9. THE INTERNET: ELECTRONIC COMMERCE, ELECTRONIC BUSINESS

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10. THE INTERNET ELECTRONIC COMMERCE
ELECTRONIC BUSINESS
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LEARNING OBJECTIVES

• DESCRIBE INTERNET, ITS CAPABILITIES
• IDENTIFY INTERNET BENEFITS TO ORGANIZATIONS
• DEMONSTRATE HOW INTERNET USED FOR ELECTRONIC
  COMMERCE

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LEARNING OBJECTIVES

• DEMONSTRATE HOW INTERNET TECHNOLOGY USED FOR
  INTRA- AND INTERORGANIZATIONAL ELECTRONIC
  BUSINESS
• EXAMINE CHALLENGES OF INTERNET TO BUSINESS
  SOCIETY

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MANAGEMENT CHALLENGES

• THE INTERNET
• INTERNET ELECTRONIC COMMERCE
• INTRANETS ELECTRONIC BUSINESS
• CHALLENGES OPPORTUNITIES

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THE INTERNET

• BEGAN AS GOVERNMENT CONNECTION OF UNIVERSITIES
• INTERNET SERVICE PROVIDER (ISP) organization
  connected to Internet, leases temporary
  connections to subscribers
• NO ONE OWNS IT, NO FORMAL ORGANIZATION

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INTERNET CAPABILITIES

• E -MAIL person -to-person messaging document
  sharing
• USERNET NEWSGROUPS electronic bulletin boards
  for discussion groups
• LISTSERVs e-mail list servers for discussion
  groups
• CHATTING interactive conversations
• TELNET log on one computer, work on another
• FTP transfer files from computer to computer
• GOPHERS use menus to locate text material

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INTERNET ADDRESS
http//www.prenhall.com/laudon
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INTERNET TERMS

• HOME PAGE WWW screen display welcomes user to
  organizations page
• WEBMASTER person in charge of Web site
• UNIFORM RESOURCE LOCATOR (URL) address of
  specific Internet resource

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INTERNET TERMS

• HYPERTEXT TRANSPORT PROTOCOL (http)
  communications standard used to transfer Web
  pages
• HYPERTEXT MARKUP LANGUAGE (HTML) popular
  programming language for creating Web sites

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SURFING THE NET

• SEARCH ENGINE tool for locating specific sites
  or information on WWW
• PORTAL point of entry to WWW
• PUSH TECHNOLOGY server streams relevant
  content to browser
• MULTICASTING sending data to select group

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INTRANET

• INTERNAL NETWORK
• WWW TECHNOLOGY
• FIREWALL Security System to Prevent Invasion of
  Private Networks
• OVERCOMES COMPUTER PLATFORM DIFFERENCES
• OFTEN INSTALLED ON EXISTING NETWORK
  INFRASTRUCTURE

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EXTRANET

• ALLOWS SELECT USERS OUTSIDE ORGANIZATION TO USE
  ITS INTRANET
• CUSTOMERS
• BUSINESS PARTNERS
• VENDORS

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EXTRANET
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INTERNET BENEFITS

• GLOBAL CONNECTIVITY
• REDUCED COMMUNICATIONS COST
• LOWER TRANSACTION COSTS
• REDUCED AGENCY COSTS
• INTERACTIVITY, FLEXIBILITY, CUSTOMIZATION
• ACCELERATED KNOWLEDGE

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INTERNET ELECTRONIC COMMERCE

• EASY TO LINK WITH OTHER BUSINESSES, CUSTOMERS
• CAN UPDATE PRODUCT INFORMATION, ORDERING,
  CUSTOMER SUPPORT
• ON-LINE STOREFRONTS
• ENHANCED BUSINESS FORMS

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INTERNET ELECTRONIC COMMERCE

• CUSTOMER-CENTERED RETAILING
• DISINTERMEDIATION removal of intermediate layers
  streamlines process
• REDUCED COST TO BUYER, SELLER
• HIT each request for a file recorded in log file

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INTERNET BUSINESS MODELS

• VIRTUAL STOREFRONT sells goods, services on-line
• MARKETPLACE CONCENTRATOR concentrates
  information from several providers
• INFORMATION BROKER provides product, pricing,
  availability information

