Managing a Business/Question on information technology and e-commerce
Sir , please help me get the answers for the below questions.
1. What are the different types of information processing methods which demands on consumers due to information change imposed by electronic markets?
2. Explain in detail on-line airline ticketing system. How is it different from conventional system? Explain with the help of a diagram, types of transactions one can do, mode of payments and the various security features of on-line banking system.
1. What are the different types of information processing methods which demands on consumers due to information change imposed by electronic markets?
CONSUMER ORIENTED APPLICATIONS
The wide range of applications for the consumer marketplace can be broadly classified into
• Entertainment: Movies on demand, Video cataloging, interactive ads, multi-user games, on-line discussions
• Financial services and information: Home banking, financial services, financial news
• Essential services: Home shopping, electronic catalogs, telemedicine, remote diagnostics
• Educational and training: Interactive education, video conferencing, on-line databases
BUILDING BLOCKS IN THE INFRASTRUCTURE OF APPLICATIONS
None of the applications would be possible without each of the building blocks in the infrastructure which are given as follows:
• Common business services, for facilitating the buying and selling process
• Messaging and information distribution, as a means of sending and retrieving information
• Multimedia content and network publishing, for creating a product and a means to communicate about it.
• The I-Way is the very foundation for providing the highway system along which all E-commerce must travel.
PILLARS SUPPORTING THE APPLICATIONS
There are two pillars supporting all applications and infrastructure. They are:
Public policy – To govern such issues as Universal access, privacy and information pricing
Technical standards – To dictate the nature of information publishing, user interfaces, and transport in the interest of compatibility across the entire network.
Electronic Commerce can offer both short term and long-term benefits to the companies. Not only can it open new markets, enabling you to reach new customers, but it can also make it easier and faster for you to do business with your existing customer base. Moving business practices, Such as ordering, invoicing and customer support, to network-based system can also reduce the paperwork involved in business-to-business transactions. When more of the information is digital, one can better focus on meeting your customer’s needs. Tracking customer satisfaction, requesting more customer feedback, and presenting custom solutions for the clients are just some of the opportunities that can stem from E-commerce.
MULTIMEDIA CONTENT FOR APPLICATIONS
Multimedia content can be considered both fuel and traffic for E-commerce applications. The technical definition of Multimedia is the use of digital data in more than one format, such as the combination of text, audio, video and graphics in a computer file/document. Its purpose is to combine the interactivity of a user-friendly interface with multiple forms of content. The success of E-commerce applications also depends on the variety and innovativeness of multimedia content and packaging. E-commerce requires robust servers to store and distribute large amounts of digital content to consumers. These multimedia storage servers are large information warehouses capable of handling various content. Theses servers must handle large-scale distribution, guarantee security and complete reliability.
All applications follow the client-server model. Clients are the devices plus software that request information from servers. Servers are the computers which server information upon the request by the clients. Client devices handle the user interface. The server manages application tasks, handles storage and security and provides scalability (ability to add more clients as needed for serving more customers). The client-server architecture links PC’s to a storage (or database) server, where most of the computing is done on the client.
The client-server model allows the client to interact with the server through a request-reply sequence governed by a paradigm known as message passing. Commercial users have only recently begun downsizing their applications to run on client-server networks, a trend that E-commerce is expected to accelerate.
TYPES OF E-COMMERCE
The following three strategies are the focal points for E-Commerce
Business-to-business E-commerce: The Internet can connect all businesses to each other, regardless of their location or position in the supply chain. This ability presents a huge threat to traditional intermediaries like wholesalers and brokers. Internet connections facilitate businesses’ ability to bargain directly with a range of suppliers -- thereby eliminating the need for such intermediaries.
2. Business-to-consumer E-commerce: One-way marketing. Corporate web sites are still prominent distribution mechanisms for corporate brochures, the push, one-way marketing strategy.
Purchasing over the Web: Availability of secure web transactions is enabling companies to allow consumers to purchase products directly over the web. Electronic catalogs and virtual malls are becoming commonplace.
