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What is Electronic Commerce?
Electronic commerce encompasses the entire online process of developing, marketing, selling, delivering, servicing, and paying for products and services transacted on internetworked, global marketplaces of customers, with the support of a worldwide network of business partners.
Scope of e-Commerce
e-Commerce encompasses entire online process of developing, marketing, selling, delivering, servicing, and paying for products and services transacted on internetworked, global marketplaces of customers, with the support of a worldwide network of business partners.
3 Categories of e-Commerce Business-to-Consumer (B2C)
3 Categories of e-Commerce Business-to-Consumer (B2C) – businesses develop attractive electronic marketplaces to sell products and services to consumers:Provide virtual storefronts & multimedia cataloguesInteractive order processingSecure e-payment systemsOnline customer supportBusiness-to-Business (B2B) – involves both electronic business marketplaces and direct market links between businesses:Secured websites EDI Provide auction and exchange markets for businessesConsumer-to-Consumer (C2C) – includes auction websites and electronic personal advertising:Alternative for B2C or B2BPersonal advertising of products/services to buy or sell by consumers themselves eg. eBay, etc.
Concerns of e-Payments & security
- Near-anonymous electronic nature of transactions between networked computer systems of buyers & sellers, & security issues involved.
- E-Payment process complex because of wide variety of debit & credit alternatives and many parties involved.
- Varieties of e-Payment systems have evolved.
- New payment systems are being developed and tested to meet security and technical challengesof e- Commerce.
- Web Payment – credit card payment processes
- Electronic Funds Transfer (EFT) – use IT to capture & process money/credit transfers between banks and businesses & their customers
- Secure Electronic Payments – security measures eg. encrypting data passing between customer & merchant, encrypting data passing between customer & company authorizing the credit card transaction, and taking sensitive information off-line
- Secure Socket Layer – SSL
- Digital Wallet
- Secure Electronics Transaction
What is B2B e-commerce?
- B2B e-commerce is the wholesale and supply side of the commercial process, where businesses buy, sell, or trade with other businesses.
- All factors for building a successful retail website also apply to wholesale websites for B2B e- commerce.
- Examples of B2B applications are:
- Electronic catalogues systems
- Electronic trading systems such as exchange and auction portals
- Electronic data interchange
- Electronic funds transfers
What is e-Commerce Marketplaces?
- One to Many – sell-side marketplaces host one major supplier who dictates product catalog offerings and prices
- Many to One – buy-side marketplaces attract many suppliers that flock to these exchanges to bid on the business of a major buyer
- Some to Many – distribution marketplaces unite major suppliers who combine their product catalogs to attract a larger audience of buyers
- Many to Some – procurement marketplaces unite major buyers who combine their purchasing catalogs to attract more suppliers and thus more competition and lower prices
- Many to Many – auction marketplaces used by many buyers and sellers that can create a variety of buyers’ or sellers’ auctions to dynamically optimize prices
What is B2B e-Commerce Web Portal?
Websites developed & hosted by third-party companies who serve as infomediaries that bring buyers and sellers together in catalog, exchange, and auction markets.
What is B2B e-Commerce Infomediaries?
- Companies that serve as intermediaries in e- business and e-commerce transactions
- Provide marketplace software products & services to power B2B portals for e-commerce transactions
- Their business values are:
- Ability to make business purchasing decisions faster, simpler, & more cost effective
- Business buyers get one-stop shopping, accurate purchasing info., and impartial advice that they can’t get from the sites hosted by suppliers and distributors
- Businesses can negotiate or bid for better prices from a larger pool of vendors
- Suppliers benefit from easy access to customers from all over the globe
Business case for ‘Clicks and Bricks’ strategy
- Capitalise on any unique strategic capabilities existing in a company’s traditional business operations to support an e-Commerce business.
- Gain strategic benefits of integrating e-commerce into a company’s traditional business eg. sharing of established brands & key business info., and joint buying power and distribution efficiencies.
Other Clicks and Bricks Strategies
Partial e-commerce integration using joint ventures and strategic partnerships Complete separation via the spin-off of an independent e-Commerce company. Doing this may: Gain access to venture capital funding Create an entrepreneurial culture Attract quality management Maintain a high degree of business flexibility Accelerate decision-making
Definition of e-Commerce Channel
Marketing or sales channel created by a company to conduct and manage its chosen e-commerce activities
Structured – situations where the procedures to follow when a decision is needed can be specified in advance Unstructured – decision situations where it is not possible to specify in advance most of the decision procedures to follow Semi structured - decision procedures that can be prespecified, but not enough to lead to a definite recommended decision
- Executive class information delivery and decision support software tools used by lower levels of management and by individuals and teams of business professionals to enhance:
Definition of DSS
- Computer-based IS that provide interactive information to support semi structured business decision-making.
