Chapter 12 Building E-Commerce Applications and Infrastructure

1
Chapter 12Building E-Commerce Applications and
Infrastructure
2
Learning Objectives

• Discuss the major steps in developing an EC
  application
• Describe the major EC applications and list their
  major functionalities
• List the major EC application development options
  along with their benefits and limitations
• Describe various EC application outsourcing
  options
• Discuss the major components of an electronic
  catalog and EC application suite

3
Learning Objectives (cont.)

• Describe various methods for connecting an EC
  application to backend systems and databases
• Describe the criteria used in selecting an
  outsourcing vendor and package
• Understand the value and uses of EC application
  log files
• Discuss the importance and difficulties of EC
  application maintenance

4
Tracking United Parcel Service (UPS) Shipments

• The Problem
• UPS has provided the means for customers to track
  their shipments to determine the status and
  whereabouts of a particular package for some time
  this was accomplished over the telephone
• Customers would call UPS with the tracking number
  
• Operator would look up the status of the shipment
  and relay the information to the customer
• Servicing cost about 2 per call

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Tracking United Parcel Service (UPS) Shipments
(cont.)

• The Solution
• UPS created a Web site (ups.com) in 1996-97 that
  enabled customers to
• Track their shipments online
• Determine the cost and transit time for delivery
  of a package
• Schedule a package for pickup
• Locate the nearest drop-off facility

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Tracking United Parcel Service (UPS) Shipments
(cont.)

• The Results
• UPS site services over 4 million online tracking
  requests per day
• Also offers
• Option of tracking their packages through
  wireless devices
• A set of e-commerce solutions and a technology
  infrastructure that enables other companies to
  incorporate UPS online order entry, shipping,
  and tracking capabilities
• E-commerce tools and services for managing a an
  enterprises overall supply chain

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Landscape and Framework of EC Application
Development

• Development process
• Step 1 EC architecture creation plan includes
• Business goals and vision for the site
• Information and data required to fulfill the
  goals and vision
• Application modules that will deliver and manage
  the information and data
• Specific hardware and software on which the
  application modules will run,
• Human resources and procedures for implementing
  the architecture

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Landscape and Framework of EC Application
Development (cont.)

• Step 2 Select a development optiondeveloped
  in-house, outsourced to another party, or some
  combination of both
• Step 3 Installing, testing, and deploying
• Unit testingtesting application software modules
  one at a time
• Integration testingtesting the combination of
  application modules acting in concert
• Usability testing testing quality of the users
  experience when interacting with a Web site
• Acceptance testingdetermining whether a Web site
  meets the original business objectives and vision
  
• Step 4 Operation and maintenanceshould be
  continually updated

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Major EC Applicationsand Their Functionalities

• A storefront should offer buyers the means to
• Discover, search, evaluate, and compare products
• Select product ad negotiate price
• Place an order using a shopping cart
• Payment of purchase usually on credit
• Order confirmation
• Track orders once they are shipped

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Major EC Applicationsand Their Functionalities
(cont.)

• Merchants needs to
• Provide access to personalized catalogs
• Provide electronic shopping cart
• Verify customer credit and approve purchases
• Process the orders (back-end services)
• Arrange for product delivery
• Track shipments to make sure they are delivered
• Provide the means for buyers and visitors to
  register, make comments, or request additional
  information

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Major EC Applicationsand Their Functionalities
(cont.)

• Merchants (cont.)
• Answer customers questions
• Analyze purchases in order to customize buyers
  experiences
• Provide Web-based post-sale support
• Create the capability for cross-sell and up-sell
• Provide language translation if needed
• Measure and analyze the traffic at the site

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Major EC Applicationsand Their Functionalities
(cont.)

• A storefront must contain three interrelated
  subsystems
• Merchant system or storefront that provides the
  merchants catalog and shopping cart
• Transaction system for processing orders,
  payments, and other aspects of the transaction
• Payment gateway that routes payments through
  existing financial systems

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Major EC Applicationsand Their Functionalities
(cont.)

