Review & Reflection? Each week,?you will be asked to respond to the prompt or prompts in the discussion forum.?Your initial post should be a minimum of?300?words
Review & Reflection
Each week, you will be asked to respond to the prompt or prompts in the discussion forum. Your initial post should be a minimum of 300 words in length, and you should respond to two additional posts from your peers.
Review and reflect on what you learned in the past 8 weeks. What is the most practical and easily applied lesson you learned? What was the hardest to grasp? Why? What else do you need to know about E-Business?
Course Review Required Text Schneider, G. (2012). Electronic Commerce (10th edition), Course Technology Cengage learning. Boston, MA ISBN: 978-1-133-52682-7
The expansion of the Internet, increased bandwidth and advancements in information systems has increased the practicality and usability of Ecommerce.
“For many people the term “Electronic commerce” means shopping on the part of the Internet called the World Wide Web (the Web)” (Schneider, 2013, p. 5). These advancements in technology have brought Ecommerce from the first wave, the beginning of Ecommerce, to the portable mobile devises that are now at the forefront of the Ecommerce third wave (Schneider, 2013).
There are three main elements of Ecommerce:
Business processes that support selling and purchasing activities.
Business-to-consumer electronic commerce
Business-to Business electronic commerce (Schneider, 2013, figure 1-1, p. 7).
Additionally, there are Consumer-to-Consumer (C2C) activities such as EBay transactions between consumers, and Business to Government (B2G) activities such as tax transactions. While there are many online transactions suitable for Ecommerce, not all business processes are suitable for Ecommerce. Figure 1-5 of Schneider, 2013, p. 17 provides a summary of business processes the their suitability to Ecommerce.
Chapter 1 Intro to Ecommerce and Ecommerce infrastructure
Some Business processes may never fully adapt to Ecommerce such as the grocery industry. While some major grocery chains offer online ordering and delivery, the companies that are in the online grocery business are small and tend to favor metropolitan areas where there is a mass market that supports the Ecommerce grocery industry (Schneider, 2013, p. 20). There are additional issues that can curtail Ecommerce in certain business processes such as cost, technology issues, Cultural and legal concerns (Schneider, 2013, p. 21).
“Transaction costs are the total of all cost that a buyer and seller incur . . . [for a] transaction” (Schneider, 2013, p. 23). Figure 1.6 of Schneider, 2013, p. 24 provides a notional flow of an Ecommerce market and the transactions where the Ecommerce process may incur cost. Moving into the Ecommerce market is not without risk and any company interested in pursuing Ecommerce opportunities should conduct a Strength, Weakness, Opportunity and Threats (SWOT) analysis to determine the practicality of entering into the Ecommerce market (Schneider, 2013, Figure 1.11 p. 33 and Figure 1-12 p. 34). Trust is paramount in Ecommerce. The ability to develop a reputation based on product, delivery, and security satisfaction is essential to maintaining Ecommerce clients.
International Ecommerce has unique attributes that can be challenging for International Ecommerce. Language, cultural, Government and Infrastructure issues can complicate the Ecommerce model. Figure 1.6 of Schneider, 2013, p. 24 provides a notional flow of International trade transactions.
The origin of the Internet, the infrastructure that makes Ecommerce possible, is the United State Department of Defense that developed a method of linking computers together for command and control of missile systems using large mainframe computers (Schneider, 2013, p. 55). “In 1969, a Defense Department researcher in the Advanced Research Projects Agency (ARPA) . . . connect[ed] four computers at [UCLA], SRI International, [UC Santa Barber], and the University of Utah” (Schneider, 2013, p. 56). This connection was the first instance of a network that eventually became the World Wide Web (WWW). The first Email list followed in 1979 and through the 1970’s and 80’s network software and applications developed mainly in the University sector (Schneider, 2013). By the late 1980s and 1990s, private sector growth began through the introduction of public Internet Providers and the development of network software and Internet Protocol (IP) addresses. As the number of Internet Hosts (Computers directly connected to the internet) grew so did the number of people who were using the Internet (Schneider, 2013, figure 2-1, p. 58).