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INTERNET BUSINESS MODELS

• TRANSACTION BROKER buyers view rates, terms
  from various sources
• ELECTRONIC CLEARINGHOUSE auction-like setting,
  products, prices, change in response to demand
• REVERSE AUCTION buyer sets price, submits to
  multiple sellers

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INTERNET BUSINESS MODELS

• DIGITAL PRODUCT DELIVERY sell, download
  software, other digital products
• CONTENT PROVIDER creates revenue through
  providing client for a fee, and advertising
• ON-LINE SERVICE PROVIDER provides service,
  support for hardware, software products

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ELECTRONIC COMMERCE SUPPORT SYSTEMS

• WEB HOSTING SERVICES provides large servers for
  Web sites of fee-paying customer
• ELECTRONIC PAYMENT SYSTEM using Web for
  electronic funds transfers, credit , smart
  debit cards

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INTRANETS AND ELECTRONIC BUSINESS

• ELECTRONIC COMMERCE SERVERS
• BENEFITS
• GROUP COLLABORATION
• FUNCTIONAL APPLICATIONS
• SUPPLY CHAIN MANAGEMENT

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ELECTRONIC COMMERCE SERVERS

• ICAT on-line catalog shopping, order placement
  (Icat)
• NET.COMMERCE merchant server supporting Secure
  Electronic Transactions protocol (IBM)
• MerchantXpert search tools, order management,
  tax, payment, logistics modules (Netscape)

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ELECTRONIC COMMERCE SERVICES

• OPEN MARKET TRANSACT customer authentication,
  order payment processing, tax, multi-language
  customer service (Open Market)
• INTERNET COMMERCE SERVER integrates orders,
  inventory, customer service, payments (Oracle)

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BENEFITS OF INTRANETS

• CONNECTIVITY
• CAN BE TIED TO LEGACY SYSTEM TRANSACTION
  PROCESSING
• INTERACTIVE APPLICATIONS WITH TEXT, AUDIO, VIDEO
• SCALABLE TO LARGER OR SMALLER SYSTEMS AS REQUIRED

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BENEFITS OF INTRANETS

• EASY TO USE BROWSER INTERFACE
• LOW START-UP COSTS
• RICH, RESPONSIVE INFORMATION ENVIRONMENT
• REDUCED INFORMATION DISTRIBUTION COSTS

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GROUP COLLABORATION

• TEAMWARE intranet-based applications allow teams
  to share ideas, documents, brainstorming,
  scheduling. Similar to chat room.
• INTERNAL NEWSLETTER
• ABILITY TO WORK AT HOME
• SHARE INTERNET DISCOVERIES WITH COLLEAGUES

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FUNCTIONAL APPLICATIONS

• FINANCE ACCOUNTING
• HUMAN RESOURCES
• SALES MARKETING
• MANUFACTURING PRODUCTION

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FINANCE ACCOUNTING

• GENERAL LEDGER REPORTING
• PROJECT COSTING
• ANNUAL REPORTS
• BUDGETING

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HUMAN RESOURCES

• CORPORATE POLICIES
• EMPLOYEE SAVINGS PLANS
• BENEFITS ENROLLMENT
• ON-LINE TRAINING
• JOB POSTING

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SALES MARKETING

• COMPETITOR ANALYSIS
• PRICE UPDATES
• PROMOTIONAL CAMPAIGNS
• SALES PRESENTATIONS
• SALES CONTRACTS

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MANUFACTURING PRODUCTION

• QUALITY MEASUREMENTS
• MAINTENANCE SCHEDULES
• DESIGN SPECIFICATIONS
• MACHINE OUTPUT
• ORDER TRACKING

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SUPPLY-CHAIN MANAGEMENT
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CHALLENGES OPPORTUNITIES

• UNPROVEN BUSINESS MODELS
• BUSINESS PROCESS CHANGE REQUIREMENTS
• CHANNEL CONFLICTS
• TECHNOLOGY HURDLES
• LEGAL ISSUES
• SECURITY PRIVACY

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Connect to the INTERNET
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THIS CHAPTER
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10. THE INTERNET ELECTRONIC COMMERCE
ELECTRONIC BUSINESS
10.35