Relationship Marketing: The most prominent of these new paradigms is that of relationship marketing. Because consumer actions can be tracked on the web, companies are experimenting with this commerce methodology as a tool for market research and relationship marketing:
o Consumer survey forms on the web
o Using web tracking and other technology to make inferences about consumer buying profiles.
o Customizing products and services
o Achieving customer satisfaction and building long-term relationships
2. Intra-company E-commerce: Companies are embracing intranets at a phenomenal growth rate because they achieve the following benefits:
Reducing cost - lowers print-intensive production processes, such as employee handbooks, phone books, and policies and procedures
Enhancing communications - effective communication and training of employees using web browsers builds a sense of belonging and community.
Distributing software - upgrades and new software can be directly distributed over the web to employees.
Sharing intellectual property - provides a platform for sharing expertise and ideas as well as creating and updating content - "Knowledge webs". This is common in organizations that value their intellectual capital as their competitive advantage.
Testing products - allows experimentation for applications that will be provided to customers on the external web.
While many technologies can fit within the definition of "Electronic commerce," the most important are:
• Electronic data interchange (EDI)
• Bar codes
• Electronic mail
• World Wide Web
• Product data exchange
• Electronic forms
Electronic Data Interchange (EDI)
EDI is the computer-to-computer exchange of structured business information in a standard electronic format. Information stored on one computer is translated by software programs into standard EDI format for transmission to one or more trading partners. The trading partners’ computers, in turn, translate the information using software programs into a form they can understand.
Bar codes are used for automatic product identification by a computer. They are a rectangular pattern of lines of varying widths and spaces. Specific characters (e.g. numbers 0-9) are assigned unique patterns, thus creating a "font" which computers can recognize based on light reflected from a laser.
The most obvious example of bar codes is on consumer products such as packaged foods. These codes allow the products to be scanned at the check out counter. As the product is identified the price is entered in the cash register, while internal systems such as inventory and accounting are automatically updated.
The special value of a bar code is that objects can be identified at any point where a stationary or hand held laser scanner could be employed. Thus the technology carries tremendous potential to improve any process requiring tight control of material flow. Good examples would be shipping, inventory management, and work flow in discrete parts manufacturing.
Messages composed by an individual and sent in digital form to other recipients via the Internet.
The Internet is a decentralized global network of millions of diverse computers and computer networks. These networks can all "talk" to each other because they have agreed to use a common communications protocol called TCP/IP. The Internet is a tool for communications between people and businesses. The network is growing very, very fast and as more and more people are gaining access to the Internet, it is becoming more and more useful.
World Wide Web
The World Wide Web is a collection of documents written and encoded with the Hypertext Markup Language (HTML). With the aid of a relatively small piece of software (called a "browser"), a user can ask for these documents and display them on the user’s local computer, although the document can be on a computer on a totally different network elsewhere in the world. HTML documents (or "pages," as they are called) can contain many different kinds of information such as text, pictures, video, sound, and pointers, which take users immediately to other web pages. Because Web pages are continually available through the Internet, these pointers may call up pages from anywhere in the world. It is this ability to jump from site to site that gave rise to the term "World Wide Web." Browsing the Web (or "surfing the Net") can be a fascinating activity, especially to people new to the Internet. The World Wide Web is by far the most heavily used application on the Internet.
Product Data Exchange
Product data refers to any data that is needed to describe a product. Sometimes that data is in graphical form, as in the case of pictures, drawings and CAD files. In other cases the data may be character based (numbers and letters), as in the case of specifications, bills of material, manufacturing instructions, engineering change notices and test results.
Product data exchange differs from other types of business communications in two important ways. First, because graphics are involved users must contend with large computer files and with problems of compatibility between software applications. (The difficulty of exchanging CAD files from one system to another is legendary.) Second, version control very quickly gets very complicated. Product designs, even late in the development cycle, are subject to a great deal of change, and because manufacturing processes are involved, even small product changes can have major consequences for getting a product into production.