Chapter 2. Technology Infrastructure and WWW
In addition to the Intranet, there are certain applications that require special types of Internet connectivity. These nets are termed Intranet net as opposed to Internet and Extranet. Intranets are Internets that remain within an the organization and Extranet is a dedicated internet hat communicates with specific entities and business (Schneider, 2013, p. 61). Intranets and Extranets are specific purpose Internets generally established to reduce cost and increase efficiency.
Internet protocols evolved to two main protocols, Transmission Control Protocol (TCP) and Internet Protocol (IP) commonly referred to as TCP/IP. The addresses scheme for the Internet Protocol is based on the binary system of 1’s and 0’s, the fundamental language of the computer. Each 1 and 0 referred to as a bit provides for a on “1” or off “0” state of a binary bit. To this end, a string of bits make up a computer address. Defining the bits as either 1 or 0 in a specific pattern makes for a unique address. The more bits the more addresses are available. As the Internet has grown, different versions of TCP/IP addresses are introduced to accommodate the growing number of addresses to accommodate the growing number of individuals and companies on the Internet. The first non-developmental version of TCP/IP was version 4 and contained 32 bits. The new version 6 (there was no version 5) contains 128 bits. 32 bits produces a potential 4,294,967,296.00 Internet addresses where 128 bits produces a potential 340,282,366,920,938,000,000,000,000,000,000,000,000.00 Internet addresses. There is a great demand for the Internet.
Packet switching net works provided a means of making the Internet practical by providing an organized means of transferring data for email and other data through a standard protocol. This enabled the Internet to connect and be configured into Local Area Networks (LANs) and Wide Area Networks (WANs). Schneider, 2013, figure 2-2, p. 60 provides a notional rendering of LANs and WANs and how they may connect to the Internet.
The World Wide Web evolved from a few computers to many computers connected to the Internet essentially forming a web of computers that circles the globe. The ability to search the textural information on the web is a result of the work of the scientific community that developed hypertext and eventually Hyper-Text Markup Language (HTML) (Schneider, 2013, pp. 66-67). Markup languages are essential for viewing web page content as the text markup language specifies a set of tags that are inserted into the [webpage] text. These markup tags . . . provide formatting instructions that Web client software can understand . . . as it renders the text and [web] page elements (Schneider, 2013, pp. 70-71).
Standard Generalized Markup Language (SGML) is the germinal standard first derived in 1986. From this standard, the Mark Up languages of HTML, XML, and XHTML were developed all with the same basic intent of rendering tagged information on Web site for various purposes. Figure 2-5 on page 71 of Schneider, 2013, provides a hierarchical flow of these standards.
Connectivity to the Internet may be established in several different manners; however, all rely on specific Band Width. “Band Width” is the amount of data that can travel through a communications medium [wire or wireless] per unit of time” (Schneider, 2013, p. 84). “Figure 2-15 Internet connection options” (Schneider, 2013, figure 2-1, p. 91) provides an overview of Internet services (connection options) and capabilities in relation to startup and operational cost.
With the original ARPANET now the Internet and World Wide Web, scientists have developed an Internet2 for purposes of research and development which is separate from the Internet. The Internet2 is mainly a research tool for technology development in areas of bandwidth and Internet speed (Schneider, 2013, p. 91).
Semantic web is a project that is used for conducting research on the development of advanced methods of reading information from the Internet. Semantic Web development is research into making the entire World Wide Web a searchable database based on XML by tagging webpages to understand the meaning of the words and to collect data from several web sites based on the users search criteria (Schneider, 2013, p. 91).
