Practitioner Series

Springer London Berlin Heidelberg New York Barcelona Budapest Hong Kong Milan Paris Santa Clara Singapore Tokyo

Other titles in this series:

The Politics of Usability L. Trenner and J. Bawa 3-540-76181-0

The Project Management Paradigm K. Burnett 3-540-76238-8

Key Java J. Hunt and A. McManus 3-540-76259-0

Distributed Applications Engineering l. Wijegunaratne and G. Fernandez 3-540-76210-8 Publication due Autumn, 1998

Finance for IT Decision Makers M. Blackstaff 3-540-76232-9 Publication due Autumn, 1998

Using Interface Design: Conceptual Modelling using ERMIA D. Benyon, D. Bental and T. Green 1-85233-009-0 Publication due Autumn, 1998

Middleware D. Serain 1-85233-011-2 Publication due Autumn, 1998

Michael Chesher and Rukesh Kaura

Electronic Commerce and Business Communications

, Springer

Michael Chesher Kingston Business School Kingston University Kingston upon Thames Surrey KT2 7LB

Rukesh Kaura Chase Investment Bank Ltd 125 London Wall London EC2Y SAJ

ISBN-13: 978-3-540-19930-4

001: 10.1007/978-1-4471-3018-5

e-ISBN-13: 978-1-4471-3018-5

British Library Cataloguing in Publication Data Chesher, Michael

Electronic commerce and business communications. - (Practitioner series) 1. Business - Data processing I. Title II. Kaura, Rukesh, 1971-658'.05

ISBN 3540199306

Library of Congress Cataloging-in-Publication Data Chesher, Michael, 1942-

Electronic commerce and business communications 1 Michael Chesher and Rukesh Kaura.

p. em. -- (Practitioner series) Includes bibliographical references and index. ISBN 3-540-19930-6 (pbk.: a1k. paper) 1. Electronic commerce. 2. Business communication - Computer

networks I. Kaura, Rukesh, 1971- . II. Title. III. Series. HF5548.32.C474 1998 658.8'00285' 4678--dc21 98-11200

Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms of licences issued by the Copyright Licensing Agency. Enquiries concerning reproduction outside those terms should be sent to the publishers.

© Springer-Verlag London Limited 1998 Softcover reprint of the hardcover 1 st edition 1998 2nd printing 1999

The use of registered names, trademarks etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant laws and regulations and therefore free for general use.

The publisher makes no representation, express or implied, with regard to the accuracy of the information contained in this book and cannot accept any legal responsibility or liability for any errors or omissions that may be made.

Typesetting: Troubador Publishing Ltd, Market Harborough, UK

34/3830-54321 Printed on acid-free paper

Preface

The last decade has bought about many changes, but perhaps the most pro­found is the impact upon the most basic of human activities - communica­tion and access to information. Like most changes, they have ingrained themselves in our everyday lives before we know it. So it is with electronic commerce and business communications, now a critical element of corpo­rate life and becoming increasingly so in the home through the rapid and unpredictable growth of the Internet.

From a corporate perspective, the marketplace continues to become more competitive, global in nature and changes occur in ever shortening cycles. Success in this new business environment depends upon having an aware­ness of what is now possible, and understanding how information technol­ogy can support business led process improvements that really make a difference in achieving competitive advantage.

For those in the forefront of electronic commerce initiatives, the fast pace of change has meant many new business opportunities. However, for others just starting, the growing convergence of various information technologies has left them without a clear understanding of these advances from a strategic viewpoint.

This book is a response to that need, providing a single source of both strategic and reference information for those embarking upon new electronic commerce and business communications initiatives. It is also intended as a useful point of reference for those studying the subject. In addition, the critical inter-dependence between business and information technology strategies is stressed throughout this book. For some organisations this requires the devel­opment of new working relationships between business managers and IT pro­fessionals, built upon a greater understanding and empathy from both sides.

