Transcript presentation1

COMP3241
E-Commerce Technologies
Richard Henson
September 2014
Week 1: On-line Trading Processes
and underpinning Technologies

Objectives:
 Clarify confusion about concepts of e-business and ecommerce
 Explain the basic processes required for a business
transaction to take place
 Translate a business transaction into its on-line
equivalent processes
 Identify the technologies required to do business online
 Produce a web page to sell a product online
E-commerce and E-business

E-commerce: using digital technologies to sell
products online
 B2B: supply chain
 B2C: direct to consumer
E-commerce and E-business

E-business: using digital technologies
for a much broader range of purposes:
 putting business information selectively on the
web
 engaging selectively with information systems of
partner organisations
 e-marketing
 managing customer relationships online
Focussing on E-commerce…
For many businesses, the first stage
towards e-business is to be able to
trade online
 Main task: develop an e-commerce
website…

Purpose: to create the illusion of a faceface transaction VIA A COMPUTER
SCREEN!!!
Focusing on E-commerce
Becomes:
vendor
customer
www
& digital
device
Breaking Down a
Business Transaction

In a nutshell:
1.
2.
3.
Buyer selects goods or service
Buyer and seller agree a price
Buyer makes payment
Business Transactions – why
use technology?

Historically, circumstances in which
transactions not agreed face to face
 if people were unable to/didn’t want to meet
 used third party…

Technology provided the “third party”
 e.g.: the telephone:
 further advantage: “face-face” transactions
possible over any distance
Business and
Use of Technology

Interesting study in itself…
advances in transportation 100 years ago
enabled face-face transactions to occur
over long distances
» e.g. train - England-Scotland
» e.g. boat – England – anywhere…
Telex enabled documents to be sent
remotely through telephone system
Fast Forward…
The Digital Revolution


Objective: develop a virtual equivalent of face-face
interaction
Early 1990s business information:





stored digitally
processed by digital computer
screen dialogue between vendor & buyer… evolved
could be achieved across the network
Late 1990s
 HTML: new mechanism for screen dialogue
 www: provided infrastructure for vendor and buyer to be
anywhere in the world
 needed to find a way for money to change hands…
Modelling business transactions onto
a computer network…

Need:
 effective behind-the-screens processing
 effective on-line data input-output through
interactive screens – designed to be appropriate
for all users
 rapid-response on-line database support

Challenge for early e-commerce
developers…
 made unprecedented use of technology
 few “crystal ball gazers” expected this…
 literally “changed the world”
Early computerized
business processes
B2B communications mostly paperbased
 Electronic Information systems for
INTERNAL use only
 Electronic -> paper and vice versa for
communications between businesses
 OBVIOUSLY wasteful…

Discussion (in small Groups)

What are the business processes
needed for a company to purchase
goods and services?
e.g. stationary etc. for staff and printers
Activities involved in B2B
e-commerce (1)

The business develops, builds, nurtures a
good working relationship with its suppliers
 initially face-face, not online

Trusted suppliers provide secure access to
parts of their information systems/Intranets to
all for checking for product availability, etc.
Supplier
Business
Activities involved in B2B
e-commerce (2)

In return, the business provides secure
access to parts of its information
systems/Intranet to trusted suppliers

business
Suppliers
can send invoices supplier
The business can make payments…

Discussion (in small groups)

Why would businesses allow other
organisations access to their networks?
Basics of Web-based on-line
Transactions
(applies to B2B and B2C)

Web-compliant IT processes required for:
1. buyer finds goods/services, and compares
between vendors
2. buyer chooses product/service
3. vendor gives buyer an invoice
4. Vendor/buyer agree method of payment
5. once payment has been authorised, product or
service is supplied
B2C E-commerce (www selling
direct to the customer)


Business markets products via website and
the Internet
Business communicates information relating
to ordering and payment electronically directly
to the customer via secure Internet line
Secure Internet
link
E-Business - seller
Consumer - buyer
The challenges of
online trading…

Degree of challenge will depend on the size of the
business and current level of IT use…
 Most larger companies (>250 employees) will certainly have
a sophisticated IT setup developed over many years…
 “others” (known as SMEs) may not even have a specialist IT
person amongst their staff
» SME = Small & Medium Sized Enterprise


most now “microbusiness” (<10 employees)
Level and sophistication of IT use by an SME will
depend on the type of business and “enterprise” of
their senior mgt & board…
Issues for SMEs wishing to
trade on-line

HUGE range of take up of IT
 many businesses were computerised in the 80s and
early 90s – but that’s as far as they went…
» unless updated, system not compatible with the www
» surveys show that at least 30% of UK SMEs keep internal
information systems separate from www
 30% don’t even have websites
 some may even now still be paper-based!
First stop….SYSTEMS
ANALYSIS
 need to systematically establish and agree what
the existing processes are!!!
 Start-up businesses will need to
» either develop their own business processes… the hard bit!
» or choose a “best guess” of other businesses processes that
have been engineered into a off the shelf e-commerce system
Where to start with an
e-commerce system?