The Revenue Model for Ecommerce is rooted in the development of the catalog beginning in 1872 (Schneider, 2013, p. 107). The catalog concept allows shoppers to view what the want to buy and the cost of the each item. Ecommerce web sites are similar in that they provide information, pictures and prices for items for purchase. Discounts and shipping information are also provided (Schneider, 2013, p. 112).
Fee for content Ecommerce sells the rights to access information. Such webs sites provide Legal, academic, business, technical content, Electronic books, online music and video (Schneider, 2013, pp. 112-113). Figures 3-2 on page 116 and figure 3-3 on page 119 provides examples of revenue models (Schneider, 2013).
Chapter 3 Selling on the web Marketing on the web
Creating effective web presences are essential. Figure 3-5 on page 133 (Schneider, 2013) list the objectives and strategies for effective web presences. Establishing an effective brand image is essential such as Coke and Pepsi (Schneider, 2013, p. 133).
Building flexibility into the web site is the best way to meet the needs of all clients (Schneider, 2013). Some visually impaired clients may use special web browser software for reading text from web sites. “The W3C web accessibility initiative includes a number of useful links to information regarding these issues” (Schneider, 2013, p. 137). Visit the W3C web site at http://www.w3.org/WAI/ for more information.
Connecting with customers may be accomplished in a combination of three ways; Mass media is a one-to-many model, the web, a many-to-one and many-to-many model and personal contact, a one-to-one model (Schneider, 2013, figure 3-9, p. 143).
Effectively communicating with different web segments requires identifying potential customer groups. Media selection that a particular customer group may identify with is essential. Due to consumer becoming desensitized to many TV commercials, mass media messages are not as effective as they once were. Developing a loyal following for a web site is critical and mass media type banners and advertising is may be effective for web sites if the banners are not intrusive. Building customer loyalty is essential. Schneider, 2013, figure 4-4, (p. 166) provide an illustration of the relationship between customer level of loyalty and time.
Technology-enabled Relationship Management is a form of managing customers relationship with a company when the company . . . “obtains detailed information about a customers behavior, preferences, needs, and buying patterns, and uses that information to set prices, negotiate terms, tailor promotions, add product features, and otherwise customize its entire relationship with the customer” (Schneider, 2013, p. 180). This process is refined into Customer Relationship Management (CRM). The CRM process is illustrated in figure 4-9 of Schneider, 2013, (p. 183).
Chapter 4 Marketing on the web
Viral marketing through social media is a departure from the traditional marketing model that has companies communicating directly with customers or through an intermediary. Social media provide a means in which the customers can promote, or demote, products and services from companies on the web by tagging and connecting to friends and family through social media. Figure 4-1, (Schneider, 2013, p. 187) illustrates viral marketing through social media.
Domain selection and positioning within search engines are critical for potential customers to find your web site and products on the web. Paid search engine placement varies in price and can be expensive depending on the name and domain. Figure 4-14 on page 193 (Schneider, 2013) lists Domain names that sold for over $2 Million. A more affordable means of advertising on the web is available through purchasing banner time for advertising on more popular web sites.
Purchasing, logistics and business processes include many steps and sequences to complete the business flow from identification of needs to completing transactions. Figure 5-1 of Schneider, 2013 (p. 210) illustrated the typical business process. Information systems and the Internet have improved the efficiency of the business process through enhancing information systems and Internet based processes through the implementation of Electronic Data Interchange (EDI). EDI invokes a set of standards for common business transactions to make the business process more efficient. See figure 5-5 Schneider, 2013 (p. 219) for an example of common EDI transactions. Compare the information flow in a paper process as illustrated in Schneider, 2013 (Figure 5-6 p. 220) with the Information flow in an EDI process as illustrated in figure 5-7 Schneider, 2013 (p.222).
Chapter 5 Business –to-Business Activities; Improving efficiency and reducing cost.