Finally, the authors wish to acknowledge the contribution that electronic business communications has made to the preparation of this book, since they both work in separate organisations and are frequently in different countries. Put very simply, it would not have been possible to co-operate on this book project without such a capability.

Michael C Chesher m.chesher@kingston.ac.uk

Rukesh Kaura ricky kaura@chase.com

Contents

Part A

1. Business Context ................................................................................... 3 Introduction .............. ................. .............................. ........................... 3 Three Introductory Scenarios ............................................................... 3

Purchasing a Gift ................................................................................. 3 Sending Minutes of a Meeting ............................................................ 5 Small Business User ............................................................................. 6

People and Information Technology .................................................... 7 The Business Manager ........................................................................... 8 Competition ........................................................................................... 9

Case Study - Wincanton Logistics ................................................... 10 Speed/Time to Market ......................................................................... 12

Example - Financial Services ........................................................... 12 Example - Fashion Industry ............................................................. 13 Example - Office Supplies ................................................................ 13

Quality ................................................................................................... 14 Customer Service ................................................................................. 14

Example - Domestic Insurance ........................................................ 14 Example - Automotive After-market ............................................... 14

Business Productivity Improvements ................................................ 15

2. Organizational/Cultural Changes ...................................................... 17 From Downsizing to Rightsizing ........................................................ 17 Business Process Re-engineering ....................................................... 18 What is BPR? ......................................................................................... 19 Cultural Change ................................................................................... 20 IT and Empowerment .......................................................................... 21 Where BPR Fails ................................................................................... 22 BPR In Europe ...................................................................................... 22 Buzzword or Strategy ........................................................................... 23

3. Information Society and Technology Impact ................................... 25 Background ........... ....................................................................... ........ 25 Efficiency Improvements .................................................................... 25

Example - Hawker Siddeley Aviation .............................................. 26

vii

viii Electronic Commerce and Business Communications

Personal Effectiveness ....................................................................... 26 Competitive Edge ........................................................................ ,..... 27

Example - AA Sabre System ........................................................... 27 Example - American Hospital Supply Company......................... 27 Example - Benetton ........................................................................ 27 Example - DHL ................................................................................ 28

New Generation ................................................................................. 28 Information Society ........................................................................... 28

European Initiatives ........................................................................ 29 US Initiatives and the Internet ....................................................... 29 Initiatives in the Far East ................................................................ 30

Internet Shaping IT Strategies .......................................................... 31 Information Technology Trends ....................................................... 34

End User Computing ...................................................................... 34 Distributed Computing .................................................................. 35 Networking ....................................................................................... 36 Multimedia and the Web ................................................................. 36

Change and Information Technology .............................................. 37

4. Electronic Commerce Evolution ...................................................... 39 Introduction ....................................................................................... 39

Example - Retail Banking ............................................................... 40 Birth of Electronic Commerce .......................................................... 40 Messaging Technology ...................................................................... 42 Electronic Mail (E-mail) .................................................................... 43

Example - GE ................................................................................... 43 Electronic Data Interchange (ED!) ................................................... 44

Case Study - Henkel ........................................................................ 45 Application Messaging (AM) ............................................................ 46

Case Study - The Stationary Office ............................................... 47 Characteristics of Electronic Commerce ...................................... 48

Electronic Commerce from an IT perspective ................................ 48 Teleworking ........................................................................................ 49 Outsourcing of IT Functions ............................................................ 50 Internet - Removing the Barriers .................................................... 51 Convergence Between Domestic and Business Usage .................... 51 Values Added Network Services ....................................................... 52 Internet Service Providers ................................................................ 53 World Wide Web Creating Marketspaces ......................................... 54

PartB

5. Traditional Business Communications ........................................... 57 Working with Information ................................................................ 57 Media Choices .........................•.......................................................... 57

Historical perspective . ........ ......... ..... ... ......... .................................. 58 Factors Impacting Media Choices ................................................. 59

Contents ix

Patterns of Business Communications ............................................. 61 Post .............................................................................. ,....................... 63 Telex ..................................................................................................... 64 Telephone ............................................................................................ 64 Voicemail ............................................................................................. 65 Facsimile ............................................................................................. 66 Corporate Messaging in Evolution ................................................... 67

