Electronic Commerce

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Electronic Commerce
MIS 6453 -- Fall 2004

• eCommerce and its Infrastructure

Instructor John Seydel, Ph.D.
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Student Objectives

• Define eCommerce and eBusiness
• Compare and contrast the first and second waves
  of ecommerce\
• Discuss the role of eCommerce, along with
  advantages, disadvantages, and challenges
• Discuss the global nature of eCommerce
• Understand the basic network concepts that enable
  the Internet
• Describe what happens when a web page is
  delivered to a browser
• Discuss the contents of a typical HTML document
• Become more familiar with FrontPage

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eCommerce Foundations

• Definitions, categories, etc.
• Evolution of eCommerce
• Doing business on the Web
• Planning for success
• International aspects

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Electronic Commerce

• Electronic Commerce (eCommerce)
• Businesses trading via the Internet, eMail, EDI,
  etc. with other consumers and with other business
  entities
• Electronic Business (eBusiness)
• Term used interchangeably with e-commerce
• The transformation of key business processes
  through the use of Internet technologies

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Electronic Commerce Categories
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Elements of Electronic Commerce
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Online Sales in B2C and B2B
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eCommerce First Wave

• Dominant influence of U.S. businesses
• Extensive use of the English language
• Low bandwidth data transmission technologies
• Unstructured use of email
• Over reliance on advertising as a revenue source

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eCommerce Second Wave

• Future of electronic commerce will be
  international in scope
• Language translation and handling currency
  conversion problem will need to be solved
• eMail will be used as an integral part of
  marketing and customer contact strategies

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Business Models, Revenue Models, and Business
Processes

• Business model a set of processes that combine
  to yield a profit
• Revenue model used to
• Identify customers
• Market to those customers
• Generate sales to those customers
• Business processes can determine whether or not
  ecommerce venture will be viable

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A Quick Look at Business Processes

• Merchandising combination of store design,
  layout, and product display knowledge
• Sales of commodity items
• Hard to distinguish from the same products or
  services provided by other sellers
• Features have become standardized and well known
• Shipping
• Profile collection of attributes that affect how
  easily a product can be packaged and delivered
• High value-to-weight ratio can make overall
  shipping cost a small fraction of the

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Advantages of eCommerce

• Can increase sales and decrease costs
• If advertising is done well on the Web, it can
  get a firms promotional message out to potential
  customers in every country
• Using ecommerce sales support and order-taking
  processes, a business can
• Reduce costs of handling sales inquiries
• Provide price quotes
• Increases purchasing opportunities for buyer
• Negotiating price and delivery terms is easier
• The following cost less to issue and arrive
  securely and quickly
• Electronic payments of tax refunds
• Public retirement
• Welfare support

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Disadvantages of eCommerce

• Perishable (e.g., grocery) products are much
  harder to sell online
• Difficult to
• Calculate return-on-investment
• Integrate existing databases and
  transaction-processing software into software
  that enables ecommerce
• Cultural and legal obstacles also exist

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The Role of eCommerce

• Expand exposure of businesses to potential
  consumers (including other businesses)
• Facilitate commerce between businesses and
  consumers (including other businesses
• Reduce transaction costs by
• Improving flow of information
• Increasing coordination of actions
• Capitalize on network effects
• Law of diminishing returns most activities yield
  less value as the amount of consumption increases
• Network effects
• As more people or organizations participate in a
  network
• Value of network to each participant increases
• Other . . . ?

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Value Chain for a Strategic Business Unit
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Industry Value Chain for a Wooden Chair
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SWOT Analysis Questions
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Results of Dells SWOT Analysis
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International Nature of eCommerce

• Companies with established reputations
• Often create trust by ensuring that customers
  know who they are
• Can rely on their established brand names to
  create trust on the Web
• Customers inherent lack of trust in strangers
  on the Web is logical and to be expected
• Key global issues that must be addressed
• Language
• Culture
• Infrastructure

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Language Culture Issues

• Language
• To do business effectively in another culture, a
  business must adapt to that culture
• Researchers have found that customers are more
  likely to buy products and services from Web
  sites in their own language
• Localization translation that considers multiple
  elements of local environment
• Culture
• Important element of business trust -- anticipate
  how the other party to a transaction will act in
  specific circumstances
• Culture
• Combination of language and customs
• Varies across national boundaries
• Varies across regions within nations

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Infrastructure Issues

• Internet infrastructure includes
• Computers and software connected to Internet
• Communications networks over which message
  packets travel
• Organization for Economic Cooperation and
  Development (OECD)
• Statements on information and communications
  policy
• Deals with telecommunications infrastructure
  development issues
• Flat-rate access system
• Consumer or business pays one monthly fee for
  unlimited telephone line usage
• Contributed to rapid rise of U.S. electronic
  commerce
• Targets for technological solutions paperwork
  and processes that accompany international
  transactions

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Typical International Trade Transaction
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Recall the Recurrent Themes of the eCommerce
Literature

