Management 265Introduction to E-Commerce

Nicholas A. Davis

Session Two

09/22/2009

Objectives• Software development lifecycle• Build vs. buy decision• Considerations in choosing appropriate hardware

and software• Considerations for monitoring and improving

website performance• Identify key security threats to e-commerce• Describe tools used to ensure security• Explain online payment processes• Describe features of bill presentment and

payment

Assignments Due Today

• Read chapters 4 and 5 in the textbook

• Submit case study analysis

• Discuss an article related to cutting edge technology used in e-commerce

• Submit ISP analysis

• Develop action plan for e-commerce paper

ISP Analysis

• Contact local ISP: Charter, TDS, AT&T

• Dialup, Cable (broadband), DSL

• Features

• Benefits

• Costs

• Drawbacks

Group Exercise

• Select a website where you like to shop online

• You are in charge of developing a new e-commerce website for this company

• Draw a diagram representing the System Development Lifecycle

System Development Lifecycle

• Systems Analysis/Planning

• Systems Design

• Building the System

• Testing

• Implementation/Service Delivery

• Let’s examine each

Best Practices – Systems Analysis

• What do we want to do with e-commerce and what can it do for our business?

• Let business decisions drive the technology

• Identify objectives and then identify technical functionality to meet those objectives

• The real difference in planning for and e-commerce store vs. a retail store

Best Practices – System Design

• System design specification – simply a description of the main components

• Logical Design is the data flow

• Physical Design translates the logical design into physical components

Best Practices – Build vs. Buy

• Outsourcing means that you hire an outside vendor to provide services

• Lately, outsourcing has become a touchy subject, a more politically correct term is “Co-Managed”

• Build: Out of the box, benefits, drawbacks• Host: Benefits, drawbacks• Build and Host• Class’s opinion?• Instructor’s opinion!

Best Practices - Testing

• Unit Testing – each module

• System Testing – everything together

• Acceptance Testing – Internal AS WELL as external facing testing is important.

Best Practices - Implementation

• Monitor

• Adapt

• Maintain

• Expensive!

• Benchmark to competitors: Speed, Quality, Design, Pricing, Promotions, Keeping Current

Software and Platform Selection Considerataions

• Operating System – Commercial vs. Open• Commercial benefits – More refined, mature,

supported• Commercial drawbacks – Higher purchase cost,

more well known to hackers, may be less robust….Less so currently

• Open Source benefits – cheaper (or free), lesser known to hackers, may be more robust

• Open Source drawbacks – Less user friendly (requires more expertise), little or no support, less mature in some areas, so SLA available

E-Commerce Software ToolsSite Management Tools

• Identify dead links on your site

• Identify orphan files

• Traffic patterns

Dynamic Page Generation Tools

• Original web pages had static content

• Webpage contents are now often stored as objects in a database

• The advantage of modern architecture is dynamic, user specific page generation

• Open Database Connectivity standard (ODBC), means that a web server can connect to virtually any backend database, regardless of vendor

Discussion

• System Development Lifecycle

• Buy vs. Build decision making

• Software and Platform selection process

• E-commerce software tools

E-Commerce Security

E-Commerce Security Threats

• Malicious code – such as SQL injection

• Virus: replicate file to file and deliver a payload

• Worm: replicate computer to computer

• Trojan Horse: looks harmless, but isn’t

• Bot: waits and then executes commands received from an external source, making your computer a “zombie”

E-Commerce Threats

• Spyware, browser parasite is a form of spyware

• Malware

• Phishing

E-Commerce Threats

• Internal staff

• Contractors

• Janitorial services

• Third party business partners

Class Exercise

• What do you believe are the major threats to e-commerce?

• Which solutions can help mitigate these risks?

Class Article Discussion

• Describe the article you found in summary

• Describe a leading edge technology that may change e-commerce

• How will it change?

• Will it make it better or worse from the viewpoint of the consumer and the service provider?

E-Commerce Function Paper

• Introduce the company

• Introduce the industry sector

• Introduce the corporate website

• Identify the company mission and vision

• Identify methods used to create value for its customers

• Describe the web application and function being analyzed

E-Commerce Function Paper(More Detail)

• Analyze the corporate website application and describe the benefits to the organization

• Critique the content, context and infrastructure of the website from the customer perspective

• Provide an overall critique of the website, including a SWOT analysis

• Make recommendations for improvement

Class Exercise

• Have you changed your shopping and banking habits over the past five years?

• Do you shop more online than you used to?

• Do you use and trust PayPal? 1 to 10 scale

• What is your confidence level?