6. Introduction to Electronic Commerce ............................................. 69 Background ......................................................................................... 69 Electronic Mail for People (E-mail) .................................................. 70 The Standards Issue ........................................................................... 71 Electronic Mail to Telex, FAX and Postal Delivery.......................... 72 Universal Mailbox .............................................................................. 74 Electronic Mail Enabled Applications .............................................. 75 Electronic Data Interchange for Computer Applications ............... 75

Benefits of EDI ................................................................................. 76 Differing Characteristics of ED! ..................................................... 77 EDI Standards .................................................................................. 78 Transmitting EDI Messages ............................................................ 80

Application Messaging and CORBA ................................................. 82 Information Management (Notes, Exchange & Web) ..................... 84 Directory Services .............................................................................. 84 Organizational Considerations ......................................................... 87

7. Internet Dominance of Electronic Commerce ............................... 89 What is the Internet ............................................................................ 89 Overview of Internet Technologies ................................................... 90 Intranets and Extranets ..................................................................... 91

Various Examples ............................................................................. 92 Case Study - BT ................................................................................ 93 Case Study - Tyson Food ................................................................ 94

Internet Commerce Evolution ........................................... ................ 94 Electronic Marketplaces and the Web .............................................. 96

Basic Model ...................................................................................... 96 Business to Consumer (e-commerce) ............................................ 97 Case Study - Slate ............................................................................ 99 Business to Business (E-commerce) ............................................... 99 Case Study - GE Lighting .............................................................. 102

EDI over the Internet ....................................................................... 104 EDI Web Forms ................................................................................. 105 Security .............................................................................................. 105

8. Business Strategies for Electronic Commerce ............................... 107 Extended Enterprise > •••• ..................................................................... 107 Strategic Management & Information Technology....................... 109 Information Systems Development Framework ............................ 109

x Electronic Commerce and Business Communications

Macro Planning .............................................................................. 110 Micro Planning ................. ... .....................................................•..... III Information Analysis ................................................. ..................... III System Development Process ........................................................ 112

Approaches to the Integration of Business and IT Strategies ....... 112 Integration Summary ..................................................................... 114

Electronic Commerce Strategy Development ................................. 115 Business Driven ............................................................................... 115 Customer Focus .............................................................................. 115 The Extended Organization ........................................................... 116 Remaining Flexible ......................................................................... 116 Integration ....................................................................................... 116 Information and Knowledge .......................................................... 116

Key Supporting IT Strategies ........................................................... 117 Thick Architecture ..................... ............................... ...................... 117 Application Software Packages ...................................................... 118 Networking ...................................................................................... 118 Electronic Messaging ...................................................................... 118 Desktop Strategy ............................................................................. 118 Secutity ............................................................................................ 119 Key Supporting IT Strategies Summary....................................... 119

PartC

9. Open Systems ..................................................................................... 123 Introduction ...................................................................................... 123 Worldwide Problem .......................................................................... 124 Why Use Standards? .......................................................................... 126 What are Standards? ......................................................................... 127 De Jure Standards Makers ................................................................ 128 Internet Standards Process ............................................................... 129 What are Open Systems? ................................................................... 130 Operating Systems ............................................................................. 131 UNIX Standards Makers ................................................................... 132 Networking ........................................................................................ 133 New Meaning for Open Systems ...................................................... 134

10. Communications Fundamentals ..................................................... 135 Introduction ...................................................................................... 135 Computer Communications ............................................................. 136 The Telephone Analogy.................................................................... 137 Transferring a File ............................................................................. 138 Network Architectures ...................................................................... 139 Communications and Standards ..................................................... 140 OSI Network Architecture ...... :......................................................... 141 Internet TCPIIP Network Architecture ........................................... 141 Types of Connection ......................................................................... 143

Contents

Terminal Connections Modem Connections ..................................................................... . Digital Switching Technology ...................................................... . Popular Modem Standards ........................................................... . Permanent Connections ............................................................... . Asynchronous versus Synchronous ............................................ ..

