EC 101

1. EC 101 Fundamentals of Electronic Commerce Note: You may look up acronyms and abbreviations used in this class at http://www.eidx.org/publications/abbrev/

2. Reminder Before we begin, please… • Turn pagers to vibrate • Set cell phones to a silent setting • If you get a call, please leave the room to take it Thank you!

3. Course Objectives • Introduction • What is e-business • Evolution of e-business applications • What is EDI • Web publishing • Inter-Enterprise integration (B2B) • E-Business Technologies • E-Business Standards

4. Intro: Media Adoption in US Connected users in US Source: IDC

5. Intro: Internet Adoption orldwide Connected users world wide 320 M 230 M 175 M 140 M 110 M Source: IDC

6. Partners in the Supply Chain • Infrastructure: -Movement of Data • Solution Providers • Exchanges and Marketplaces Electronics Distributor Materials Distributor Channel Assembler Basic Supply Chain End Consumer OEM Component Supplier Reseller Raw Material Supplier • Infrastructure - Movement of Products and Money • Logistics Providers • Warehouses • Financial Institutions • Service Providers, Repair Centers • Customs Software Provider Contract Manufacturer

7. eBusiness - The process of doing business electronically.  While "electronic commerce" describes the world of B2B commercial transactions, the term "eBusiness" usually refers to a broader scope of electronically-enabled activities, including B2C and B2P activities.  An eBusiness relationship with a partner implies tighter coupling that enable the building of virtual enterprises. What is E-business

8. Gateway Gateway Partner A Back-End Partner B Back-End Micro – Implementable Chunk (e.g. EIDX Component Business Model, PIP™, OAG BOD) Lots of “micro” business processes (historically) Private Process Private Process Public Process Macro – Business Process Scenario Public and Private Processes

9. Evolution of E-business communications 1- EDI (Electronic Data Interchange) Chronologically the 1st type of e-business communication 2- Information Sharing and simple commerce 3- Business process integration

10. Evolution of E-business communications 1- EDI (Electronic Data Interchange) Chronologically the 1st type of e-business communication 2- Information Sharing and simple commerce 3- Business process integration

11. 1- EDI History EDI (Electronic Data Interchange) transaction exchange - Initiated by the transportation industry in the 1960s (around 1964): Chronologically the 1st type of e-business communication Facilitates the exchange of commerce data via private Value Added Networks (VANs) Common documents are Purchase Orders and Invoices. Common challenges are the initial cost to implement and ongoing VAN charges

12. Electronic Data Interchange (EDI) TRANSACTION DATA COMPANY A COMPANY B EDI is the computer-to-computer exchange of routine business documents (data) in a standard format between companies.

13. Basic EDI Transaction Flow Request for Quote (840/REQOTE) You Your Customer Response to RFQ (843/QUOTES) Purchasing Sales Purchase Order (850/ORDERS) Order Entry P.O. Acknowledgment (855/ORDRSP) Purchase Order Change (860/ORDCHG) P.O. Change Acknowledgment (865/ORDRSP) Invoice (810/INVOIC)/Advance Ship Notice (856/DESADV) Receiving Shipping Receiving Advice (861/RECADV) Payment Order/Remittance Advice (820/PAYORD) Financial Financial Electronic Funds Transfer

14. Buyer Seller Value Added Network (VAN) U.S. Post Office A VAN is a ”Post Office” for EDI data exchange between trading partners.

15. Trading Partner EDI Trading partners are companies that do business via EDI.

16. PO Transaction Set EDI Purchase Order (PO) Purchaser Business information in standard syntax. Consists of a transaction set header segment, one or more data segments in a specified order, and a transaction set trailer segment. Complete business transaction.