Ask an expert?
 do the analysis yourself…

Of particular interest:
 to business start ups
 if creating an e-commerce system for an
independent study…

A mistake to start with the technology (e.g.
“lets use the cloud”)
SMEs and Systems Analysis

Larger businesses have effective ecommerce and e-business systems
otherwise would be out of business…

Existing SMEs or new businesses…
may not be familiar with close analysis of
their business processes
may be initially reluctant to disclose
information…
Discussion (in small Groups)

Why are SMEs more likely to keep their
business processes to themselves?
“Existing Systems”

A business MUST have a system
 systems don’t always work as expected…
 Important to learn from “mistakes”
 makes sense to establish strengths/weaknesses
and failures of existing system before making
changes

Any system should be reviewed regularly…
 make use of “reviews” when developing a new
system…
B2C: the consumer end of the
Internet revolution!

From 1996, SMEs could conduct business
directly with consumers online (B2C)
 impossible before this date
» consumers simply didn’t possess the technology
» infrastructure didn’t support it

Technology that makes B2C possible had been
building for at least 10 years
 UK rather late to wake up to implications
 by contrast, US had built e-commerce into its
constitution in 1998…
Activities EXPECTED
by B2C consumers

Business has a website, available worldwide
24/7, via the Internet
 provides information about products/services
 gives customers options to buy its products
 collects information about its customers

Website has a built-in system that includes:
 on-line ordering
 on-line payment via credit card/switch, etc.
 payment in a range of currencies
 automatic handling of taxation issues
Issues for Businesses thinking
of on-line trading

Considerable issues and initial costs
involved
why bother?
» will there be a sufficient ROI?
useful to conduct a risk analysis – starting
by looking at how different parts of the
business will be affected when making
such a bold change…
Group Exercise on
SME Issues
One student: SME boss
 Group members as questions about
pretend business

pull out on-line trading issues
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One student makes a note of issues
discussed…
Other Issues for SMEs




May lack computer expertise (especially if
mostly paper-based at the moment)
May be concerned about exposing their
information to the world
On-line payment systems may be perceived
as inherently not secure
May not think it is worth the expense!
 would the reduction in transaction costs be enough
to justify their technology investment

May be also worried about… ?
Big Q for SME: How much of
existing system to use?

Saves time and effort if existing digital
data can be reused…
 demoralising for employees to have to key
in the same information a second time!

If system is paper-based…
 data will have to be inputted
» but there will ALWAYS be a system…
 existing processes need to be understood,
not just rejected
Existing system “paper-based”

No data to integrate…

Risk analysis likely to suggest:
 just carrying on with existing paper-based system
 going to the first stage of on-line trading by:
» receiving orders via email
» printing out such orders and processing them through the
existing paper-based system
» ask business to think about a digital information system…

Once web site starts bringing in orders, they
are unlikely to be “just thinking” for long…
If existing system paperbased? (continued)

SME still needs a web site
 to display products
 to provide an email address for orders
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

Still need email to receive orders
Still need web hosting and website
management
Still need to advertise web presence
If existing information system is
computerised, but not www
compatible

Three choices:
 1. keep the new web-based operation separate
from any existing internal computerised system?
 2. integrate internal information system with new
web-based operation
» straight away
» later (risk analysis may suggest this…)

In each case, website will be much more
sophisticated than the simple products list &
email address that may be acceptable to a
previously paper-based SME!
SME chooses keep www system
& Internal system separate…
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

Web based system completely new
Existing computerised information system
remains as it is, separate from the Internet!
But… the systems need to communicate…
 EITHER print out and re-key
» retrograde step?
» labour intensive and expensive?
 OR develop a computerised interface
» major software project?
» very expensive but ultimately saves on labour costs (ROI)
3rd Option:
Integrated Int & Ext Systems

Not a light undertaking…
develop new www-based link to the Internet
provide a www-based user interface
(Intranet)
re-engineer the internal computerised system
into www format
Full Integration of information
systems with e-commerce?

Advantages:
 should be inexpensive to run (ROI)
 reduces/minimises unit cost per transaction (ROI)

Disadvantages:
 may be expensive/time consuming to implement
 Could compromise security of internal systems
 will be disruptive to staff in the short term
BREAK…
(20 minutes)
Scope of this module
Not about “off the shelf” e-commerce
 Seeks to integrate relevant business
data [from an existing system] with a
web-based e-commerce system

a MUCH more complex undertaking!!!

