interchange (EDI) • added other kinds of transaction processing and extended the types of participating companies • ANSI X.12 standardized in 1983 • EDIFACT standardized in 1986-87 • Over the last five years • innovative applications, from advertisement to auctions and procurement • fueled by the internet

  3. Types of Electronic Commerce • Business-to-consumer EC (B2C) • companies sell directly to consumers over the Internet • Business-to-business EC (B2B) • two (or more) businesses make transactions electronically • More than $7.3 trillion volume by 2004 • 15x volume of B2C • Mostly done by EDI – 95% of EC is EDI! • Consumer-to-consumer (C2C) • E.g. E-bay, Classifieds • Government-to-citizens (G2C) and to others • Doing taxes online etc. • Mobile commerce (m-commerce) • Wireless commerce. E.g. Using cell phone to pay for gas

  4. Supply Chain Management

  5. Value Chains in E-Commerce • Conversion to e-commerce supply chain management provides businesses with an opportunity to: • increase revenues or decrease costs by eliminating time-consuming and labor-intensive steps throughout the order and delivery process • improve customer satisfaction by enabling customers to view detailed information about delivery dates and order status • reduce inventory including raw materials, safety stocks, and finished goods

  6. Product and Information Flow for HP Printers Ordered Over the Web

  7. E-Commerce Applications • Retail and Wholesale • Cybermall • Electronic exchange • Manufacturing • Marketing • Investment and Finance • On-line Stock Trading • On-line Banking

  8. Electronic Retailing • Solo storefronts • Examples: walmart.com, buy.com • Can use services like http://store.yahoo.com • Cybermalls • Stores give up some freedom to be part of the mall • Some solo stores expand to become malls • Amazon.com, Buy.com • Some malls are more like intelligent agents for comparing prices (pricegrabber.com) • Companies can both be in a mall and a solo storefront

  9. Issues in E-tailing • Channel conflict • Lego.com: Keeping consumers and retailers happy (very small percent of revenue from online sales) • Order fulfillment • Shipping small quantities to many customers. How to handle returns?

  10. B2B E-commerce • Sell-side marketspaces • One company trying to sell its goods to many companies • Customized catalogs, auctions • Buy-Side marketspaces / E-procurement • One large buyer, many smaller suppliers • Examples: Supermarket chains, Ford, Boeing • Alternative: Group procurement (e.g. shop2gether.com) • Electronic Exchanges • Many sellers and many buyers

  11. An Electronic Exchange

  12. Key Technical Components • Catalog Management • Product Configuration • Shopping Cart • E-commerce Transaction Processing • Web Site Data Analysis • Decision: Develop or outsource? • Electronic Payment Systems • Credit cards, smart cards • Digital certificate • Electronic cash • Electronic wallet • P2P payment (PayPal) • Linux • Unix • Windows • Apache Web server • Oracle • Web construction • PC • Mainframe • Mid-range

  13. Transaction Processing Information Systems • What is a transaction? • Grocerystore purchase, airline ticket reservation, deposit money to an account. • Something is exchanged (money, goods, ...) • What data is collected? • What transactions did you take part in yesterday? • Transaction Processing • major business processes • provide the mission-critical activities • transaction may generate additional transaction • Transaction Processing System (TPS) • computerized information system • supports the transaction processes • Critical to the well-being of the organization!!

  14. Characteristics of TPS • Large amounts of data are processed • The TPS processes information on a regular basis • High level of detail in data • Low complexity of calculations • Systems must be very reliable • Large storage (database) capacity is required • Need lots of processing speed due to the high volume • Input and output data are structured • Need high level of accuracy, data integrity, and security • Must allow for queries of data

  15. Transaction Processing Overview

  16. Transaction Processing Systems • Batch Processing System • Transactions are accumulated over time and processed in a single group • On-line Transaction Processing (OLTP) • Each transaction is processed immediately • Examples? • Does anyone use a batch processing system? • Know of one? • Heard of one?

  17. TPS, MIS/DSS, and AI/ES

  18. Transaction Processing Activities • Data Collection • Source data automation makes it easier • Data Editing • Check for validity and completeness • Data Correction • Re-enter invalid data • Data Manipulation • Simple calculations • Data Storage • Update databases • Document Production • Business documents and Reports

  19. Example: Point-of-Sale System

  20. Order Processing Systems Systems that process order entry, sales configuration, shipment planning, shipment execution, inventory control, invoicing, customer interaction, and routing and scheduling

  21. Integration of TPSs

  22. Management Information Systems • Provide routine information to managers in the functional areas • Provide information in exception reports and ad hoc (demand) reports • Terminology • Originally: ’MIS’ used for everything having to do with IT and IS • Today: ’MIS’ used for this type of system (except in a few universities!) • MIS gets input from TPS

  23. Management Information System

  24. Sources of Managerial Information

  25. Enterprise Resource Planning (ERP) • Provide real-time monitoring of business functions • Permits timely analysis of issues such as quality, availability, customer satisfaction, performance, and profitability. • Combines TPS and MIS (among other things) • Advantages • Elimination of costly, inflexible legacy systems • Improvement of work processes • Increase in access to data for operational decision making • Upgrade of technology infrastructure • Disadvantages • Expense and Time in Implementation • Difficulty Implementing Change • Difficulty Integrating with Other Systems • Risks in Using One Vendor

  26. Decision Support Systems • Support for Problem-Solving Phases • Different Decision Frequencies • One-time: ad hoc DSS • Repetitive: Institutional DSS • Different Problem Structures • Highly structued vs. Semi or unstructured • Support for Various Decision-Making Levels • Operational, tactical, strategic

  27. Decision Making Level

  28. Book, p. 238

  29. Model of a DSS • Financial Models • Statistical Analysis Models • Graphical Models • Project Management Models

  30. Group Decision Support System • Software application that consists of most elements in a DSS, plus software needed to provide effective support in a group decision making Special design Ease of use Flexibility Decision-making support Anonymous input Reduction of negative group behavior Parallel communication Automated record keeping

  31. GDSS Configuration

  32. GDSS Alternatives

  33. Executive Support System • Tailored to individual executives • Easy to use • Drill down capabilities • Support need for external data • Can help when uncertainty is high • Future-oriented • Linked to value-added processes • Support for • defining an overall vision • strategic planning • strategic organizing and staffing • strategic control • crisis management

  34. Next Week • Thanksgiving • December 4 • Lecture • Chapter 8 • Group Presentations • Team 4, 5 and 6

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