17. EDI Document Structure Date: Purchase Order # 12/31/92 4001 PURCHASE ORDER Vendor: Ship To: ABC Supplies P.O. Box 180 Baltimore, MD 21239 Concurrent Technologies Corporation 1450 Scalp Ave Johnstown, PA 15904 Quantity Description Price Amount Legal Pads LP8X11 $8.00/DZ $16.00 2 ST*850*0001^ BEG*00*NE*4001**921231^ N1*VN*ABC Supplies^ N3*P.O.Box 180^ N4*Baltimore*MD*21239^ N1*ST*Concurrent Technologies Corporation^ N3*1450 Scalp Ave^ N4*Johnstown*PA*15904^ PO1*1*2*DZ*8.00**VP*LP8X11^ CTT*1^ SE*11*0001

18. EDI Standards ANSI X12 ELECTRONIC DATAINTERCHANGE STANDARDS • UN/EDIFACT

19. EDI Components Hardware Standards EDI Software Communications Self-study: Read more at http://www.eidx.org/publications/techinfo/techopt1.html

20. Evolution of E-business communications 1- EDI (Electronic Data Interchange) Chronologically the 1st type of e-business communication 2- Information Sharing and simple commerce 3- Business process integration

21. 2- Information Sharing and simple commerce • A. Web-based Marketing and Support • - An information distribution tool • - Increased market penetration • - Easy global reach • - Not secure • - No exchange of commerce data • B. ERP-Web Interfaces • - Secure Internet exchange of commerce transaction data • - Inventory levels, shipping status, goods receipt, purchasing • - Real-time transactions

22. Web Publishing

23. Customer self service

24. Business transactions (B2C)

25. Benefit of B2C • Extend Reach • Better customer services • Reduce transaction cost • Reduce time to market • Competitive edge

26. Evolution of E-business communications 1- EDI (Electronic Data Interchange) Chronologically the 1st type of e-business communication 2- Information Sharing and simple commerce 3- Business process integration

27. 3- Business Process integration • Today, process integration via emerging technologies and business processes allows: • Automated business processes and secure Internet transactions between enterprises • Effective real-time collaboration intensive communication • Examples: Forecasting, inventory, purchase order lifecycle • Quicker information flow and increased inter-enterprise efficiency

28. Service Engineering Credit ERP Production Distribution Billing The World of 1999: the good news Source: M. Hammer, Sapphire, 9, 1999

29. The World of 1999: the bad news The 2000’s will be about breaking down external walls: integrating and redesigning inter-enterprise processes using the Internet Source: M. Hammer, Sapphire, 9, 1999

30. Coordination: The general vision Web site Complete information transparency, synchronicity, and immediacy Source: M. Hammer, Sapphire, 9, 1999

31. Benefits of B2B • Optimize your supply chain • Better customer relationship management • Shorter time to market • Capture information in real time • Increase productivity • Share resources with your partners • Increase shareholders value by reducing cost and improved asset utilization

32. Java XML Technologies TCP/IP HTTP Self-study – see the full picture at http://www.eidx.org/publications/techinfo/tech_icm.html

33. What You Need for Electronic Commerce • Application Interface Software • A Gateway • Communications and Routing SoftwareTransmission Logging Software • Mapping Software • Security Software • Storage/backup Software • Antivirus shield and scanning software • A Value-Added Network or ISP • (all of them do both now) Wait … there’s more!

34. What You Need for Electronic Commerce, cont. • Hardware • Gateway Server • Web Server • Application Server • Data Base Server(s) • Clients • Communications Hardware (modems, routers, LANs, etc.) • Storage System Wait … there’s more!

35. What You Need for Electronic Commerce, cont. • Other software • Web server software • Load balancing software • Caching system • Human resources • Implementation Plans • Capable Trading Partners!

36. What You Need for Electronic Commerce, cont. • And then … • Trading Partner Agreements • An agreed upon method for identifying products • An agreed upon method for identifying parties and locations • Translation maps

37. What is Security? • Prevents someone or something from getting out • Allows someone or something to get in • Raises an alarm if something/someone has intruded or escaped • Guards against espionage or sabotage

38. Security is a P-A-I-N • Privacy: Ensuring that unauthorized parties cannot read the information that is being transmitted. • Authentication:  Ensures the identity of a user or source of a transaction. • Integrity: Ensuring that the message content cannot be changed (intentionally or accidentally) or, if it is changed, that the change will be detected. • Non-repudiation.  Ensures that the sender cannot deny having sent a transaction, and the recipient cannot deny having received the transaction.