Electronic marketplaces and portals started in the 1990s with industry and market specific hub or portals. The specific nature of these hubs limits the business of the hubs to certain markets. In the 2000s Internet business grew and so did the need for more diverse hubs that would align to more than one specific market (Schneider, 2013). While these portals are also available in the private sector, Business-to-Business (B2B) portals provide for an industry consortium market place. Figure 5-13 (Schneider, 2013, p. 235) provides an illustration of the characteristics of the B2B market.
The prominence of Social Networking is such that it has become a dominant market venue for an online mobile social society. The development of Social networking sites, as illustrated in figure 6-1, Schneider, 2013, (p. 249) underscores the demand for social media and the response from the technological community to support. Figure 6-2 Schneider, 2013, (p. 249) illustrates, essentially, the market available through social media in that nearly the entire northern hemisphere is connected via some form of social media.
Chapter 6 Social networking, mobile commerce and online auctions
Smart phones have changed the marketing scheme by providing a device that connects consumers to the Internet remotely providing for a mobile social market. The operating systems that power these devices have evolved as the need for getting and staying connected to a global social market increases. Figure 6-5 Schneider, 2013, (p. 256) illustrated the changes in Smart Phone operating systems market share. Note the decline of the Black Berry operating system share from 2006 to 2011 as Black Berry remained more of a business application as did windows while Android and Apple focused more on the social connectivity aspect of the market. The social mobile market has many aspects including Social Networking web sites for shoppers, Idea-based Social Networking and virtual learning networks (Schneider, 2013, (p. 251). These mobile devices, networks and markets represent the third wave in Ecommerce.
Ecommerce has been placed in the consumer’s hands through the implementation of auction web sites. Web sites such as eBay solve the most basic of business problems, “How do I get to market?” Auction webs sits provide the means to open a global market to anyone with Internet access.
Ethics and laws are mainly a function of culture (Schneider, 2013) and as such, a balance between the culture and the power, which is essentially a form of control, is necessary to establish an environment that is legal and ethical in the Ecommerce world. “Physical geographical boundaries lead to legal boundaries” (Schneider, 2013, Figurer 7-2 p. 286) and define the relationship between Power, Effects, Legitimacy and Notice. Establishing jurisdiction on the Internet is more difficult then in the actual world as there are no physical or geographical boundaries on the Internet. Contracts between buyers and sellers are an essential part of the commerce and Ecommerce is no exception. Ecommerce Web Sites provides invitations for offers of merchandise. Adding items to an online shopping cart is an indication of acceptance of the price and is the beginning of entering into a legal contract to purchase. When the purchases are finalized and paid for with a credit card or online secure payment system, the consumer has entered into a contract to make payment and accept the terms of the sale as indicated on the web site. Figure 7-4 on page 292 of Schneider, 2013 illustrates the contracting process online for Ecommerce.
Chapter 7 The environment if Electronic Commerce legal, ethical and tax issues
Protecting copyrights and intellectual property on the Web is essential as access to the protected information on the web is pervasive. Web site copyrights are obtained from the government as filed by the appropriate paperwork to establish the official legal protection for a given individuals work, web site content included. Many webs sites proved copy write information at the bottom of the main page. The copy write information not only serves to protect the content on the web site it is also useful in citing the web site information in academic writing.
A digital form of a watermark also protects intellectual property such as images and music. The digital watermark “ . . . is a digital code or stream embedded undetectably in a digital image or music file” (Schneider, 2013, p. 302). These digital watermarks are steams identify the legal owner the material.
Online crime includes many of the same crimes that take place in the physical world such as “ . . . theft, stalking, distribution of pornography and gambling” (Schneider, 2013, p. 306). Jurisdiction makes combatting online crime difficult for many law enforcement organizations as the laws vary by region and culture around the world.
Warfare and terrorism has increased online as the World Wide Web expands, the access to technology is increasingly less difficult to obtain and Internet access is now reaching to remote areas of the world. “The US department of Home Land Security and international police agencies such as [INTERPOL] are devoting considerable resources to monitoring terrorists activities online” (Schneider, 2013, p. 309). The Internet also has proven to be a formidable communications network for terrorist activities. Conversely, the Internet has provided a means to support warfare for the US and its allies as evident from the use of information systems to conduct a cyber attack on Iraq during the first Iraq war, Desert Storm (Lewis, 2010).