Electronic forms is a technology that combines the familiarity of paper forms with the power of storing information in digital form. Imagine an ordinary paper form, a piece of paper with lines, boxes, check-off lists, and places for signatures. To the user an electronic form is simply a digital analogue of such a paper form, an image, which looks like a form but which appears on a computer screen and is filled out via mouse, and keyboard. Behind the screen, however, lie numerous functions that paper and pencil cannot provide. Those extra functions come about because the data from electronic forms are captured in digital form, thus allowing storage in data bases, automatic information routing, and integration into other applications.
DETERMINING TECHNOLOGICAL FEASIBILITY
As business needs are determined, it is necessary to establish the technological feasibility of various E-commerce plans that could meet the needs. The starting point should be a clear sense of what functions each E-commerce technology can provide to improve business functioning. We summarize these in the below given table :
Most Powerful Functions of Each E-commerce Technology
Technology Business Value
EDI 1. Integration of incoming and outgoing structured data into other applications (e.g., use of customer orders to schedule production)
2. Lowers cost when transaction volume is high
3. Eases communication with many different trading partners (customers, suppliers, vendors)
Bar Code 1. Locate and identify material
2. Integrate location and identification information with other applications and data bases (e.g., bar codes inserted at loading dock can be integrated into an advance ship notice EDI transaction).
Electronic mail 1. Free-text queries to individuals or groups
2. Share information via simple messages
3. Share complex information (via attachments)
4. Collaboration across distance (by making it easier to communicate and share information)
World Wide Web 1. Present information about company
2. Search for information from a large number of sources
3. Electronic commerce -- buy/sell products and services
4. Collaboration, information sharing among selected users within or without a company
Product Data Exchange 1. Accurate product details transmitted to trading partners
2. Oversight of trading partners design work
3. Collaborative engineering across distance
Electronic Forms 1. Managing processes when human oversight, approvals, or information input needs to be combined with standard elements of information (e.g., catalogue data)
2. Tracking progress in a process where many people are involved doing different activities
3. Integrating human input data with automated data bases or applications
4. Electronic commerce (through integration with the WWW and internal systems)
1.13 ELECTRONIC COMMERCE VERSUS OTHER FORMS OF COMMERCE
The methods of doing business differ from traditional commerce to the extent to which electronic commerce combines information technology, telecommunications technology, and business processes to make it practical to do business in ways that could not otherwise be done. To illustrate, let’s draw on some examples. In each of these cases technology and business process must work together if EC is to be successful.
Example of EC Technology Business Process
Manufacturer provides suppliers with access to data base on Electronic commerce networks Customer
1. Database with reliable information.
2. Security fire-wall to control outsiders’ access
1. Computer with network access capability 1. Customer commits that data are current.
2. Customer commits to inform supplier that a change has been made.
3. Supplier agrees to use database as source of ECN information.
Interpersonal communication services
Joint customer - supplier design 1. Computer Aided Design systems which can understand each others’ files
2. Version control applications 1. Agreement that joint design will take place
2. Adoption of compatible design methods
3. Training of groups in collaborative design
Web to shop for commodities Seller
1. Web site capable of allowing on-line shopping
2. Web site capable of secure transmission
1. Web browsing capability Seller
1. Ability to keep site current in an environment of rapidly changing availability and price.
1. Purchasing system that can commit to a purchase without paper.
Integrated supply chain 1. EDI
3. Email (for exceptions) 1. Process reengineering of order entry and purchasing systems to allow integration of MRP and EDI.
2. Staff assigned to resolving exceptions.
IMPLEMENTATION OF E-COMMERCE: A LIFE CYCLE APPROACH
Proper implementation requires deliberate attention to seven stages of technology life cycle :
1. Awareness Training: Provides an understanding of what the technology is, a general sense of what it can do for a business, and how to begin implementation.
2. Business Analysis: It is easy to jump immediately from "awareness" to the details of "requirements analysis", but doing so is a mistake. To assure maximum value from EC, there must be a thorough understanding of how the new technology can help the business.
