Management Information Systems, Sixth Edition: The Web-Enabled Enterprise

Management Information Systems, Sixth Edition
Chapter 8: The Web-Enabled Enterprise
Objectives
Describe how the Web and high-speed Internet connections are changing business operations Explain the functionality of various Web technologies Compare and contrast options for Web servers Explain basic business-to-business and business-to-consumer practices on the Web Explain the relationship between Web technologies and supply chain management
Management Information Systems, Sixth Edition 2
Objectives (continued)
Give examples of features and services that successful business Web sites offer Learn about online annoyances such as spam and adware, and how to protect against online identity theft
Web Business: Growing and Changing

DLA Piper LLP is the second largest law firm in the world
3200 lawyers in 24 countries and 63 offices around the world Uses eRoom, a Web-based collaboration and document-sharing tool from EMC Corp. Saves 15,000 labor hours annually, uses and mails significantly fewer paper documents, and reduces redundant work
Web Technologies: A Review

Several standards and technologies enable the Web to deliver rich information, including:
HTTP, HTML, XML File Transfer RSS Blogs Wikis Podcasting IM Cookies
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HTTP
Hypertext Transfer Protocol (HTTP): transfer and download Web information HTTPS: HTTP secure for confidential data exchange Uniform Resource Locator (URL): unique address given to each Web site
IP address: a special numeric address
Domain name: unique name for a Web site, constructed with letters
URL also refers to the domain name
HTML and XML

Hypertext Markup Language (HTML): helps developer create Web pages
Determines look and location of content
Extensible Markup Language (XML): enables creation of various data types

Conveys the meaning or content of the data
XHTML: combination of XML and HTML

Uses opening and closing tags to control format
File Transfer
File Transfer Protocol (FTP): used to transmit whole files
Used in all downloads from Web sites Any type of file can be transferred Can place files on a server for shared use Often used to deliver purchased software products on Web sites
RSS
Really Simple Syndication (RSS): family of XML file formats that allow automatic downloads of content on a subscription basis
Helps users check for updates Communicates short descriptions of content Allows transmittal of new information Useful on news Web sites Also called Rich Site Summary
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Blogs
Blog: contraction of Web log
Invites surfers to post opinions and art Focuses on a topic or set of topics Trackback: a tool that notifies bloggers when their posts have been mentioned elsewhere on the Web
Blogs are often used by businesses Importance of blogs to commercial organizations is to find out what blog participants think and say about the organization
Wikis
Wiki (from Hawaiian, meaning quick): Web application that enables users to add to and edit the contents of Web pages
All the software required to edit the Web pages is embedded in the pages themselves
Wikipedia: a popular online encyclopedia Wiki technology is a popular ingredient in groupware (software used for collaboration)
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Podcasting
Podcast: publishing sound and video on the Web for download
Usually on a subscription basis
Uses include:
Time-shifted broadcast of radio station programs for later listening Audio tours in museums Lectures in distance learning courses Garageband.com
Allows aspiring musicians to post music tracks
Instant Messaging
Instant messaging (IM): real-time chat
Form of synchronized e-mail Chat room: communicate with a group Free applications for IM include:
AIM: AOL instant Messenger Yahoo Messenger MSN Messenger ICQ Trillian
Business uses
Customers can chat with sales or support reps
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Cookies
Cookie: small file that stores information about a Web site visitor, stored on the visitors computer
Usually records the surfers ID Often stores the surfers preferences Provides convenience to consumers Can be temporary (single session) or permanent Potential for intrusion into surfer privacy
Clickstream tracking: tracks a surfers clicking activities Spyware: traces and reports online behavior
Proprietary Technologies
Proprietary technology: intellectual property of developer, not free for all to use Examples:
Local search engine Shopping cart applications Wish lists Video streaming tools Tools to analyze and predict Web visitor behavior, especially shopper behavior
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Web-Enabled Business
Web-enabled business are classified according to the interacting parties:
Business-to-business (B2B) Business-to-consumer (B2C) Government-to-business Government-to-consumer
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B2B Trading
Business-to-business (B2B): trading between businesses only B2B forms include advertising through:
Search advertising: advertisements placed on a search site result page Banners: images placed on Web sites that link to a company site selling a product or service
Impression: occurs when a page with a banner is downloaded Reach percentage: the percentage of Web users who visited a site in the past month
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B2B Trading (continued)

Exchanges and auctions act as online marketplaces Intranet: network used only by employees of an organization Extranet: network shared by employees of different organizations, usually business partners Exchange: extranet for organizations that deal in products and services of a particular type
Exchange operator profits from transaction fees
Auction: sells a great variety of items

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B2B Trading (continued)

Online business alliances: collaboration between businesses in establishing a Web site
Site operator works for the allied companies Suppliers are invited to sell through the site and compete among themselves, driving prices down
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B2C Trading
Business-to-consumer (B2C): trading with the general public E-Tailing: online retailing to consumers Fulfillment activities: picking, packing, shipping Consumer profiling: know customers better by gathering information about their online activities
Some consider this a violation of privacy
Conversion rate: the proportion of site visitors who make a purchase

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B2C Trading (continued)

Auction sites serve as a hub for consumers to buy and sell Reverse auction: customers name their own price for desired goods and services Content providers: offer information, artistic work, classified ads, and video Electronic bill presentment and payment (EBBP): provides online bills and payment options for customers Phishing: type of fraud involving a fake Web site
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Extra-organizational workforce:
Companies purchase labor from a larger pool
Mobile commerce, or M-commerce:

Business conducted on mobile devices
Many experts believe that information delivery is the main mobile application, not commerce
Exceptions are Japan and South Korea Japans DoCoMos i-mode service allows users of smart cell phones to purchase canned soda from vending machines, fast food

M-commerce also raises privacy concerns
GPS provides location tracking
New top-level domain names with .mobi available for mobile applications
Sites should use special technologies to optimize content for easy viewing on mobile devices
Virtual world: a combination of images, video, sound, and avatars that resemble the real world
Accessible for interaction by subscribers
Avatar: 3D graphical character that represents a user in a virtual world

Supply Chains on the Web

Supply chain management (SCM) systems may be connected to the Web to allow suppliers to participate directly
Use of XML allows companies to set standards for data exchange
Electronic Data Interchange (EDI): a system used prior to the Web to exchange documents electronically
Set standards for data formats EDI networks are owned and managed by valueadded network (VAN) companies
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Options in Establishing a Web Site

Web site: Web pages that make up information and links Internet server: a computer connected to the Internet backbone Businesses have two choices for a Web site:
Installing and maintaining their own Web servers Contracting with a Web hosting service
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Owning and Maintaining a Server

Owning and maintaining Web servers is costly
Provides the greatest degree of control, but requires expertise to set up and maintain Must obtain a high-speed link to the Web
Load balancing: transfer data requests from a busy server to a less busy server Mirror servers: servers with duplicated content Pure-play: company whose entire business is online Brick-and-mortar: company that owns physical stores and a Web site
Using a Hosting Service

Web hosting: Web server managing service Several types of Web hosting:
Shared hosting: stores the clients Web site on the same physical server as other clients Virtual private hosting: simulates a single server, allowing a client to have its own domain name Dedicated hosting: client has exclusive use of an entire physical Web server Co-location: server owned and managed by a client is co-located with other clients servers in a secure physical location
Considerations in Selecting a Web Host

Compare host vendors using a point system Dynamic Web pages: enable communication between browser and database Factors to consider when selecting Web host:
Allows use of database management system Storage space capacity Technical and Web site design support Scalability Security: physical and virtual
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Considerations in Selecting a Web Host (continued)

Factors to consider when selecting Web host (continued):
Availability: minimize downtime Costs, including:
Setup fees Traffic-based fees Monthly fees
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More Than Meets the Eye

Several elements are essential to conducting business on the Web:
Inquiry interface: connects to database to allow user to search a catalog of products or services Order processing application, including:
Credit-card verification application
Order-fulfillment system: picks, packs, and ships
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Rules for Successful Web-Based Business

Business success depends on availability and use of software Elements needed to support B2C commerce:
Targeting customers Capturing the customers complete experience Personalizing the service Shortening the business cycle Let customers help themselves Be proactive and de-commoditize
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Target the Right Customers

Target customers needing your products and services
Most important effort of marketing
Involves identifying the sites that your audience frequently visits Consider blogs and podcasting sites for advertisement placement
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Capture the Customers Total Experience

Use cookies to record shoppers movements within the site Use CRM software to create consumer profiles Shopper experience becomes an asset of business, allowing:
Fine-tuning of the product portfolio Tailoring of Web pages to individual customers Individual e-mails to shopper offering products of interest
Personalize the Service

CRM software and Web page customization software can be combined to:
Personalize Web pages shown to a customer Allow the customer to select the type of e-mail content desired Respect visitor privacy by offering opt-in rather than opt-out Allow the customer to tailor products to be purchased
Shorten the Business Cycle

Business on the Web saves time for customers Fulfillment is a major challenge for businesses
Activities after customer places order
Fast shipping is desired because:

It produces higher customer satisfaction Business collects payments faster
Can outsource the entire fulfillment task to fulfillment organizations such as:
UPSs e-Logistics FedExs Supply Chain Services
Let Customers Help Themselves

Customers need information from organization:
Status of order Status of shipped item Installation instructions Troubleshooting
E-mail messages sent to customers with information about orders and how to track them FAQs online allow customers to find answers to common questions
Be Proactive and De-Commoditize

Prompt e-mail replies expected Proactive alerts expected for changes in orders or services, or product recalls Automatic reordering features are desirable Must take initiatives to de-commoditize products
Commodity: a product sold at roughly the same price by many vendors (no differentiation) Addition of features or services prevents a product from becoming a commodity by creating differentiation
E-Commerce is Every Commerce

Web technologies have been highly integrated into the business world
Difficult to identify which business activities are on the Internet and which are not
Web has been highly integrated into daily activities of customers also Commerce and e-commerce generally have the same meaning today
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Summary
Some industries have changed drastically because of the Web HTTP is an Internet standard controlling Web server addresses HTTPS is a security version of HTTP XML is a standard for description of data Blogs enable people to create discussion Web pages
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Summary (continued)
Cookies help Web sites personalize the visitors experience Many Web technologies are proprietary A business can maintain its own Web server or use a Web hosting service Organizations should consider several factors when selecting a Web host Web-enabled commerce is classified into B2B and B2C
Summary (continued)
B2B trading relies on electronic data interchange (EDI) and XML Wireless handheld computers allow mobile commerce, called m-commerce Online businesses must adhere to several factors to be successful Virtual worlds provide a means to meet and conduct business and social activities on the Web Spam and spyware are online annoyances Phishing is a pervasive fraud crime

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Management Information Systems, Sixth Edition

Chapter 8: The Web-Enabled Enterprise