Ethical business practices are essential online as many online consumers communicate with each other through the Internet, social media and mobile devices. As the propensity for online sales continues to grow, online merchants must adhere to an ethical code of conduct that provides for a secure enjoyable online experience. The use of system generated emails based on user internet activity can be an ethical issue if the uses does not have the opportunity to either opt-in or opt-out of emails for products and services. Figure 7-10 page 313 and figure 7-11 page 314 of Schneider, 2013, provide illustrations of the mechanization of opt-in and opt-out selectable options on a web site.
Collecting and paying taxes on the web is possible through software that connects to the Internal Revenue Service (IRS). When companies establish a connection between “. . . a tax paying entity and the government . . . [a] nexus [is formed]” (Schneider, 2013, p. 317). This nexus requires the payment of state sales tax. This tax is essentially a use tax based on a sales transaction (Schneider, 2013, p. 319). Companies that conduct business on the web where a nexus is established between the state government and the business requires the payment of the use tax by the company and as such, this cost is passed on to the consumer.
There are many types of computer platforms around the world connected to the Internet. What makes these connections possible is “ . . . platform neutrality . . .” (Schneider, 2013, p. 335). Figure 8-1, page 335 Schneider, 2013 illustrates the nature of the Internet and platform neutrality. The basic functionality of the Internet is based on the client-server architecture where HTTP protocol provides for exchanges between client and server by use of the TCP/IP Internet protocol. The exchange between a web client and a single web server is a termed a two-tier network. Exchanges between a web client and two or more web servers are known as a three-tire network and are common when linking web users to databases to provide additional information such as a catalog. Figure 8-2 page 338 and figure 8-3 page 340 of Schneider, 2013 provides illustrations of the two and three tier web client and web server exchange processes.
Chapter 8 Web server hardware and software
A majority of Internet software is provided from Apache [HTTP] web server and Microsoft Internet Information Server (IIS) (Schneider, 2013, p. 341). Email makes up a large percentage web usage and spam “(unsolicited commercial e-mail or bulk mail Electronic junk mail” Schneider, 2013, p. 553) has become a burden to corporations as many resources are used to deter, detect and eradicate viruses that may accompany the spam. Schneider, 2013 figure 8-5 page 344 illustrates the increase over the years of spam as a percentage of companies emails.
Like Internet service providers, Ecommerce has Internet providers that cater to the needs of Ecommerce. Commerce Service Providers (CSPs), Managed Service Providers (MSPs) and Application Service Providers (ASPs) provide internet hosting services that are not limited to internet access but also provide, in addition to Internet access, services that support Ecommerce.
Basic functions of Ecommerce software include, Catalogs, Shopping carts, Web services, Enterprise Resources Planning (ERP) Integration, and Supply chain management. Schneider, 2013, p. 374).
Small and mid-size companies use service providers rather than building an expensive Internet hosting network of their own. “Mall-style commerce service provides (CSPs) provide small business with a Internet connection, Web site creation tools and little or no banner advertising clutter” Schneider, 2013, p. 388. The advantage to using these CSPs is the relatively low cost to establish an Ecommerce presence on the inter net. Figure 9-8 page 389 of Schneider, 2013 provides a summary of estimated cost for establishing a small store online.
Chapter 9 Ecommerce software
Mid to large companies have the resources to invest in Internet development tools and Ecommerce software that connects to database systems for catalogs that can be easily maintained when products or services change or are updated. Some of the software systems available are Intershop Enfinity, IBM WebSpere Commerce Professional and Microsoft Commerce server (Schneider, 2013 pp. 391-392).