• Supplier sell-side site
• Personalized catalogs and Web pages for all major
  buyers
• B2B payment gate
• Electronic contract negotiation features
• Product configuration by customers
• Affiliate program capabilities
• Business alerts

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Major EC Applicationsand Their Functionalities
(cont.)

• Procurement
• E-procurement site is an online intermediary
  that offers businesses access to hundreds of
  parts and services provided by suppliers
• Catalog Management
• Collaborative Planning
• On-line Purchase
• Purchase Order Handling
• Document Service
• Historical Performance Service
• Information Service
• System Administration

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Major EC Applicationsand Their Functionalities
(cont.)

• Aggregating catalogs
• Search engine for locating items with particular
  characteristics
• Comparison engine for alternative vendors
• Ordering mechanism
• Budget and authorization feature
• Usage comparisons (among various departments)
• Payment mechanism (e.g., use of a purchasing card)

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Major EC Applicationsand Their Functionalities
(cont.)

• Reverse auctions
• Catalog of items to be tendered and their content
  management
• Search engine
• Personalized pages for potential large bidders
• Reverse auction mechanism
• Facility to help prepare, issue, manage, and
  respond to a buyers requests for quotes (RFQs)
• Ability to bid dynamically
• Automatic vendor approval and workflow

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Major EC Applicationsand Their Functionalities
(cont.)

• Reverse auctions (cont.)
• Electronic collaboration with trading partners
• Standardization of RFQ writing
• A site map
• A mechanism for selecting suppliers to
  participate
• Automatic matching of suppliers with RFQs
• Automatic business process workflow
• Ability for bidders to use m-commerce for bidding
• Automated language translation

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Major EC Applicationsand Their Functionalities
(cont.)

• Exchanges
• Collaboration services
• Community services
• Web-automated workflow
• Integrated business process solutions
• Central coordination of global logistics
• Integration services

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Major EC Applicationsand Their Functionalities
(cont.)

• Exchanges (cont.)
• Data mining, customized analysis and reporting,
  real-time transactions, trend and customer
  behavior tracking
• Transaction flow managers
• Negotiation mechanisms
• Language translation
• Comprehensive links to related resources

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Development Options for EC Applications

• Insourcingin-house development of applications
• Development approaches
• Build from scratch
• Build from components
• Prototyping methodology

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Development Options forEC Applications (cont.)

• Buy the applications (turnkey approach)

• Disadvantages
• Software doesnt exactly fit needs
• May be difficult to modify
• Loss of control over improvements and versions
• Difficult to integrate
• Vendors may drop product or go out of business

• Advantages
• Availability of many off-the-shelf packages
• Saves time
• Requires few dedicated personnel
• Company knows what it is getting
• Not the first and only user of the software

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Development Options forEC Applications (cont.)

• Lease
• Types of leasing vendors
• Lease the application from an outsourcer and
  install it on company premises
• Use an application system provider (ASP)
• Application service provider (ASP)
• A company that provides business applications
  to users, for a small monthly feego online to
  use the equipment and software that resides with
  the ASP

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Development Options forEC Applications (cont.)

• Other development options
• E-marketplaces, exchanges, auctions, or reverse
  auctions
• Joint ventures and consortia
• Internet malls
• ISPs
• Telecommunications companies
• Software houses

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Criteria for Selecting a Development Approach

• Flexibility
• Information requirements
• User friendliness
• Hardware and software resources
• Installation
• Maintenance services
• Vendor quality and track record

• Estimating costs
• Measuring benefits
• Personnel
• Technology evolution
• Scaling
• Sizing
• Performance
• Reliability
• Security

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Third-Party EC Components and Suites

• Electronic catalogs
• Virtual-world equivalent of traditional product
  catalog, containing product descriptions and
  photos, along with information about various
  promotions, discounts, payment methods, and
  methods of delivery
• Merchant server software
• Electronic catalog

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Third-Party EC Components and Suites (cont.)

• Features of electronic catalogs
• Templates or wizards for creating a storefront
  and catalog pages
• Electronic shopping carts
• Web-based order forms for making secure purchases
• A database for maintaining product descriptions,
  pricing, and customer orders
• Integration with third-party software for
  calculating taxes and shipping costs and for
  handling distribution and fulfillment

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Third-Party EC Components and Suites (cont.)