• Business is business
• The rules have changed
• Guidelines for ecommerce sites
• Tools available for ecommerce
• Consider
• ATM
• Mail order
• Information replaces inventory
• Product enhancement through service and
  information
• Evolution (adjustment, maturing, concentration)
• Move to b2b
• Traditional firms move online

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A Closer Look at Infrastructure Aspects

• Networking concepts
• How web pages work
• Languages for the Web
• Markup basics

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Packet-Switched Networks

• Local area network (LAN) network of computers
  located close together
• Wide area networks (WANs) networks of computers
  connected over greater distances
• Circuit combination of telephone lines and
  closed switches that connect them to each other
• Circuit switching centrally controlled,
  single-connection model
• Packets
• Files and e-mail messages on a packet-switched
  network that are broken down into small pieces
• Travel from computer to computer along the
  interconnected networks until they reach their
  destinations
• Routing packets
• Routing computers computers that decide how
  best to forward packets
• Routing algorithms
• Rules contained in programs on router computers
  that determine the best path on which to send
  packet
• Programs apply their routing algorithms to
  information they have stored in routing tables

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Router-based Architecture of the Internet
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Internet Protocols

• Protocol collection of rules for formatting,
  ordering, and error-checking data sent across a
  network
• Rules contributing to success of Internet
• Independent networks should not require any
  internal changes to be connected to the network
• Packets that do not arrive at their destinations
  must be retransmitted from their source network
• Router computers act as receive-and-forward
  devices
• No global control exists over the network
• TCP/IP
• TCP
• Controls disassembly of a message or a file into
  packets before transmission over Internet
• Controls reassembly of packets into their
  original formats when they reach their
  destinations
• IP specifies addressing details for each packet

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IP Addressing

• Internet Protocol version 4 (IPv4) uses a 32-bit
  number to identify computers connected to the
  Internet
• Internet Protocol version 6 (IPv6)
• Protocol that will replace IPv4
• Uses a 128-bit number for addresses
• Domain names
• Sets of words assigned to specific IP addresses
• Top-level domain (or TLD) rightmost part of a
  domain name
• Internet Corporation for Assigned Names and
  Numbers (ICANN) responsible for managing domain
  names and coordinating them with IP address
  registrars

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Top-Level Domain Names
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Lets Dissect a URL

• Consider
• http//clt.astate.edu80/jseydel/mis6453/ho6453
  .htmtext
• Includes
• Protocol (assumed to be HTTP)
• Host computer name (www?)
• TLD
• Port (assumed to 80)
• Folder names
• Filename.filetype (unless default)
• Target within document

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Browser/Server Interaction
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Three Tiered Internet Database Access Architecture
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Input / Processing / Output
(Program code VB, Java, . . . )
Input (data)
Output
Process/Program
Browser/orServer
XHTML file (text)
Web page(s)
Rich includes programming, markup, pointers to
files, . . .
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Collection of Computer Languages

• Programming languages
• Standalone
• Procedural
• Traditional (e.g., COBOL)
• Object-oriented (e.g., Java)
• Nonprocedural (e.g., SQL)
• Scripting languages (rely on other components)
• JavaScript
• VBScript
• Others (e.g., Perl)
• Markup languages (e.g., XHTML)
• Stylesheet languages (e.g., CSS, XSL)
• Database languages (e.g., SQL)

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An Overview of Markup Languages
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XML Processing
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Standard XHTML Document

• lthtmlgt
• ltheadgt
• lttitlegt . . . title goes here . . . lt/titlegt
• . . . scripts, style rules, meta elements, etc.
  . . .
• lt/headgt
• ltbodygt
• . . . this is where content and markup goes . .
  .
• lt/bodygt
• lt/htmlgt

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An Overview of XHTML Elements

• A web document is a collection of XHTML elements
• Note that XHTML is essentially HTML
• XML compliant
• Reformulation of HTML, but with stricter rules
• Two types of elements
• Standard
• Empty
• Each element
• Has
• Opening tag and closing tag is standard
• Self closing tag if otherwise
• May have attributes specified
• Also XHTML entities

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XML Syntax for Standard Elements

• Either
• lttag attr1xxx attr2yyy attr3zzz . . . gt
• . . . content . . .
• lt/taggt
• Or
• lttag
• attr1xxx
• attr2yyy
• attr3zzz
• . . .
• gt
• . . . content . . .
• lt/taggt
• Why the difference?
• More readable code (for us, not the computer)

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Examples of Standard Elements

• Paragraphs, headings, divisions
• Hyperlinks
• Lists
• Tables
• Forms
• Objects
• Display markup

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Syntax for Empty Elements

• Either
• lttag attr1xxx attr2yyy attr3zzz . . .
  /gt
• Or
• lttag
• attr1xxx
• attr2yyy
• attr3zzz
• . . .
• /gt
• Notice no content attributes provide full
  specification

