Chapter 7 E-Commerce: The Internet, Intranets, and Extranets

1. Chapter 7E-Commerce: The Internet, Intranets, and Extranets Management Information Systems, 3rd Edition Effy Oz

2. Learning Objectives • When you finish this chapter, you will • Explain what the Internet is. • List the features for information exchange that can be conducted over the World Wide Web. • Explain how the Web facilitates electronic commerce. • Explain basic business models on the Web. • Describe the major risks and limitations of using the Web for business activities. Management Information Systems, 3rd Edition Effy Oz

3. What is the Internet? • The Development of the Internet • ARPANET was an open system designed for the free flow of information, but available only to members of academic institutions and some in the defense industry. • U.S. government decided to split the network into a civilian one and a military one. • Civilian network became the Internet • Internet is now a network of networks. Management Information Systems, 3rd Edition Effy Oz

4. Figure 7.1 The Internet connects millions of servers. What is the Internet? Management Information Systems, 3rd Edition Effy Oz

5. What is the Internet? • Growth of the Internet • Physically, a network of communications media • Millions of computers are connected to it • Major line of communication is called the backbone. • A network of copper lines, optical fibers, and radio satellites • The backbone is owned, augmented, and maintained by telecommunications companies and Internet service providers such as: • Verizon, Sprint, AOL, etc. Management Information Systems, 3rd Edition Effy Oz

6. What is the Internet? Management Information Systems, 3rd Edition Effy Oz

7. What is the Internet? Management Information Systems, 3rd Edition Effy Oz

8. Internet Domains • Domain Names • Unique name assigned to IP number • IP number: Every machine on the Internet backbone is uniquely identified with a numerical label. • Domain names are registered by one of a group of companies authorized to assign unique names. • These companies must use the same central database (maintained by Network Solutions, Inc.) to make certain each name is unique. Management Information Systems, 3rd Edition Effy Oz

9. Internet Domains Management Information Systems, 3rd Edition Effy Oz

10. Internet Domains • Static and Dynamic IP Numbers • Static IP number • Permanent IP number assigned to Servers and many other computers and devices. • Dynamic IP number • Intermittent connection to the Internet will be assigned a temporary IP number for duration of its connection only. Management Information Systems, 3rd Edition Effy Oz

11. Internet Domains • What’s on the Internet? • E-mail and File Transfer • File Transfer Protocol (FTP) • News Groups • Post information on servers than can then be accessed by others sharing same interests. • Internet Relay Chat (IRC) • Real-time online interactivity • Also called instant messaging • Internet Telephoning • Conducting long-distance and international conversations via Internet connections Management Information Systems, 3rd Edition Effy Oz

12. The World Wide Web • Hypertext transfer protocol (HTTP) • Determines how data in files (text, images, animation, or sound) should be coded, transferred, and viewed on the Internet. • Browsers • Special software designed to search the Web for specific sites and retrieve information (text, pictures, sound, and animation.) Management Information Systems, 3rd Edition Effy Oz

13. The World Wide Web • Web Software • Hypertext Mark-Up Language (HTML) • Code for tagging Web files for display • Web page editors • Translate well-known or intuitive commands into code • Java, JavaScript, ActiveX • Web scripting languages • XML (Extensible Markup Language) • A programming language that tags data elements in order to indicate what the data mean. Management Information Systems, 3rd Edition Effy Oz

14. The World Wide Web • Common Gateway Interfaces (CGI) • Software that lets users interact with servers. • Virtual Reality Modeling Language (VRML) • Standard for describing interactive three-dimensional scenes delivered across the Internet. Management Information Systems, 3rd Edition Effy Oz

15. Figure 7.6 How a CGI works The World Wide Web Management Information Systems, 3rd Edition Effy Oz

16. The World Wide Web • Cookies • Small file a Web site places on a visitor’s hard disk so the site can remember something about the surfer later • Creating Your Own Web Pages • Search the Web for HTML tutorials • View and study the source document of a Web page Management Information Systems, 3rd Edition Effy Oz

17. Intranets and Extranets • Intranet • A within-organization computer network that uses Internet technologies to communicate • Extranet • Uses Internet technologies to facilitate communication and trade between an organization and its business partners, such as suppliers Management Information Systems, 3rd Edition Effy Oz

18. Figure 7.7 An intranet, an extranet, and the Internet from an individual user’s perspective Intranets and Extranets Management Information Systems, 3rd Edition Effy Oz