• EC suitecombined set of tools giving builder and
  users
• Greater flexibility
• Specialization
• Customization
• Integration
• Support for complete functionality

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EC Suites

• Internetworld Commerce Suite
• Channel marketing
• Order management
• Account management
• Customer service

• Websphere Commerce Suite
• Order management
• Collaborative filters
• Portal capabilities
• Multicultural support
• E-coupons
• Additional bundled products
• Catalog manager
• Payment manager

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Connecting to Databases and Other Enterprise
Systems

• Multi-tiered application architecture
• EC architecture consisting of four tiers
• Web browserdata presented to and collected from
  the user
• Web serverdelivers Web pages
• Application serverexecutes business rules
• Database serverdata is stored, managed, and
  requests processed

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Connecting to Databases and Other Enterprise
Systems (cont.)

• Enterprise application integration
• Aims to integrate applications (including
  internal applications) that have been developed
  by different organizations
• If source code is unavailable (altering the
  application is not possible), EAI becomes the
  glue between the applications

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Vendor and Software Selection

• Steps in selecting software package
• Identification potential vendors
• Determination the evaluation criteria
• Evaluate vendors and packages
• Choose a vendor and package
• Negotiate a contract
• Establish service level agreement

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Vendor and Software Selection (cont.)

• Identification potential vendors eliminate
• Too small vendors
• Vendors with questionable reputations
• Packages without required features
• Packages that dont fit with hardware, operating
  system, network, etc.

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Vendor and Software Selection (cont.)

• Determination the evaluation criteria
• Characteristics of the vendor
• Functional requirements of the system
• Technical requirements the software must satisfy
• Amount and quality of documentation provided
• Vendor support of the package

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Vendor and Software Selection (cont.)

• Evaluate vendors and packages determine the gaps
  between
• Companys needs as specified by the requirements
• Capabilities of the vendors and their application
  packages

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Vendor and Software Selection (cont.)

• Choose a vendor and package
• Additional development effort required to tailor
  the system to the companys needs or to integrate
  it into the companys environment
• Opinions of users and IT personnel who will have
  to use and support the system

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Vendor and Software Selection (cont.)

• Negotiate a contract
• Specify price of software
• Determines the type and amount of support to be
  provided by the vendor
• Use software purchasing specialists who assist in
  negotiations and write or approve the contract

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Vendor and Software Selection (cont.)

• Establish service level agreement
• Formal agreements regarding the division of work
  between a company and its vendors
• Define the partners responsibilities
• Provide framework for designing support services
• Allow company to retain as much control as
  possible over their own systems

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Usage Analysis and Site Management

• Access log
• A record kept by a Web server of every time a
  user accesses the server kept in a common log
  file format, each line of this text file details
  an individual access
• Pageviews by time bucket
• Pageviews by customer logging-in status
• Pageviews by referrer
• Pageviews by visitors hardware platform, OS,
  browser and/or browser version
• Pageviews by visitors host

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Site Management andUsage Analysis (cont.)

• E-commerce management tools from BMC Corp. at
  bmc.com
• Patrol for e-business management
• Measures Web response time
• Firewall administration
• Application servers
• Patrol for Microsoft
• Open market
• Netscape

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Managerial Issues

• What is our business perspective?
• Do we have a systematic development plan?
• Insource or outsource?
• How should we choose a vendor/software?
• Have we analyzed the data?

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Summary

• Discuss the major steps in developing an EC
  application
• Describe the major EC applications and list their
  major functionalities
• List the major EC application development options
  along with their benefits and limitations
• Describe various EC application outsourcing
  options
• Discuss the major components of an electronic
  catalog and EC application suite

42
Summary (cont.)

• Describe various methods for connecting an EC
  application to backend systems and databases
• Describe the criteria used in selecting an
  outsourcing vendor and package
• Understand the value and uses of EC application
  log files
• Discuss the importance and difficulties of EC
  application maintenance