39. EIDX eBusiness Process Framework Self Study: See EIDX web site -Clickable Business Models * Historical Priorities * http://www.eidx.org/publications/business_models/

40. XML or proprietary XML or proprietary Interface File Interface File Application Application Buyer’s Web Application Seller’s Web Application Basic Technology Options - User View Dial-up – PTP, VAN or ISP EDI File EDI File EDI w/ XML Wrapper EDI w/ XML Wrapper Internet – PTP, VAN or ISP XML Standard XML Standard Extranet, VPN, or 3rd Party VPN

41. What is XML? • eXtensible Markup Language • Designed to add structure to data-driven web documents • A Meta-language to create markup languages (information about information) • We now have tags that tell you what data you’re getting – you can describe what’s important to you • Ex. <Company Name> Cisco </Company Name>

42. XML: A Brief History • 1996: Dave Hollander & Jon Bosak “invent” XML in a taxicab • Late 1997: XML enters the marketplace via Ariba & Commerce One • 1998: XML v1.0 arrives • 1999: XML Namespace, schemas and standards start to emerge • 2001: XML Digital Signatures + more standards and widespread adoption

43. Mechanics of XML • XML breaks a document into structural components • Labels them using markups • Organizes them into a hierarchy • Goal is to make parsing of data automatic and intuitive

44. What does XML looks like HTML XML <h1> Invoice </h1> <p> From: Joe Black </p> <p> To: A. someone </p> <p> Date: 1 October 99 </p> <p> Amount: $200.00 </p> <p> Tax: 15% </p> <p> Total: $230.00 </p> <Invoice> <From> Joe Black </From> <To> A. someone </To> <Date> 1 October 99 </Date> <Amount> $200.00 </Amount> <tax> 15% </Tax> <Total> $230.00 </Total>

45. HTML vs. XML XML is about Structured Information HTML is about presentation and browsing

46. XML pushed the web our way Source: IBM

47. XML Summary • Pros / Benefits • Easy to interchange documents on the web • Interoperability • Platform independent • User-defined semantics (human/machine readable) • “Smart” data = meaningful • Simple • Scalable – multi-vendor • Extensible • Cons / Drawbacks • Big, bulky messages (data about data = ~10x message size) • Case sensitive tags & data – otherwise, messaging fails or is rejected by partner • Not everyone has the infrastructure to support it yet • Standards are evolving – trying to choose the emerging “winner” is difficult

48. What is RosettaNet? • RosettaNet is a supply chain consortium whose mission is to define standards around industry business processes and to develop real-time XML-based standards to support those processes (data transfer) • Partner, Product & Service Review • Product Information • Order Management • Inventory Management • Marketing Management • Service & Support It is a movement (strategic) AND a process (tactical)

49. RosettaNet Trivia • Rosetta Stone is the key to deciphering and modern understanding of ancient Egyptian hieroglyphics • RosettaNet unlocks the mystery of business-to-business electronic commerce

50. Standards: EDI vs. RosettaNet • EDI Overview • No new development planned – it is what it is (X12 still evolves) • Data-Centric • Regional variations of standard • Hits lots of verticals • People still use it widely – “if it’s not broken, don’t fix it!” • X12/EDIFACT/JEITA technology • EDI Works Today • Has a big install base, as long as you deal with big companies • RosettaNet Overview • New & evolving, solving legacy issues we all otherwise ignore • Process-Centric Standardization • Single Global Standard - target • Emerging Technology = early adoption, but target is 100% of high tech supply chain + some verticals • Addressing new business areas: warranty, returns, draws, etc. • RosettaNet IS Work Today • Goal to eventually hit smaller co’s