Chapter 5 - Electronic Commerce and Enterprise Systems
An Introduction to Electronic Commerce (E-Commerce)
Definition:
Electronic commerce refers to the buying, selling, and exchanging of goods, services, and
information over electronic networks, primarily the internet.
Types of E-Commerce Models:
1. Business-to-Business (B2B): Transactions between businesses (e.g., wholesalers and
retailers).
2. Business-to-Consumer (B2C): Direct transactions between businesses and consumers.
3. Consumer-to-Consumer (C2C): Transactions between individual consumers using
platforms like eBay.
4. E-Government: The use of electronic communication to deliver government services to
citizens and businesses.
Mobile Commerce (M-Commerce)
Definition:
M-commerce involves buying and selling via mobile devices such as smartphones and tablets.
Examples:
Mobile banking
Mobile shopping apps
Mobile payment systems (e.g., Apple Pay, Google Pay)
Advantages of Electronic and Mobile Commerce
1. Convenience: Access to products and services 24/7 from anywhere.
2. Global Reach: Ability to reach customers worldwide.
3. Cost Efficiency: Reduced operational costs through automation.
4. Personalization: Tailored experiences using customer data.
5. Increased Sales: Broader customer base and cross-selling opportunities.
E-Commerce Challenges
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1. Security Concerns: Data breaches and cyber threats.
2. Privacy Issues: Misuse of consumer data.
3. Legal and Regulatory Compliance: Adhering to local and international laws.
4. Logistics and Delivery: Timely delivery of goods to customers.
5. Technology Infrastructure: High initial setup and maintenance costs.
Electronic and Mobile Commerce Applications
1. Manufacturing: Real-time supply chain management and order tracking.
2. Marketing: Email marketing, social media campaigns, and SEO.
3. Advertising: Targeted ads, retargeting, and influencer marketing.
4. Bartering: Platforms for exchanging goods and services without money.
5. Retargeting: Re-engaging customers who visited but didn’t purchase.
6. Price Comparison: Aggregators that allow consumers to compare prices.
7. Couponing: Digital discount codes and cashback offers.
8. Investment and Finance: Online trading platforms and robo-advisors.
9. Banking: Mobile banking apps and online payment gateways.
Technology Infrastructure Required to Support E-Commerce and M-Commerce
Hardware:
Servers and storage devices for hosting websites and databases.
Mobile devices for accessing m-commerce services.
Web Server Software:
Software for hosting and delivering web content (e.g., Apache, Nginx).
E-Commerce Software:
Shopping cart solutions, payment processing, and content management systems (CMS).
Mobile Commerce Hardware and Software:
Mobile devices, wireless networks, and mobile apps.
Electronic Payment Systems:
Secure online payment gateways (e.g., PayPal, Stripe).
Digital wallets and mobile payment systems.
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Transaction Processing Systems (TPS)
Definition:
TPS handle the collection, storage, and processing of data from day-to-day business transactions.
Traditional Transaction Processing Methods and Objectives:
Batch Processing: Accumulating transactions and processing them in groups.
Real-Time Processing: Immediate processing of transactions.
Objectives:
Ensure accuracy, efficiency, and security in transactions.
TPS for Small- and Medium-Sized Enterprises (SMEs):
Cloud-based TPS solutions that are cost-effective and scalable.
Transaction Processing Activities:
1. Data collection
2. Data validation
3. Data processing
4. Document generation
Enterprise Systems
Enterprise Resource Planning (ERP):
Definition: Integrated systems that manage core business processes in real-time using a common
database.
Advantages of ERP:
1. Streamlined operations.
2. Improved data accuracy and accessibility.
3. Enhanced collaboration across departments.
Leading ERP Systems:
SAP
Oracle ERP Cloud
Microsoft Dynamics
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Customer Relationship Management (CRM):
Definition: Systems that help manage customer interactions and improve relationships.
Key Benefits:
Increased customer retention.
Enhanced sales and marketing strategies.
Better customer insights.
Product Lifecycle Management (PLM):
Definition: Software that manages a product’s lifecycle from inception to disposal.
Benefits:
Accelerates product development.
Reduces costs associated with design and manufacturing.
Improves collaboration among stakeholders.
Overcoming Challenges in Implementing Enterprise Systems
1. Cost Management: Choosing scalable, cost-effective solutions.
2. Change Management: Training employees to adapt to new systems.
3. Customization: Ensuring the system meets specific organizational needs.
4. Data Migration: Ensuring smooth and accurate transfer of existing data.
Hosted Software Model for Enterprise Software
Definition:
A model where enterprise software is hosted on a cloud platform and accessed via the internet.
Advantages:
1. Lower upfront costs.
2. Simplified updates and maintenance.
3. Scalability and flexibility.
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Discussion Questions
1. How does e-commerce differ from m-commerce in terms of technology and applications?
2. What are the major benefits and challenges of implementing an ERP system?
3. Discuss the role of transaction processing systems in ensuring business efficiency.
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