ENSN201 – Enterprise Social Networks

Version 2 – 18th December 2015

Resource Material
Electronic Commerce, 12th Edition
Gary Schneider
ISBN-10: 1305867815 | ISBN-13:
9781305867819 © 2017
Cengage Learning Australia
Week 5 : Chapter 9
Electronic Commerce Software
Learning Objectives
In this chapter, you will learn:
• How to find and evaluate Web-hosting services
• What functions are performed by electronic commerce software
• How electronic commerce software works with database and ERP
software
• What enterprise application integration and Web services are and
how they can be used with electronic commerce software
Learning Objectives (cont’d.)
• Which types of electronic commerce software are used by small,
medium, and large businesses
• How electronic commerce software works with customer
relationships management, knowledge management, and supply
chain management software
Basic Functions of Electronic
Commerce Software
• All electronic commerce solutions must provide
• Catalog display, shopping cart capabilities and transaction processing
• Larger complex sites may include software with added features and
capabilities
Catalog Display Software
• Catalog organizes goods and services being sold
• May organize by logical departments
• Web store advantage is a single product may appear in multiple categories
• Catalog is a listing of goods and services
• Static catalog is a simple list written in HTML
• Must edit HTML to add or delete items
• Dynamic catalog stores information in a database with photos, detailed
descriptions and a search tool for locating item and determining availability
• Both located in third tier of Web site architecture
Shopping Cart Software
• Early electronic commerce used forms-based shopping
• Shoppers selected items by filling out online forms which was awkward if
ordering more than one or two items and error prone
• Electronic shopping carts are now standard
• Keep track of items customer selected and allows them to view cart contents,
add and remove items
• Ordering requires a simple click which executes the purchase transaction
• Screen asks for billing and shipping information
Shopping Cart Software
(cont’d.)
• Web is a stateless system that does not retain information from one
transmission to another
• Shopping cart software must store information
• Cookies allows information to be stored and retrieved
• If browser does not allow cookie storage software automatically assigns temporary
number
• Dynamic pricing management software adjusts prices in real time
based on variables seller chooses
• Promotion management software allows sellers to create special
offers on specific products
Shopping Cart Software
(cont’d.)
• Fulfillment integration software connects seller’s shopping cart to
fulfillment provider’s computer
• Shipping automatically triggered at completed sale
• Product review management software allows customers to post
reviews of products
• Product recommendation triggers are tools that respond to
customer’s product selection
• Provides suggestions for related products, refills
• Abandoned cart management software enables shopping cart to be
retained for later when customer session is terminated
 © Cengage Learning 2017
FIGURE 9-1 Typical shopping cart page
Transaction Processing
• Occurs when shopper proceeds to virtual checkout counter by
clicking the checkout button
• Electronic commerce software performs calculations
• Web browser software and seller’s Web server software switch into
secure communication state
• Electronic commerce software communicates with accounting software sales
and inventory modules
• FedEx and UPS shipping rate software integrates with electronic commerce
software
• Other calculations include coupons, promotions, time-sensitive offers
 © Cengage Learning 2017
FIGURE 9-2 Basic electronic commerce site architecture

13
How Electronic Commerce Software
Works with Other Software
• Most large companies with electronic commerce operations also
have substantial business activity unrelated to electronic commerce
• Important to integrate electronic commerce activities into the company’s
other operations
• Basic information system element is a collection of databases
 Databases
• Highly structured information stored on a computer
• Business rules are how the company does business
• Database management software allows users to enter, edit, update,
retrieve database information
• Distributed information systems are large systems storing data in many
different physical locations
• Distributed database systems are databases within distributed information
systems
• MySQL database is open-source software owned by Oracle and
maintained by group of programmers
Middleware
• Middleware takes sales and inventory shipments information from
electronic commerce software
• Transmits to accounting and inventory management software
• Companies can write their own or purchase customized middleware
• Interoperability is making information systems work together
• Middleware cost range is $30,000 to several millions
• Depending on complexity and existing systems
Enterprise Application
Integration
• Application software (application) is a program that performs specific
function like creating invoices
• Application server (computer) takes request messages received by
Web server
• Runs application program performing action based on request message’s
contents
• Actions determined by business logic rules such as verifying customer
password upon log in
• Enterprise application integration is a creation of links among
scattered applications so business logic can be interconnected
Enterprise Application
Integration (cont’d.)