19. Figure 7.8 Internet, intranet, and extranet potential for productivity enhancement Intranets and Extranets Management Information Systems, 3rd Edition Effy Oz

20. Establishing an E-Commerce Web Site • Businesses have several options when establishing a Web site • Install own server • Dedicated Server • Contract an ISP site • Contract a Web portal • Portal is a site that enjoys heavy traffic and often offers a search engine and general information • www.yahoo.com; www.lycos.com; www.msn.com, etc. Management Information Systems, 3rd Edition Effy Oz

21. Establishing an E-Commerce Web Site • Options (continued) • Establish an electronic storefront • Virtual shopping mall on the Web • Contract with a Web hosting service • Use a virtual Web server • Domain name points to server of another company • Set up a subdomain Management Information Systems, 3rd Edition Effy Oz

22. Establishing an E-Commerce Web Site Management Information Systems, 3rd Edition Effy Oz

23. Establishing an E-Commerce Web Site Management Information Systems, 3rd Edition Effy Oz

24. E-Commerce Practices on the Internet • Business-to-Business Trading • Electronic Data Interchange (EDI) • Exchange of business information via computer networks. • Exchanges and Auctions • Exchange: Buyer may negotiate price with seller and negotiation is not done through public bidding • Auctions: bidders compete for what is offered with higher and higher bids until a deadline. • Online Business Alliances • Companies operating in the same industry with a purpose of setting prices for purchased products and services for the whole group. • Application Service Providers (ASP) • Rental of software Management Information Systems, 3rd Edition Effy Oz

25. E-Commerce Practices on the Internet • Business-to-Consumer Trading • Advertising • Traffic volume • Portals Management Information Systems, 3rd Edition Effy Oz

26. E-Commerce Practices on the Internet Management Information Systems, 3rd Edition Effy Oz

27. E-Commerce Practices on the Internet • Business-to-Consumer Trading • E-Retailing • Convenience • Time saving • Comparative shopping Management Information Systems, 3rd Edition Effy Oz

28. Figure 7.14 Web-shopping benefits E-Commerce Practices on the Internet Management Information Systems, 3rd Edition Effy Oz

29. E-Commerce Practices on the Internet • Business-to-Consumer Trading (continued) • Auctions and Reverse Auctions • Software Sales • Stock Trading Management Information Systems, 3rd Edition Effy Oz

30. E-Commerce Practices on the Internet • E-Government • Government-to-citizen transactions • Government-to-government transactions • Government-to-business transactions • Web Demographics • People who have access to the Internet represent less than one-tenth of the world’s population (6.1 billion). • Internet is still not a truly universal communications tool Management Information Systems, 3rd Edition Effy Oz

31. E-Commerce Practices on the Internet Management Information Systems, 3rd Edition Effy Oz

32. Figure 7.16 Do’s and Don’ts in Web site construction for commercial purposes E-Commerce Practices on the Internet Management Information Systems, 3rd Edition Effy Oz

33. E-Commerce Practices on the Internet • Rules for Successful Online Business Transactions • Target the Right Customers • Own the Customer’s Total Experience • Personalize the Service • Shorten the Business Cycle • Let Customer’s Help Themselves • Be Proactive Management Information Systems, 3rd Edition Effy Oz

34. E-Commerce Practices on the Internet • Successful Business Models • Among the most successful we find the following types. • Niche retailing • Sellers of hard-to-obtain information • Click-and-mortar retailing Management Information Systems, 3rd Edition Effy Oz

35. E-Commerce Practices on the Internet • M-Commerce (Mobile commerce) • Mobile devices need to use a special protocol to enable conversion of HTML (XML and other Web standards) into formats to display on mobile devices • Wireless Access Protocol – most common • Privacy Issue • Commercial organizations can track you as long as your mobile device is on. Management Information Systems, 3rd Edition Effy Oz

36. Ethical and Societal Issues:Online Free Speech • Objectionable Materials • Adult-oriented material, defamatory and violent content • Controversy over what may or may not be communicated through the Internet has much to do with culture and law. • How do operators of a Web site please the legal system of their worldwide audiences • Anti Domains • Domain secured by people who wish to voice dissatisfaction with a commercial or political organization. • Spamming • Flooding a party’s e-mail box with messages as a means of protest is disruptive. Management Information Systems, 3rd Edition Effy Oz