2

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.

3

Ebake.com

4

Revenue Paradigm

5

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

6

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

7

The E-Commerce Supply Chain

Figure 5.1: Supply Chain Management

8

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

9

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

10

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

11

E-Commerce Applications

• Retail and Wholesale

• Manufacturing

• Marketing

• Investment and Finance

• Auctions

12

E-commerce Technology, Infrastructure, and Development

Figure 5.4: Key E-Commerce Technical Components

13

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

14

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

15

Electronic Payment Systems

• Electronic cash

• Electronic wallets

• Smart cards

• Credit cards

• Debit cards

• Charge cards

16

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.

17

An Overview of Transaction Processing Systems (continued)

Figure 5.6: TPS, MIS/DSS, and Special Information Systems in Perspective

18

Traditional Transaction Processing Methods and Objectives (continued)

Figure 5.7: Batch Versus Online Transaction Processing

19

Transaction Processing Activities

• TPSs– Capture and process data that describes fundamental

business transactions– Update databases– Produce a variety of reports

20

Transaction Processing Activities (continued)

Figure 5.8: Data Processing Activities Common to TPSs

21

Basic TPS Applications

Table 5.4: Systems That Support Order Processing

22

Order Processing Systems

• Order entry

• Sales configuration

• Shipment planning

• Shipment execution

• Inventory control

• Invoicing

• Customer relationship management

• Routing and scheduling

23

Order Processing Systems (continued)

Figure 5.10: Order Processing Systems APL Fulfillment

24

Purchasing and Accounting Systems

• Purchasing transaction processing systems include:– Inventory control– Purchase-order processing– Receiving– Accounts payable

25

Purchasing and Accounting Systems (continued)

• Accounting transaction processing systems include:– Budget– Accounts receivable– Payroll– Asset management– General ledger

26

Purchasing and Accounting Systems (continued)

Figure 5.11: Integration of a Firm’s TPSs

27

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 _________

28

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

29

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

30

Advantages of ERP

• __________ of costly, inflexible legacy systems

• Improvement of work processes

• Increase in access to data for operational decision making

• __________ of technology infrastructure

31

Disadvantages of ERP

• Expense and time in implementation

• __________ implementing change

• Difficulty integrating with other systems

• Risks in using one __________ Risk of implementation failure