• As information is transferred from one application to another
program data formats differ
• Must edit and reformat often using XML data feeds
• Page-based application systems return pages generated by scripts
containing rules
• Present data on Web page with the business logic
• Component-based application systems separate presentation logic
from business logic
• Logic components created and maintained separately
• Updating and changing system elements much easier
Integration with ERP Systems
• Enterprise resource planning (ERP) software are business systems
integrating all facets of a business
• Accounting, logistics, manufacturing, marketing, planning, project
management, and treasury functions
• Two major ERP vendors: Oracle and SAP
• ERP software installation costs between $1 million and $10 million for a
midsize company
• Smaller online businesses can purchase products like NetSuite that
offer ERP system subscriptions
• Called software as a service (SaaS)
 © Cengage Learning 2017
FIGURE 9-3 ERP system integration with EDI
Web Services
• Software systems supporting interoperable
machine-to-machine interaction over a network
• Set of software and technologies allowing computers to use the Web to
interact with each other directly
• Does not require human operators directing the specific interactions
• Application program interface (API) is a general name for the ways
programs interconnect with each other
• Web APIs: interaction over the Web
What Web Services Can Do and
How Web Services Work
• Offer improved customer service, reduced costs
• Transmit XML-tagged data from one enterprise integrated application
to another
• Provide data feeds between two different companies
• Programmers write software accessing business application logic
units without knowing details
• Allows communication between programs written in different languages on
different platforms
• Example task: transaction processing
• Can be combined with other Web services for complex tasks
 How Web Services Work
(cont’d.) communication was originally accomplished with
• Machine-to-machine
HTML but now most are XML
• First Web services information sources programmers incorporated into
software applications
• More advanced example is purchasing software used to obtain vendor
price information
• Purchasing agent authorizes transaction and Web services submits order and
tracks until delivered
• As Web servers become more sophisticated, they can often make
decisions themselves
 Web Services Specifications
• Simple Object Access Protocol (SOAP) is a message-passing protocol
• Defines how to send marked up data from one software application to another
across a network
• Utilizes three rule sets
• Communication rules included in SOAP specification
• Web Services Description Language (WSDL) describes logic unit characteristics of
each Web service
• Universal Description, Discovery, and Integration Specification (UDDI) woks as
address book to identify Web services locations and associated descriptions
REST and RESTful Design
• Representational State Transfer (REST)
• Principle describing how the Web uses networking architecture to identify
and locate Web pages and elements making up those Web pages
• RESTful design (RESTful applications) are Web services built on the
REST model
• Transfers structured information from one Web location to another
• Services accessible at a specific address
• More than half of all Web services today are RESTful applications
Electronic Commerce for Small and
Midsize Businesses: Basic CSPs
• Use of service provider’s shared or dedicated hosting services
• Shifts staffing burden from company to Web host
• Spread costs over all hosted businesses
• Host provider keeps server working through storms and power outages
• CSPs offer free or low-cost e-commerce software
• Less than $20 per month with software built into site
• CSP examples
• [Link], [Link], 1&1 Internet, Yahoo!
Mall-Style CSPs
• Provide small businesses with basic Web site, online store design
tools, templates and easy-to-use interfaces
• Low monthly fee, one-time setup fees and percentage (or fixed) amount for
each transaction
• Shopping cart software and payment processing
• Two-main mall-style CSPs are Amazon services for business and eBay
stores for businesses
• No long term commitment and few up-front costs
 Estimating Operating Expenses
for a Small Web Business
• Cost to become operational between $400 and $8200
• Assumes less than 100 items for sale and business already has computer and
Internet access
• Figure 9-4 shows the range of estimates for first-year expenses for a small business
owners
• Self-hosting include one time basic server and router costs of $2000 to
$10,000 plus annual costs
• Basic Internet connection: $480 to $1,800
• Secure server room: $5000
• Required technicians: $50,000 to $100,000
• Annual total costs: $60,000 to $100,000
 © Cengage Learning 2017
FIGURE 9-4 Approximate costs to put a small store online
Electronic Commerce Software for Midsize
Businesses: Web Site Development Tools

• Possible to use Web page creation and site management tools from
Chapter 2
• After Web site creation add purchased software elements and create
the middleware
Midrange Electronic Commerce
Software
• Costs $5000 to $200,000
• Operating costs range $1000 to $30,000 annually
• Offers connectivity to database or ERP systems that store inventory
information
• Intershop offers midrange packages
• Include search and catalog capabilities, electronic shopping carts, credit card
processing and connection to back-end businesses and databases
• Setup wizards, catalog tools, data management functions and built-in
templates are included
• Manage storefronts with Web browser interface
Midrange Electronic Commerce
Software (cont’d.)
