Chapter 5 ECommerce and Transaction Processing Systems

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Chapter 5E-Commerce and Transaction Processing
Systems
Updated 02/26/05
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Objectives

• Introduction to Electronic Commerce
• E-Commerce Applications
• Technology, Infrastructure. And Development
• Transaction Processing Systems
• Enterprise Resource Planning

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E-Commerce and TPS Intro to E-Commerce

• E-Commerce involves any business transaction
  executed electronically between
• Business-to-consumer (B2C)
• Business-to-business (B2B)
• Consumer-to-consumer (C2C)
• Businesses and individuals use e-commerce to
• reduce transaction costs,
• speed the flow of goods and information,
• improve the level of customer service, and
• enable close coordination among manufacturers,
  suppliers, and customers.
• Also enables consumers and companies to gain
  access to worldwide markets.

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E-Commerce and TPS Value Chains in E-Commerce

• Conversion to e-commerce supply chain management
  provides businesses with an opportunity to
• increase revenues or decrease costs by
  eliminating time-consuming and labor-intensive
  steps throughout the order and delivery process
• improve customer satisfaction by enabling
  customers to view detailed information about
  delivery dates and order status
• reduce inventory including raw materials, safety
  stocks, and finished goods

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E-Commerce Applications Retail and Wholesale

• Electronic retailing - the direct sale from
  business to consumer through electronic
  storefronts.
• Catalog and cart models
• Sears, Lowes, Home Depot, Office Depot, etc.
• Cybermall - a single Web site that offers many
  products and services at one Internet location
• AutoNation, Ford, GMC, Honda, etc.

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E-Commerce Applications Manufacturing

• Move supply chain operations onto Internet
• Increase profitability
• Improve customer satisfaction
• Establish non-physical network-based location
• Join competitors and suppliers to
• Buy and sell goods
• Trade market information
• Maintain inventory control
• Approach has greatly speeded the movement of raw
  materials and finished products, reducing
• Inventory that must be maintained.
• Led to a more competitive marketplace.

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E-Commerce Applications Marketing

• Enables firms to gather information about
  customer behavior and preferences
• Data mining
• Customer may/may not provide demographic
  information
• Internet advertisers use data to identify markets
  and target with tailored advertising messages

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E-Commerce Applications Investment and Finance

• On-line stock trading
• On-line banking
• On-line bill paying

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E-Commerce Applications Auctions

• Web-based locations where buyers bid on items for
  sale.
• eBay, Little Beginnings
• Reverse auctions where bidder is NOT the buyer,
  but the product/service provider.
• Priceline.com

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Technology, Infrastructure, and Development Key
E-Commerce Technical Components

• Success complete technology infrastructure
• Components must be chosen and integrated
  carefully to be capable of supporting a large
  volume of transactions with customers, suppliers,
  and other business partners worldwide

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Technology, Infrastructure, and Development
Hardware

• The amount of storage capacity and computing
  power required of the Web server depends on
• the software that must run on the server
• the volume of e-commerce transactions that must
  be processed
• Additional factors affecting system
• Configuration
• Management
• System
• Database

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Technology, Infrastructure, and Development
Software

• Web server software functions
• Security and identification
• Retrieving and sending Web Pages
• Web site tracking
• Web site development
• Web page construction
• E-commerce software
• Catalog software
• Product configuration software
• Electronic shopping cart
• Transaction processing
• Web traffic data analysis

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Technology, Infrastructure, and Development
Electronic Payment Systems

• Key component to e-commerce infrastructure
• Relies on user identification
• Encryption of transactions
• Payment schemes
• Electronic cash money that is computerized,
  stored, and used for e-commerce transactions
• Electronic wallets computer storage that holds
  credit card info, electronic cash, owner ID, and
  address info.
• Credit, charge, debit, and smart cards

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Transaction Processing SystemsDefinition

• An organized collection of people, procedures,
  software, databases, and devices used to process
  completed business transactions.
• Transactions consist of
• Order entry
• Inventory control
• Payroll
• Accounts payable/receivable
• General ledger
• More

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Transaction Processing SystemsMethods

• Batch processing method of computerized
  processing in which business transactions are
  accumulated over a period of time and prepared
  for processing as a single unit

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Transaction Processing SystemsMethods

• On-line transaction processing (OLTP) - method of
  computerized processing in which each transaction
  is processed immediately and the affected records
  are updated

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Transaction Processing Systems Transaction
Processing Activities

• Data collection process of capturing and
  gathering all data necessary to complete
  transactions.
• Data editing process of checking data for
  validity and completeness.
• Data correction process of reentering miskeyed
  or misscanned data that was found during data
  editing.
• Data manipulation process of performing
  calculations and other data transformations
  related to business transaction.
• Data storage process of updating one or more
  databases with new transaction,
• Document production and reports production of
  essential reports on paper or viewable on the
  computer screen.

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Transaction Processing Systems Data Processing
Activities Common in Transaction Processing
Systems
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Transaction Processing Systems Point-of-Sale
Transaction System
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Transaction Processing Systems Business
Resumption Planning

• AKA Disaster Recovery Plan The process of
  anticipating and minimizing the effects of
  disasters.
• Focuses primarily on two issues
• maintaining the integrity of corporate
  information
• keeping key information systems running until
  normal operations can be resumed
• Disaster recovery implementation of the
  business resumption plan

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Enterprise Resource Planning Definition

• A set of integrated programs that is capable of
  managing a companys vital business operations
  for an entire multisite, global organization.

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Enterprise Resource Planning Some ERP Software
Vendors
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Enterprise Resource Planning Commonalities Among
ERP Systems

• Integrate data
• Data entered once, easily accessible by all ERP
  programs
• Each item documented in data dictionary
• Operate in Client/Server Environment
• Applications run on multilevel client/server
  architecture consisting of
• Clients
• Application servers
• Database servers
• Based on Objects
• A collection of data and programs
• Employ Tables
• System configuration tables
• Control tables
• Applications data tables

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Enterprise Resource Planning Advantages of ERP

• Elimination of costly, inflexible legacy systems
• Improvement of work processes
• Increase in access to data for operational
  decision making
• Upgrade of technology infrastructure

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Enterprise Resource Planning Disadvantages of ERP

• Expense and time in implementation
• Difficulty integrating with other systems
• Risks in using one vendor

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Summary

• Introduction to Electronic Commerce
• E-Commerce Applications
• Technology, Infrastructure. And Development
• Transaction Processing Systems
• Enterprise Resource Planning