Management of Information Systems 45 -870 Mini-3 Spring

Management of Information Systems: 45 -870 Mini-3 Spring 2000 Thursday, February 10, 2000 1

Agenda n n n Announcements Return of IT Exercise #2 Fundamentals of E-Commerce Applications of E-Commerce (Video) IT Diagnosis Case Assignment #1: Sonoco Thursday, February 10, 2000 2

Fundamentals of E-Commerce n n n What is “e-commerce” Categories of E-commerce applications E-Commerce Technologies Economic model for e-commerce Approaches to assure secure electronic transactions Thursday, February 10, 2000 3

What is E-commerce? n n online process of developing, marketing, selling, delivering, servicing, paying for products & services using Internet technologies Includes: n n Interactive marketing, ordering, payment process on the www Extranet access of inventory databases by customers & suppliers Internet access of customer records by sales reps & customer service Involvement in product development via Internet newsgroups and e-mail exchanges Thursday, February 10, 2000 4

Categories of E-commerce Applications n n n Business to Consumer Business to Business Internal Business Processes Thursday, February 10, 2000 5

Business to Consumer E-Commerce n n Imperative: develop attractive electronic marketplaces to entice and sell products and services to customers How? n n Thursday, February 10, 2000 virtual storefronts virtual shopping malls interactive order processing secure electronic payment 6

How can businesses get customers to come back to their web site? Performance and Service Personalization Socialization Thursday, February 10, 2000 Look and Feel Factors Affecting Retailing on the Web Incentives Security and Reliability 7

Example: amazon. com Thursday, February 10, 2000 8

Business to Business E-Commerce n n Supply Chain Management Electronic Data Interchange Thursday, February 10, 2000 9

Supply Chain Management Supplier Management Inventory Management Distribution Management Channel Management Components of Supply Chain Management (SCM) Payment Management Financial Management Sales Force Management Thursday, February 10, 2000 10

What ITs are used in SCM? n n n n E-mail Electronic Business Forms Bulletin Board Systems Electronic Funds Transfer Web product catalogues Interactive order processing Electronic Data Interchange Thursday, February 10, 2000 11

Example: Marshall Industries n See www. ims. avnet. com/welcome. shtml Thursday, February 10, 2000 12

Examples: UPS, Fedex n See: n n Thursday, February 10, 2000 www. ups. com www. fedex. com 13

Electronic Data Interchange n Electronic exchange of business transaction documents over computer networks between trading partners (manufacturers, customers, suppliers) Thursday, February 10, 2000 14

Features of EDI n n EDI Software converts company’s own document formats into standardized EDI formats Data transmitted over network links directly between computers Use of third-party services Eliminates printing, mailing, checking, handling of multiple business documents Thursday, February 10, 2000 15

An Example: Singapore Tradenet System Singapore Thursday, February 10, 2000 16

E-Commerce Technologies Secure Messaging Application Services Brokerage and Data Management Interface Services Thursday, February 10, 2000 EC Technology Services Middleware Services Network Infrastructure 17

Economic Model for E-Commerce Barriers to Entry are Low Market Niches Abound Revenue Sources are Many No One Owns the Market Key Characteristics of the Economic Model for Electronic Commerce on the Internet Thursday, February 10, 2000 The Same Technology is Available to Everyone Access is Becoming Universal There is Room for Teams of Successful Players 18

Business Value of E-Commerce 35% Cost Savings 2% Other Thursday, February 10, 2000 13% Marketing 32% Customer Service 18% Revenue Generation 19

Security for E-Commerce Secure Socket Layer (SSL) Micropayments Systems Offline Method Thursday, February 10, 2000 Examples of Electronic Commerce Security Methods Digital Wallet Secure Electronic Transaction (SET) 20

Applications of E-Commerce n n n In-Class Exercise Video How are businesses using the Web? How can the Internet improve a company’s customer relationships and service? Are there any differences in how online-only (e. g. , “virtual”) companies use the Internet vs. existing (“brick & mortar”) companies? Why? Thursday, February 10, 2000 21

IT Diagnosis: Assessing Opportunities for E-Commerce n IT Diagnosis n n n Thursday, February 10, 2000 Describes how IS activities (input, processing, output, storage, control) are accomplished Describes how use of resources (people, hardware, network, software) support the conversion of data resources into information products Answers the question: “what resources are required to accomplish the activities that can produce the information products needed by end users? ” 22

IT Diagnosis: The IS Component Matrix Hardware Software People Data IS Activities and Resources Information Products Input Processing Output Storage Control Thursday, February 10, 2000 23

IS Component Matrix: Key Definitions n Information Systems Activities n n n Input Processing Output Storage Control Information Systems Resources n n n Thursday, February 10, 2000 People Procedures Data Software Hardware 24

Use of the IS Component Matrix: An Example Thursday, February 10, 2000 25

Case Analysis #1: Sonoco IT Diagnosis n Read the Sonoco Case (pp. A 8 -A 13) Also check: www. datamation. com n Thursday, February 10, 2000 26

Case Analysis #1: Sonoco IT Diagnosis n Write a short report to briefly address these questions: n Create an IS component matrix to: n n Using your IS component matrix: n n n document the IS activities and resources in Sonoco’s order fulfillment and other information systems identify some opportunities for e-commerce for Sonoco based upon their IS activities describe how Sonoco should adapt or extend its IS resources to realize these opportunities Describe the role of IT in Sonoco: n n n Thursday, February 10, 2000 in the late 1980’s and early 1990’s in the new business strategies in an e-commerce marketplace 27