Large Business that have an existing information system infrastructure can benefit from Enterprise-class Ecommerce software. Enterprise-class Ecommerce software includes features for linking supply and purchasing functions along with B2B activities (Schneider, 2013 p. 393). Figure 9-9 of Schneider, 2013 illustrates a typical enterprise-class Ecommerce system.
“Computer security is the protection of assets from unauthorized access, use, alteration or destruction” (Schneider, 2013, p. 410). Understanding the risks involved with computer security is essential. Figure 10-1 (Schneider, 2013, p. 410), provides an illustration of the risks an impacts associated with computer security.
Security for client computers requires the ability to protect the client “ . . . computer from threats that originate in software and data that are downloaded to the client computer from the Internet” (Schneider, 2013, p. 413). Cookies are small files that identify returning visitors to particular web sites. The cookies contain private information about the client and the only means of protecting the client’s information completely is to disable the cookies. “The problem with this approach is that the useful cookies are blocked along with the others requiring visitors to enter information each time they visit the website” (Schneider, 2013, p. 414).
Chapter 10 Electronic Commerce Security
Communication channel security entails security between communications layers. The Internet is not meant to be secure (Schneider, 2013) and therefore layers of security must be in place to keep Ecommerce transactions secure. Threats to secrecy, integrity, necessity, physical communications and wireless communications require encryption as a means of keeping data and information secure. Encryption algorithms transform “ . . . plan text into cipher text (the unintelligible string of character) . . . “ (Schneider, 2013, p. 433). The encrypted text provides for a mathematical pattern that is very difficult to transcribe and thus, renders the information secure. This form of security is essential for both physical and wireless networks.
Payment methods require the secure transfer of information. Payment cards make up the majority of online payment methods (Schneider, 2013, figure 11-1 p. 464). Digital wallets provide means of holding credit card numbers or electronic cash (Schneider, 2013) and making the credit card number or electronic cash securely accessible for online purchases.
Stored value cards include Magnetic strip and smart cards. Stored value cards provide a means of storing information related to financial accounts that can produce funds when funds are available. The difference between magnetic strip cards and smart cards is that the information in a smart card is stored in an encrypted microchip, as magnetic strip cards cannot be encrypted making smart cards more secure that magnetic strip cards.
Banking industries provide technologies for secure storage and transfer of funds and check processing functions. Increased activity from Mobile banking from smart phones and portable electronic devices are requiring banks to add services and security to support these activities. Banks also provide protection from identity theft.
Chapter 11 Payment Systems for Ecommerce
Planning for Ecommerce requires an understanding of the elements of project management such as cost of the initiative (project), the technical aspects of the initiative and the schedule in which the initiative is to be implemented. Estimating initiatives cost is best demined by researching similar initiatives. The benefits of Ecommerce initiatives are summarized in Figure 12-1, Schneider, 2013, p. 501.
Strategies for developing Ecommerce Web Sites includes Internal Development that requires the expertise to design, construct, and manage the project from internal means. This can include a great deal of risk if the project scope is underestimated. Outsourcing can mitigate risk by employing the services of a company that specializes in website development, has the proper resources available and the experience to understand the design development and implementation.
Managing Ecommerce implementation requires project management skills and expertise. Project management software provides for control of essential aspects of project management including cost, technical and schedule. Selecting the correct means of controlling the project upfront will allow for a comprehensive analysis of the project as the project progresses.
Project plans are also essential and should include as a minimum processes for estimating and controlling cost, staffing, outsourcing, long-term maintenance and scalability.
Chapter 12 Planning for Electronic Commerce
Lewis, J., A. (2010). Thresholds for cyber war. Center for strategic and international studies. Available from http://csis.org/files/publication/101001_ieee_insert.pdf
Microsoft MSDN. (2013). IPv6 Addresses. Available from http://msdn.microsoft.com/en-us/library/aa921042.aspx
Schneider, G. (2012). Electronic Commerce (10th edition), Course Technology Cengage learning. Boston, MA
References
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