Types of Network ............................................................................. . Integrated Services Digital Network (ISDN) ............................ .. Global Networks ............................................................................ . Local Area Networks (LAN) ........................................................ .. Wide Area Networks (WAN) ........................................................ .

Interworking .................................................................................... . File Transfer ................................................................................... . Terminal Emulation ...................................................................... . File Sharing .................................................................................... . Remote Logon ................................................................................ . Electronic Messaging ................................................................... ..

Interoperability ................................................................................ . Microwave and Satellite Communication ...................................... . High Performance Networking ...................................................... .

Fast Packet Switching ................................................................... .. Asynchronous Transfer Mode ...................................................... .

Summary .......................................................................................... .

11. Desktop Computing ........................................................................ .. Introduction ..................................................................................... . Moore's Law & Hardware Evolution .............................................. .. Reduced Instruction Set Computers (RISC) ................................ .. The Role of the Network .................................................................. .

Internet - The Pandora's Box ...................................................... .. Software Evolution ........................................................................... .

The Emergence of MS-DOS .......................................................... . Bridging the Cognitive Gap .......................................................... .

Network Operating Systems ........................................................... . David and Goliath ......................................................................... . Case Study - Windows ................................................................ ..

The Other Players ............................................................................ . Software Suites ................................................................................. .

Advantages ..................................................................................... . Disadvantages ................................................................................ . Evolution of the Suite .................................................................... .

12. Group-Working ................................................................................ . Introduction ..................................................................................... . The Evolution and Growth of Groupware ..................................... . Groupware Environments .............................................................. ..

Case Study - Lotus Notes ............................................................ ..

xi

143 143 144 144 145 146 147 147 149 149 149 150 150 150 150 151 151 151 151 152 152 153 154

155 155 155 156 158 159 160 160 161 162 163 164 165 166 167 167 168

169 169 170 171 171

xii Electronic Commerce and Business Communications

The Advent of the Intranet 172 Workflow Software/Computing ........................................................ 172 Links with Business Process Re-engineering (BPR) ....................... 173 Evolution of Workflow ....................................................................... 174 The Intelligent Agent .......................................................................... 174 The Information River ....................................................................... 175 Conferencing and Consensus Building Software ............................ 176 SchedulelDiary Software ................................................................... 176 Challenges with Scheduling Software ............................................... 177 Justifying and Implementing Groupware ........................................ 177 Groupware - Here to Stay .................................................................. 178 Videoconferencing ............................................................................. 178

Growth ofVideoconferencing ......................................................... 179 Videoconferencing on the Desktop ................................................ 179 Videoconferencing - Glorified Videophone? ................................ 180 Applications of :Videoconferencing ............................... ................. 180 The Value ofVideoconferencing ..................................................... 181

13. Security ............................................................................................... 183 The Elusive Search for Security ......................................................... 183 Introduction ........................................................................................ 183 Computer Fraud ................................................................................. 184 Passwords ............................................................................................ 185 Securing Electronic Commerce .,...................................................... 186 What is Cryptography ........................................................................ 187 The Use of Keys .................................................................................. 188 Algorithms ......................................................................................... 189

Data Encryption Standard (DES) ................................................... 189 Rivest-Shamir-Adleman (RSA) ..................................................... 190 International Data Encryption Algorithm (IDEA) ....................... 191

Authentication and Integrity Checks ............................................... 191 Digital Signatures and Repudiation ................................................. 191 Finding the Key - A Question of Management ................................ 192

Certificates, Certification Authorities and Revocation Lists ........ 192 Some Legal Consequences .............................................................. 194

The CAPSTONE Project ..................................................................... 194 The "Clipper" Chip ........................................................................... 195 The Digital Signature Standard ...................................................... 196 Secure Hash Standard (SHS) .......................................................... 197