Payment Systems

• B2B = Business to Business

• B2G = Business to Government

• C2C = Consumer to Consumer

• G2B = Government to Business

• G2C = Government to Citizen

• C2B = Consumer to Business

B2B• Business-to-business (B2B) describes commerce transactions

between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer. Contrasting terms are business-to-consumer (B2C) and business-to-government (B2G).

• The volume of B2B transactions is much higher than the volume of B2C transactions. The primary reason for this is that in a typical supply chain there will be many B2B transactions involving subcomponent or raw materials, and only one B2C transaction, specifically sale of the finished product to the end customer. For example, an automobile manufacturer makes several B2B transactions such as buying tires, glass for windshields, and rubber hoses for its vehicles. The final transaction, a finished vehicle sold to the consumer, is a single (B2C) transaction.

B2G• Business-to-government (B2G) is a derivative of B2B

marketing and often referred to as a market definition of "public sector marketing" which encompasses marketing products and services to government agencies through integrated marketing communications techniques such as strategic public relations, branding, marcom, advertising, and web-based communications.

• B2G networks allow businesses to bid on government RFPs in a reverse auction fashion. Public sector organizations (PSO's) post tenders in the form of RFP's, RFI's, RFQ's etc. and suppliers respond to them.

C2C• Consumer-to-consumer (C2C) (or citizen-to-citizen) electronic

commerce involves the electronically-facilitated transactions between consumers through some third party. A common example is the online auction, in which a consumer posts an item for sale and other consumers bid to purchase it; the third party generally charges a flat fee or commission. The sites are only intermediaries, just there to match consumers. They do not have to check quality of the products being offered.

• This type of e-commerce is expected to increase in the future because it cuts out the costs of using another company. An example on cited in Management Information Systems, is for someone having a garage sale to promote their sale via advertising transmitted to the GPS units of cars in the area. This would potentially reach a larger audience than just posting signs around the neighborhood.

G2B

• Government-to-Business (abbreviated G2B) is the online non-commercial interaction between local and central government and the commercial business sector, rather than private individuals (G2C). For example http://www.dti.gov.uk is a government web site where businesses can get information and advice on e-business best practices

G2C

• Government-to-Citizen (abbreviated G2C) is the online non-commercial interaction between local and central Government and private individuals, rather than the commercial business sector G2B. For example Government sectors become visibly open to the public domain via a Web Portal. Thus making public services and information accessible to all. One such web portal is Government Gateway.

• Consumer-to-business (C2B) is an electronic commerce business model in which consumers (individuals) offer products and services to companies and the companies pay them. This business model is a complete reversal of traditional business model where companies offer goods and services to consumers (business-to-consumer = B2C).

• This kind of economic relationship is qualified as an inverted business type. The advent of the C2B scheme is due to major changes:

• Connecting a large group of people to a bidirectional network has made this sort of commercial relationship possible. The large traditional media outlets are one direction relationship whereas the internet is bidirectional one.

• Decreased cost of technology : Individuals now have access to technologies that were once only available to large companies ( digital printing and acquisition technology, high performance computer, powerful software)

Class Exercise

Draw and discuss diagrams

• 5.9, 5.10, 5.11

• Pages, 284, 287, 288 in textbook

Class Discussion• Protecting privacy and intellectual property (encryption

and digital signing)• Internet Protocols (http vs. https) Is https safe enough

(Hint, think about the ENTIRE system, including data in TRANSIT as well as data at REST)

• Tools to ensure Internet security (Hint, host based tools such as AV and Firewalls, Intrusion Detection, Intrusion Prevention, Honeypots, Physical Security, Employee training, Social Engineering

• Functional requirements for conducting financial transactions on the web (Hint, Authentication, Authorization, Securing data in transit, Securing data in storage, data retention policies, PCI compliance

PayPal Case Study Analysis Discussion

• What is the value propositions that PayPal offers consumers? How about Merchants?

• What are some of the risks of using PayPal when compared to credit cards and debit cards?

• What strategy would you recommend that PayPal pursue in order to maintain its growth over the next five years?

• Why are cell phone networks a threat to Paypal’s future growth?

Wow, That Was a Lot!

• My favorite area of e-commerce is security!• Questions, comments, further discussion?• Assignments for next session:• Read chapters 6 to 8 in the textbook• Submit Ethical Implications paper• Select an article to discuss in class that involves

ethical or legal issues in e-commerce• Project team, case study----you pick!• Work on your e-commerce function paper

Additional Concerns