Even so, security issues are not covered
in depth
if you want to cover this as well, try
COMP3221 next semester…
From now on,
it gets Technical!!!

Prior knowledge requirements:
 relational databases
 HTML, and VB/Java scripting
 basics of client-server networks

Covered only as revision and knowledge
equivalent to the following will be assumed:
 Web Design COMP1141 pref COMP2221
 Database COMP1112 pref. COMP2001

Programming and scripting experience, e.g.
COMP1131 or 1132 will also be very useful…
What makes up the Internet?
900 million Server computers!
Internet Servers
Very powerful
 Managed 24 hours a day
 Secure operating system, MUST BE
properly configured …

breed of UNIX (e.g. LINUX)
Windows Server (2000?/2003/2008)

Should therefore be impossible for
such persons to access private data
Security of Internet Servers

Depends on management and
configuration…
are there enough trustworthy UNIX and
Windows Server experts
to manage all access to the 900 million
computers properly (?)
to protect the servers (and their data)
against hackers/cyberterrorists, etc. (?)
Essential Technologies
underpinning B2C E-commerce


Internet and www infrastructure (governed by
International bodies)
Web Server software
 Web Site hosting systems that will support static
and dynamic web pages
 Interaction with managed data storage

Web Browser software
 Environment for HTML, CSS, programming scripts
that give the user their browsing experience

Hardware in server & client computers to
make connection to the Internet possible….
Essential Technologies
underpinning B2C E-commerce



Database – Web Server connectivity
software
Database Management System & system
for recording and retrieving customer
information
System for recording customer behaviour
whilst browsing website
 controversial – cookies outlawed by French
government as an infringement of privacy!
Internet Protocols

Networks are very complex, and so is the
software (protocols) used to manage them!

A simplified model of network protocols
regards communication as taking place
through 4 software layers (actually 7):
 Application layer - FTP, HTTP, SMTP, POP3
 Transport or Host-Host layer - TCP
 Internet layer - IP
 Physical Network access layer
Application Layer Internet
Protocols and the WWW



The application layer give the Internet its
functionality
The www makes use of HTTP (hypertext
transfer protocol)
Other important application layer protocols:
 FTP (file transfer protocol)
» to upload/download files between user computer and a remote
computer via the Internet
 SMTP (Simple Mail Transfer Protocol)
» Used for sending email messages through the Internet
Web Server
Software
 Runs on a Unix or Windows server

stores web pages
makes web pages available to remote
computers using either HTTP or other
application layer protocols
exercises control over who accesses those
web pages, and who can edit/delete them
runs scripts and provides database
interaction
Web Browser

Software
translates HTML code into a visual screen
output
executes programs written in given
programming languages e.g.
» JavaScript
» VBScript
» “run-time” code (ActiveX)
interacts with web server using the HTTP
(or FTP) protocol using other 6 layers...
How a Static Web Page
gets displayed

First of all, the
relevant HTML
document must be
retrieved:
 user types the URL
into a one-line text
window in browser
 Browser passes
the text to the
remote web server
(via default Internet
gateway)
How a Static Web Page gets
displayed (2)

Web server locates
the file for that web
page in its own
storage folders

File containing
HTML etc code
copied back to
default gateway and
routed to the IP
address of the local
computer
How a Static Web Page gets
displayed (3)

File suffix checked
by browser…

If .htm or .html suffix:
 HTML etc. code is
read & processed by
local CPU using a
program called an
interpreter
 Results of processing
passed to graphics
card CPU
How a Static Web Page gets
displayed (4)

results of conversion
converted into binary
display signals by the
CPU and graphics
card

Signals transmitted
to screen and the
converted HTML
data is displayed
Client-side scripting &
dynamic Web Pages

Berners-Lee’s original intention for the HTML model
was to use text, links, and graphics
 soon became even more sophisticated:
» embedded JavaScript, VBScript, or code from other languages
» HTML forms allowed interaction with databases
» templates and Cascading Style Sheets provide scope for a huge range
of formatting options

Now possible to display virtually anything
 very wide range of multimedia and special effects
available…
 Relational databases allow query and retrieval of complex
data structures
Server-Side Scripts
& Dynamic Web pages

This time…
 programming code sent to and runs at the web
server end…
 creates a web page for the client end with a table
to display the data

If the data picked up from the server has
been changed (e.g. by use of SQL query)…
 the client display is changed
 web pages become “dynamic”
» i.e. readily changeable without changing the web page code

Effect:
 by triggering SQL commands on the server, local
web page appears to interact with a database
All of these skills will be
explored in this module over
the coming weeks

Practical for this week:
 static web pages in the Visual Studio environment…

Then… (fun bit!) creating something dynamic
with embedded scripting 
 see you next week, and we’ll start taking this a little
further…?