- DSS are:
- Analytical models
- Specialized databases
- Decision maker’s own insights and judgments
- An interactive, computer-based modeling process
Definition of Management Information Systems (MIS)
An information system that produces information products that support many of the day-to-day decision-making needs of managers and business professionals MIS Reporting Alternatives: Periodic Scheduled Reports Exception Reports Demand Reports and Responses Push Reporting
Online Analytical Processing (OLAP) Definition
Enables one to interactively examine & manipulate large amounts of detailed and consolidated data from many perspectives
OLAP Methods & Applications
- Consolidation – aggregation of data
- Drill-down – detail data that comprise consolidated data
- Slice and Dice – ability to look at database from different viewpoints
- Access very large amounts of data to discover patterns, trends, and exception conditions
- Analyse techniques between many types of business elements
- Involve aggregated data
- Compare aggregated data over hierarchical time periods
- Present data in different perspectives
- Involve complex calculations between data elements
- Able to respond quickly to user requests so that managers or analysts can pursue an analytical or decision thought process without being hindered by the system
- What-if Analysis – end user makes changes to variables, or relationships among variables, and observes resulting changes in values of other variables
- Sensitivity Analysis – value of only one variable is changed repeatedly and resulting changes in other variables are observed
- Goal-Seeking – set a target value for a variable and then repeatedly change other variables until target value is achieved
- Optimization – goal is to find optimum value for one or more target variables given certain constraints then one or more other variables are changed repeatedly until the best values for the target variables are discovered
What does Data mining software do?
- Analyzes the vast stores of historical business data that have been prepared for analysis in corporate data warehouses.
- Attempts to discover patterns, trends, and correlations hidden in the data that can help a company improve its business performance.
- May perform regression, decision tree, neural network, cluster detection, or market basket analysis for a business.
- Data mining can highlight buying patterns, reveal customer tendencies, cut redundant costs, or uncover unseen profitable relationships and opportunities.
Definition of Executive Information Systems (EIS)
IS that provide top executives, managers, analysts, and other knowledge workers with immediate & easy access to information about a firm’s key factors that are critical to accomplishing an organization’s strategic objectives.
Features of Executive Information Systems (EIS) Information presented in forms tailored to the preferences of the executives using the system’s
Customizable graphics displays Exception reporting Trend analysis Drill down capability Definition of Enterprise Portals & Decision Support A Web-based interface & integration of MIS, DSS, EIS, and other technologies that gives all intranet users and selected extranet users access to a variety of internal and external business applications and services
Definition of Knowledge Management Systems (KMS)
Use of information technology to help gather, organize, and share business knowledge within an organization.
Definition of KM Portal
Entry to corporate intranets that serve as their knowledge management systems
Definition of Artificial Intelligence (AI) in Business
A field of science and technology based on disciplinessuch as computer science, biology, psychology, linguistics, mathematics, and engineering.
Goal of Artificial Intelligence (AI) in Business
To develop computers that can simulate the ability to think, as well as see, hear, walk, talk, and feel.
Attributes of Intelligent Behavior
- Think and reason
- Use reason to solve problems
- Learn or understand from experience
- Acquire and apply knowledge
- Exhibit creativity and imagination
- Deal with complex or perplexing situations
- Respond quickly and successfully to new situations
- Recognize the relative importance of elements in a situation
- Handle ambiguous, incomplete, or erroneous information
Definition of Expert Systems
A knowledge-based information system that uses its knowledge about a specific, complex application to act as an expert consultant to end users
Expert System Components
- Knowledge base of an ES contains:
- Facts about a specific subject area
- Heuristics (rule of thumb) that express reasoning procedures of an expert on the subject. There are several ways that such knowledge is represented in ES.
An ES software package contains
- Inference engine that processes knowledge related to a specific problem
- User interface program that communicates with end users
- Explanation program to explain reasoning process to the user
- Software tools for developing the ES
Methods of Knowledge Representation
- Case-Based – examples of past performance, occurrences and experiences
- Frame-Based – hierarchy or network of entities consisting of a complex package of data values
- Object-Based – data and the methods or processes that act on those data
- Rule-Based – rules and statements that typically take the form of a premise and a conclusion
Benefits of Expert System
- Faster and more consistent than an expert
- Can have the knowledge of several experts
- Does not get tired or distracted by overwork or stress
- Helps preserve and reproduce the knowledge of experts
Limitation of Expert System
- Limited focus
- Inability to learn
- Maintenance problems
- Developmental costs
Definition of Knowledge Engineer
A professional who works with experts to capture the knowledge they possess
Definition Fuzzy Logic
Method of reasoning that resembles human reasoning since it allows for approximate values and inferences and incomplete or ambiguous data instead of relying only on crisp data
Definition of Neural Networks
Computing systems modeled after the brain’s mesh-like network of interconnected processing elements, called neurons
Definition of Virtual Reality (VR)
Computer-simulated reality that relies on multisensory input/output devices such as a tracking headset with video goggles and stereo earphones, a data glove or jumpsuit with fiber-optic sensors that track your body movements, and a walker that monitors the movement of your feet
Definition of Intelligent Agents
A software surrogate for an end user or a process that fulfills a stated need or activity by using built-in and learned knowledge base to make decisions and accomplish tasks in a way that fulfills the intentions of a user
User Interface Agents
- Interface Tutors – observe user computer operations, correct user mistakes, and provide hints and advice on efficient software use
- Presentation – show information in a variety of forms and media based on user preferences
- Network Navigation – discover paths to information
- Role-Playing – play what-if games and other roles to help users understand information and make better decisions
Information Management Agents
- Search Agents – help users find files and databases, search for desired information, and suggest and find new types of information products, media, and resources
- Information Brokers – provide commercial services to discover and develop information resources that fit the business or personal needs of a user
- Information Filters – receive, find, filter, discard, save, forward, and notify users about products received or desired.