Securing the Internet ......................................................................... 197 Internet Privacy Enhanced Mail ..................................................... 197 Secure MIME (S/MIME) .................................................................. 198 Pretty Good Privacy (PGP) ............................................................. 199

Securing the Web ................................................................................ 199 Secure Sockets Layer (SSL) ..... ,....................................................... 199 Secured HTTP (S-HTTP) ................................................................ 200 Securing Credit Card Transactions ............................... ................. 200

Contents xiii

The Firewalls 201 Screening Router ............................................................................ . 201 Gateway ........................................................................................... . 201 Screened Host Gateway ................................................................. . 201

Security of the Future ..................................................................... .. 202 Biometric Security ......................................................................... . 202 Fingerprint Analysis ...................................................................... . 203 Retina Scan Analysis ...................................................................... . 203 Voice Analysis ................................................................................. . 203

14. Standards in Electronic Commerce (1) .......................................... . 205 Introduction ..................................................................................... . 205 Electronic Mail - E-mail ................................................................. .. 205 X.400 - Inter Personal Messaging .................................................. .. 206

The Postal Analogy and XAOO ...................................................... . 207 X.400 Terminology ........................................................................ .. 208

Internet Standards ............................................................................ . 209 SMTP/MIME - Electronic Mail ................................................... .. 210 POP and IMAP - Message Access Protocols ................................ . 211 DNS - Directory Name Service ................................................... .. 212

Internet and XAOO Service Models ................................................ .. 213 Internet and X.400 E-mail Co-existence ........................................ . 213 EDI Standards ................................................................................... . 214

EDI Message Structure ................................................................. .. 214 Operation of ED I ............................................................................ . 216 EDI Standards Summary .............................................................. .. 216

EDI and X.400 ................................................................................... . 217 EDI and Internet ............................................................................... . 220 X.SOO Directory and LDAP ............................................................. .. 221

15. Standards in Electronic Commerce (2) ......................................... .. 225 Introduction ...................................................................................... . 225 The Myth ........................................................................................... . 225 Object Linking and Embedding (OLE) .......................................... .. 226 OpenDoc ........................................................................................... . 227 Open Document Architecture (ODA) ............................................. . 227 Mark-up Languages ......................................................................... . 228

SGML ............................................................................................... . 228 HTML .............................................................................................. . 229 XML ................................................................................................ .. 229

Translation Devices .......................................................................... . 230 Platform Interchange ....................................................................... . 230 Collaborative Environments .......................................................... .. 230 Open Collaborative Environment (OCE) ....................................... . 231

Messaging ........... ; ........................................................................... . 231 Directory Services .......................................................................... . 232 Security Services ............................................................................ . 232

xiv Electronic Commerce and Business Communications

Compression Techniques .................................................................. 233 Lossless Compression .................................................................. ~. 233 Lossy Compression ......................................................................... 234 New Advances in Compression Techniques .................................. 234

Multi-media Standards ..................................................................... 235 Standards in Multimedia Coding ..................................................... 236

16. Mobile Computing ............................................................................. 237 Nomads of the Future ........................................................................ 237 The Next Generation of Hardware ................................................... 238 Electronic Personal Assistants .......................................................... 238

Case Study - The Apple Newton MessagePad .............................. 239 PCMCIA - The Smart Card .............................................................. 241

Growth of PCMCIA Cards .............................................................. 242 Cutting the Umbilical Cord ............................................................... 242

Paging Networks ............................................................................. 244 Wireless Local Area Network (LAN) ............................................. 244 Wireless MAN/WAN (Metropolitan/Wide Area Network) .......... 244 Cellular Technology ........................................................................ 244 Satellite Technology ........................................................................ 244

Who is using Wireless Networks, and Why? .................................... 245 Remote Access .................................................................................... 247

Remote Control ............................................................................... 247 Remote Client (RC) ......................................................................... 248

The Future of Wireless Networks ..................................................... 249

Reference List 251

PartD

Acronyms and Glossary 257

Index ........................................................................................................... 269