• IBM WebSphere Commerce Professional is a family of software
components
• Includes catalog templates, setup wizards, advanced catalog tools
• Provides link with existing corporate systems
• Inventory databases, procurement systems
• Customization requires programmers with JavaScript, Java or C++ expertise
• Costs between $50,000 and $300,000 depending on number of servers and
options
Electronic Commerce Software
for Large Businesses
• Larger business requirement many of the same advanced capabilities
as midsize firms
• Need ability to handle higher transaction loads and dedicated software
applications to handle specific online business elements
• Enterprise-class commerce software is used in large online business
operations
• Encompasses all areas of the business or enterprise
• Provides tools for B2B and B2C commerce
• Interacts with wide variety of existing systems
• Costs: $200,000 to $10 million
Enterprise-Class Electronic
Commerce Software
• Requires several dedicated computers, Web server system, firewalls
• IBM WebSphere Commerce Enterprise, Oracle E-Business Suite and
Broadvision
• Provides tools for linking to and supporting supply and purchasing
activities
• Secure transaction processing and fulfillment
• Interaction with firm’s inventory system to issue purchase orders
• Generate accounting entries
• Download electronic goods directly from site
 © Cengage Learning 2017
FIGURE 9-5 Typical enterprise-class electronic commerce architecture
Content Management
Software
• Helps control large amounts of text, graphics, media files that have
become crucial to doing business
• Increased use of social media and networking as part of online business
operations
• Software should be tested before commitment
• Straightforward procedures for regular maintenance
• Facilitates typical content creation tasks
• Leading providers include IBM and Oracle
• Costs between $50,000 and $500,000
• Can cost 3 to 4 times that amount to customize, configure and implement
Knowledge Management
Software
• Systems that manage knowledge itself rather than the documentary
representations of that knowledge
• Collect, organize and share knowledge
• Enhance collaboration and preserve knowledge gained through information
use to benefit future users
• Tools to read documents and conduct searches
• Use proprietary semantic, statistical algorithms
• Collects knowledge elements by extracting them from normal
interactions users have with information
• Implementation costs $10,000 to $1 million or more
Supply Chain Management
Software
• Helps coordinate planning and operations with supply chain partners
• SCM planning software develops coordinated demand forecasts
• SCM execution software helps with warehouse and transportation
management
• SCM software components manage demand and supply planning and
demand fulfillment
• Cost of SCM software implementations varies tremendously based on
number of locations
• Range from under $300,000 to $5 million
Customer Relationship
Management Software
• Goal is to understand customer’s specific needs and customize
product or service to meet those needs
• Idea is if customer needs are met exactly they will pay more for goods or
services
• Software must obtain data from operations software and gather data
about customer activities
• Use data to conduct analytical activities
• Basic form of CRM uses customer information to sell more goods or
services
• Advanced form of CRM delivers attractive, positive customer
experiences
Customer Relationship
Management Software (cont’d.)
• Important in maintaining customer loyalty when purchase process is
long and complex
• From 1996 to 2000 companies spent millions to buy systems and
restructure customer strategies
• Bad experiences led to a change in thinking
• Now used to solve smaller, more specific problems
• Popular target is call center operations
• Some companies create their own but most buy a software package
• Prices start around $2000 and large implementations can cost millions
 © Cengage Learning 2017
FIGURE 9-6 Elements of a CRM system
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