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Examples of Empty Elements

• Images and embedded objects
• Form input controls (e.g., text boxes)
• Breaks, horizontal rules, etc.
• Meta tags

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Some Important XHTML Body Elements

• Hyperlinks ltagt
• Objects
• ltimg /gt
• ltobjectgt, or ltembedgt
• Lists ltulgt, ltligt
• Tables lttablegt, lttrgt, lttdgt
• Text blocks ltpgt, ltdivgt
• Display ltfontgt, ltigt or ltemgt, ltbgt or ltstronggt,
  ltcentergt
• Forms ltformgt, ltinputgt, ltselectgt, ltoption /gt
• Style rules ltstylegt
• Miscellaneous ltbr /gt, lthr /gt

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Referencing Other Files

• Where?
• Hyperlinks
• Images (inline or background)
• Objects (e.g., Flash movies)
• And other places also, but beyond our scope
• Absolute referencing resources on another
  server
• Relative referencing
• Preferred
• Need to specify relative to calling document
• In same folder
• In higher level folder
• In lower level folder
• In sibling folder

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Yet to Come . . .

• More on infrastructure
• Types of networks
• Connection options
• Internet2 and other futuristic concepts
• Business models for the Web
• But now, a FrontPage exercise . . .

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Some More FrontPage Work

• A new website HRU Realty
• Will be continuing project
• Starting today with just the home page

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Overview of the Project

• Tour of the site
• A schematic view

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Another View of the Site
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Get Started

• Open FrontPage to your website on the AITP server
  (File Open Web)
• Set view to navigation view
• Create a new folder (File New Folder) named
  HRU
• Create a new page in the HRU folder
• Click on HRU folder in Folder List
• File New Page Blank Page
• Name it default.asp

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Starting the HRU Home Page

• From navigation view, double click on default.asp
• Refer to MIS 6453 website Handouts page (HRU
  basic version)
• Create header
• Select Heading 1 from Style box
• Type first line of heading (HRU Realty of
  Arkansas)
• Enter line break (Shift-Enter) and then second
  text line
• Insert image (Insert Picture From File)
• Enter line break and then navigation bar text
• At end of line press Enter
• Format the header text
• Select entire header and click on center button
• Select second text line, reduce font size,
  italicize
• Select navigation bar text, reduce font size
• Save your work (now and frequently as you proceed)

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Completing the Header

• Edit image
• Right-click on image
• Select Picture Properties
• Enter text for alt attribute
• Click on Appearance tab
• Set border thickness to 0 pixels
• Check box for Specify Size and then click OK
• Add links (relative) to the navigation bar
• For each item create a hyperlink
• Select link text
• Click on Hyperlink button on top tool bar
• Type file name or navigate to name of linked
  filet
• Click OK

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Specifying Page Properties

• Right-click anywhere on the page
• Select Page Properties
• Background image
• Click on the Background tab
• Check the Background Image box and the Watermark
  box
• Browse to the cnvbkgnd.gif file in the images
  folder
• Page title
• Click on the General tab
• Enter title in appropriate box
• Default font color
• Click on the General tab
• Click on the Style button, then Format, and Font
• Select Maroon and then click OK (twice)
• Click on OK

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Proceeding with the Rest of the Page

• Create second level heading
• Click on Heading 2 in Style box
• Type text for second level heading and press
  Enter
• Create bullet lists
• Outer (main) list
• Click on Bullets button
• Type the 3 main categories (e.g., Rentals), each
  followed by pressing Enter
• Backspace on last bullet (no text)
• Inner list
• Put cursor at end of first category
• Press Enter
• Click twice on Increase Indent button
• Type text for subcategories, each followed by
  pressing Enter

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Adding the Footer

• Skip the page counter for now
• Go to end of document (press Ctrl-End)
• Click on Insert in menu bar
• Select Horizontal Line
• Type both lines of text, separated by line break
  (Shift-Enter)
• Select name (should be yours) and click on Bold
  button on tool bar
• Select phone number and click on Bold button

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On Your Own

• Complete whatever hasnt been done yet
• Go a bit further
• Create dummy pages to serve as targets
• Create the Services page

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Summary of Objectives

• Define eCommerce and eBusiness
• Compare and contrast the first and second waves
  of ecommerce\
• Discuss the role of eCommerce, along with
  advantages, disadvantages, and challenges
• Discuss the global nature of eCommerce
• Understand the basic network concepts that enable
  the Internet
• Describe what happens when a web page is
  delivered to a browser
• Discuss the contents of a typical HTML document
• Become more familiar with FrontPage

57
Appendix
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Getting Files Onto the Web

• Start FrontPage
• Open web (not file)
• File Open Web
• URL is http//aitp.astate.edu/username
• Enter login info
• Enter username, first initial plus last name
  (e.g., sstudent)
• Enter password (last 3 digits of student number
  plus last initial)
• Drag drop
• Select files/folders in Windows Explorer
• Drag (or copy) to folder in FrontPage
• Example web address for this course
• http//aitp.astate.edu/sstudent