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Principles and Learning Objectives• E-commerce is a new way of conducting business, and as with any
other new application of technology, it presents both opportunities for improvement and potential problems.
• E-commerce requires the careful planning and integration of a number of technology infrastructure components.
• An organization’s transaction processing system (TPS) must support the routine, day-to-day activities that occur in the normal course of business and help a company add value to its products and services.
• Implementation of an enterprise resource planning (ERP) system enables a company to achieve many benefits by creating a highly integrated set of systems.
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Ebake.com
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Revenue Paradigm
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Business advantages of B2B include:
Sales
- Cost of goods sold
Gross ________
- Expenses
Net ________
– Managing __________ more efficiently– Adjusting more _________to customer demand– Getting ___________to market faster– Obtaining __________ prices on supplies
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Business advantages of B2C include:
– Access to a wider __________ of products and services
– Access to products at lower costs
– __________ for transactions or for obtaining information Sales
- Cost of goods sold
Gross margin
- Expenses
Net income
Ebake.com
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The E-Commerce Supply Chain
Figure 5.1: Supply Chain Management
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The E-Commerce Supply Chain (continued)
• E-commerce supply chain management allows businesses an opportunity to achieve:– Increased __________ and decreased costs– Improved customer satisfaction– Inventory_________ across the supply chain
– Amazon Distribution
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Mobile Commerce
• Mobile commerce ( _________ ) relies on the use of wireless devices, such as personal digital assistants, cell phones, and smart phones, to place orders and __________ business
• Issues confronting m-commerce– User-friendliness of the _________ device– Network speed– Security
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Mobile Commerce (continued)
• Handheld devices used for m-commerce have limitations that complicate their use
• Wireless application protocol (WAP): a standard set of specifications for Internet __________ that run on handheld, wireless devices
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E-Commerce Applications
• Retail and Wholesale
• Manufacturing
• Marketing
• Investment and Finance
• Auctions
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E-commerce Technology, Infrastructure, and Development
Figure 5.4: Key E-Commerce Technical Components
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Hardware
• Storage capacity and computing power required of the Web server depends on:– _________ that will run on the server– Volume of e-commerce transactions
• Web __________ hosting
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Software
• Security and identification
• Retrieving and __________ Web pages
• Web page construction– Static Web page– Dynamic Web page
• E-commerce software must support:– Catalog __________ – Product configuration– Shopping-cart facilities
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Electronic Payment Systems
• Electronic cash
• Electronic wallets
• Smart cards
• Credit cards
• Debit cards
• Charge cards
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An Overview of Transaction Processing Systems
• Provide data for other __________ processes:– Management information system/decision support
system (MIS/DSS)– Special-purpose information systems
• Process the detailed data necessary to update records about the fundamental business operations
• Include order entry, inventory control, payroll, accounts __________ , accounts receivable, and the general ledger.
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An Overview of Transaction Processing Systems (continued)
Figure 5.6: TPS, MIS/DSS, and Special Information Systems in Perspective
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Traditional Transaction Processing Methods and Objectives (continued)
Figure 5.7: Batch Versus Online Transaction Processing
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Transaction Processing Activities
• TPSs– Capture and process data that describes fundamental
business transactions– Update databases– Produce a variety of reports
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Transaction Processing Activities (continued)
Figure 5.8: Data Processing Activities Common to TPSs
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Basic TPS Applications
Table 5.4: Systems That Support Order Processing
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Order Processing Systems
• Order entry
• Sales configuration
• Shipment planning
• Shipment execution
• Inventory control
• Invoicing
• Customer relationship management
• Routing and scheduling
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Order Processing Systems (continued)
Figure 5.10: Order Processing Systems APL Fulfillment
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Purchasing and Accounting Systems
• Purchasing transaction processing systems include:– Inventory control– Purchase-order processing– Receiving– Accounts payable
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Purchasing and Accounting Systems (continued)
• Accounting transaction processing systems include:– Budget– Accounts receivable– Payroll– Asset management– General ledger
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Purchasing and Accounting Systems (continued)
Figure 5.11: Integration of a Firm’s TPSs
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TPS Control and Management Issues
• Business continuity planning
• Transaction Processing System Audit
• International Issues ( GLOBAL LOGISTICS )
– Different _________ and cultures– _________ in IS infrastructure– Varying laws and customs rules– Multiple _________
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An Overview of Enterprise Resource Planning
• Enterprise resource __________ (ERP) systems are used in large, midsized, and small companies
• Real-time monitoring of business functions
• Timely analysis of key __________ , such as quality, availability, customer satisfaction, performance, and profitability
• IN Tech We trust
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An Overview of Enterprise Resource Planning
• Steps in running a manufacturing organization using an ERP system:– Develop _________ forecast– Deduct demand forecast from inventory– Determine what is needed for production– Check _________ for needed raw materials– Schedule _________– Assess need for additional production resources– Financial forecasting
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Advantages of ERP
• __________ of costly, inflexible legacy systems
• Improvement of work processes
• Increase in access to data for operational decision making
• __________ of technology infrastructure
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Disadvantages of ERP
• Expense and time in implementation
• __________ implementing change
• Difficulty integrating with other systems
• Risks in using one __________ Risk of implementation failure