Transcript Management Information Systems

Chapter 7
E-Commerce: The Internet,
Intranets, and Extranets
Management Information Systems, 3rd Edition
Effy Oz
1
Learning Objectives
• When you finish this chapter, you will
– Explain what the Internet is.
– List the features for information exchange that can
be conducted over the World Wide Web.
– Explain how the Web facilitates electronic
commerce.
– Explain basic business models on the Web.
– Describe the major risks and limitations of using
the Web for business activities.
Management Information Systems, 3rd Edition
Effy Oz
2
What is the Internet?
• The Development of the Internet
• ARPANET was an open system designed for the
free flow of information, but available only to
members of academic institutions and some in
the defense industry.
• U.S. government decided to split the network
into a civilian one and a military one.
– Civilian network became the Internet
• Internet is now a network of networks.
Management Information Systems, 3rd Edition
Effy Oz
3
What is the Internet?
Figure 7.1 The Internet connects millions of servers.
Management Information Systems, 3rd Edition
Effy Oz
4
What is the Internet?
• Growth of the Internet
– Physically, a network of communications media
• Millions of computers are connected to it
• Major line of communication is called the backbone.
• A network of copper lines, optical fibers, and radio satellites
– The backbone is owned, augmented, and maintained by
telecommunications companies and Internet service
providers such as:
• Verizon, Sprint, AOL, etc.
Management Information Systems, 3rd Edition
Effy Oz
5
What is the Internet?
Management Information Systems, 3rd Edition
Effy Oz
6
What is the Internet?
Management Information Systems, 3rd Edition
Effy Oz
7
Internet Domains
• Domain Names
– Unique name assigned to IP number
• IP number: Every machine on the Internet backbone
is uniquely identified with a numerical label.
– Domain names are registered by one of a group
of companies authorized to assign unique
names.
• These companies must use the same central database
(maintained by Network Solutions, Inc.) to make
certain each name is unique.
Management Information Systems, 3rd Edition
Effy Oz
8
Internet Domains
Management Information Systems, 3rd Edition
Effy Oz
9
Internet Domains
• Static and Dynamic IP Numbers
– Static IP number
• Permanent IP number assigned to Servers and many
other computers and devices.
– Dynamic IP number
• Intermittent connection to the Internet will be
assigned a temporary IP number for duration of its
connection only.
Management Information Systems, 3rd Edition
Effy Oz
10
Internet Domains
• What’s on the Internet?
– E-mail and File Transfer
• File Transfer Protocol (FTP)
– News Groups
• Post information on servers than can then be accessed by
others sharing same interests.
– Internet Relay Chat (IRC)
• Real-time online interactivity
• Also called instant messaging
– Internet Telephoning
• Conducting long-distance and international conversations via
Internet connections
Management Information Systems, 3rd Edition
Effy Oz
11
The World Wide Web
• Hypertext transfer protocol (HTTP)
– Determines how data in files (text, images,
animation, or sound) should be coded,
transferred, and viewed on the Internet.
• Browsers
– Special software designed to search the Web for
specific sites and retrieve information (text,
pictures, sound, and animation.)
Management Information Systems, 3rd Edition
Effy Oz
12
The World Wide Web
• Web Software
– Hypertext Mark-Up Language (HTML)
• Code for tagging Web files for display
– Web page editors
• Translate well-known or intuitive commands into code
– Java, JavaScript, ActiveX
• Web scripting languages
– XML (Extensible Markup Language)
• A programming language that tags data elements in order to
indicate what the data mean.
Management Information Systems, 3rd Edition
Effy Oz
13
The World Wide Web
• Common Gateway Interfaces (CGI)
– Software that lets users interact with servers.
• Virtual Reality Modeling Language
(VRML)
– Standard for describing interactive threedimensional scenes delivered across the
Internet.
Management Information Systems, 3rd Edition
Effy Oz
14
The World Wide Web
Figure 7.6 How a CGI works
Management Information Systems, 3rd Edition
Effy Oz
15
The World Wide Web
– Cookies
• Small file a Web site places on a visitor’s hard disk so
the site can remember something about the surfer
later
– Creating Your Own Web Pages
• Search the Web for HTML tutorials
• View and study the source document of a Web page
Management Information Systems, 3rd Edition
Effy Oz
16
Intranets and Extranets
– Intranet
• A within-organization computer network that
uses Internet technologies to communicate
– Extranet
• Uses Internet technologies to facilitate
communication and trade between an
organization and its business partners, such
as suppliers
Management Information Systems, 3rd Edition
Effy Oz
17
Intranets and Extranets
Figure 7.7 An
intranet, an
extranet, and the
Internet from an
individual user’s
perspective
Management Information Systems, 3rd Edition
Effy Oz
18
Intranets and Extranets
Figure 7.8 Internet, intranet, and extranet potential for productivity
enhancement
Management Information Systems, 3rd Edition
Effy Oz
19
Establishing an E-Commerce Web Site
• Businesses have several options when
establishing a Web site
– Install own server
• Dedicated Server
– Contract an ISP site
– Contract a Web portal
• Portal is a site that enjoys heavy traffic and often offers
a search engine and general information
– www.yahoo.com; www.lycos.com; www.msn.com, etc.
Management Information Systems, 3rd Edition
Effy Oz
20
Establishing an E-Commerce Web Site
• Options (continued)
– Establish an electronic storefront
• Virtual shopping mall on the Web
– Contract with a Web hosting service
– Use a virtual Web server
• Domain name points to server of another company
– Set up a subdomain
Management Information Systems, 3rd Edition
Effy Oz
21
Establishing an E-Commerce Web
Site
Management Information Systems, 3rd Edition
Effy Oz
22
Establishing an E-Commerce Web Site
Management Information Systems, 3rd Edition
Effy Oz
23
E-Commerce Practices on the Internet
• Business-to-Business Trading
– Electronic Data Interchange (EDI)
• Exchange of business information via computer networks.
– Exchanges and Auctions
• Exchange: Buyer may negotiate price with seller and negotiation is
not done through public bidding
• Auctions: bidders compete for what is offered with higher and
higher bids until a deadline.
– Online Business Alliances
• Companies operating in the same industry with a purpose of setting
prices for purchased products and services for the whole group.
– Application Service Providers (ASP)
• Rental of software
Management Information Systems, 3rd Edition
Effy Oz
24
E-Commerce Practices on the Internet
• Business-to-Consumer Trading
– Advertising
• Traffic volume
• Portals
Management Information Systems, 3rd Edition
Effy Oz
25
E-Commerce Practices on the
Internet
Management Information Systems, 3rd Edition
Effy Oz
26
E-Commerce Practices on the Internet
• Business-to-Consumer Trading
– E-Retailing
• Convenience
• Time saving
• Comparative shopping
Management Information Systems, 3rd Edition
Effy Oz
27
E-Commerce Practices on the Internet
Figure 7.14 Web-shopping benefits
Management Information Systems, 3rd Edition
Effy Oz
28
E-Commerce Practices on the Internet
• Business-to-Consumer Trading
(continued)
– Auctions and Reverse Auctions
– Software Sales
– Stock Trading
Management Information Systems, 3rd Edition
Effy Oz
29
E-Commerce Practices on the Internet
• E-Government
– Government-to-citizen transactions
– Government-to-government transactions
– Government-to-business transactions
• Web Demographics
– People who have access to the Internet represent
less than one-tenth of the world’s population (6.1
billion).
• Internet is still not a truly universal communications
tool
Management Information Systems, 3rd Edition
Effy Oz
30
E-Commerce Practices on the
Internet
Management Information Systems, 3rd Edition
Effy Oz
31
E-Commerce Practices on the Internet
Figure 7.16
Do’s and
Don’ts in
Web site
construction
for
commercial
purposes
Management Information Systems, 3rd Edition
Effy Oz
32
E-Commerce Practices on the Internet
• Rules for Successful Online Business
Transactions
–
–
–
–
–
–
Target the Right Customers
Own the Customer’s Total Experience
Personalize the Service
Shorten the Business Cycle
Let Customer’s Help Themselves
Be Proactive
Management Information Systems, 3rd Edition
Effy Oz
33
E-Commerce Practices on the Internet
• Successful Business Models
– Among the most successful we find the
following types.
• Niche retailing
• Sellers of hard-to-obtain information
• Click-and-mortar retailing
Management Information Systems, 3rd Edition
Effy Oz
34
E-Commerce Practices on the Internet
• M-Commerce (Mobile commerce)
– Mobile devices need to use a special protocol to
enable conversion of HTML (XML and other
Web standards) into formats to display on
mobile devices
– Wireless Access Protocol – most common
– Privacy Issue
• Commercial organizations can track you as long as
your mobile device is on.
Management Information Systems, 3rd Edition
Effy Oz
35
Ethical and Societal Issues:
Online Free Speech
• Objectionable Materials
– Adult-oriented material, defamatory and violent content
– Controversy over what may or may not be communicated through the
Internet has much to do with culture and law.
– How do operators of a Web site please the legal system of their
worldwide audiences
• Anti Domains
– Domain secured by people who wish to voice dissatisfaction with
a commercial or political organization.
• Spamming
– Flooding a party’s e-mail box with messages as a means of
protest is disruptive.
Management Information Systems, 3rd Edition
Effy Oz
36