3. Requirements Analysis: Yields an understanding of what kind of EC functionality is needed to meet business requirements. As an example: business need equals to keep customers informed of changing product availability and price. Requirement equals to web based catalogue.
4. Design: Sets out specifics, e.g. Who are my potential vendors? By when do I need different parts of the system up and running? What will the system cost?
5. Implementation: The system becomes real. New technology comes in the door. Training is conducted. New business process begins to function. And so on.
6. Integration and Validation: Make sure the system performs as per its specifications.
7. Maintenance: Keeps the system running, deals with unforeseen circumstances, and plans for improvement.
The main reason to employ these stages is that failure to do so can result in wasted time, wasted money, and sub-optimal systems. While it is important to assure that all stages are invoked, the effort expended on each may vary greatly with circumstance. As an example, a company contemplating a Web based catalogue may have a critical mass of workers who have used the Web and who appreciate what it can do. In this case little awareness training is needed. It may be important to make sure that people involved have a specific appreciation of what Web catalogues can do, but certainly this situation does not require that great resources be invested in the Awareness stage. As a second example, a company may implement e-mail, a technology that draws on well proven off-the-shelf software, and which requires no complex system integration. While "integration and testing" must certainly be carried out, the resources invested in this life cycle stage should be relatively small.
ELECTRONIC SHOPPING CART
An electronic shopping cart works the same way a shopping cart does in the physical world. As you browse through an online store, you can place products in your virtual shopping cart, which keeps track of the products you have placed in it. When you're ready to leave the store, you click a "check out" link that shows you what you've placed in your virtual shopping cart. You can usually remove items that you're no longer interested in purchasing and then enter your shipping and payment information to process your order.
IS E-COMMERCE SAFE?
No e-commerce system can guarantee 100-percent protection for your credit card, but you're less likely to get your pocket picked online than in a real store. Although Internet security breaches have received a lot of press attention, most vendors and analysts argue that transactions are actually less dangerous in cyberspace than in the physical world. For merchants, E-commerce is actually safer than opening a store that could be looted, burned, or flooded. The difficulty is in getting customers to believe that E-commerce is safe for them. Consumers don't really believe it yet, but experts say E-commerce transactions are safer than ordinary credit card purchases. Ever since the 1.0 versions of Netscape Navigator and Microsoft Internet Explorer, transactions can be encrypted using Secure Sockets Layer, a protocol that creates a secure connection to the server, protecting the information as it travels over the Internet. SSL uses public key encryption, one of the strongest encryption methods around. A way to tell that a Web site is secured by SSL is when the URL begins with https instead of http.
Browser makers and credit card companies are promoting an additional security standard called Secure Electronic Transactions (SET). SET encodes the credit card numbers that sit on vendors' servers so that only banks and credit card companies can read the numbers.
SYSTEMS OF PAYMENTS IN E-COMMERCE
E-commerce is rife with buzzwords and catchphrases. Here are some of the current terms people like to throw around:
Credit card-based: If consumers want to purchase a product or service, they simply send their credit card details to the service provider involved and the credit card organization will handle this payment like any other.
Smart cards: These are credit and debit cards and other card products enhanced with microprocessors capable of holding more information than the traditional magnetic stripe. The chip can store significantly greater amounts of data, estimated to be 80 times more than a magnetic stripe. Smart cards are basically of two types:
Relationship based smart credit cards: This is an enhancement of existing card services and/or the addition of new services that a financial institution delivers to its customers via a chip-based card or other device. These new services may include access to multiple financial accounts, value-added marketing programs, or other information cardholders may want to store on their card.
Electronic Purses: These are wallet-sized smart cards embedded with programmable microchips that store sums of money for people to use instead of cash for everything from buying food to paying subway fares.
Digital or electronic cash: Also called e-cash, these terms refer to any of several schemes that allow a person to pay for goods or services by transmitting a number from one computer to another. The numbers, just like those on a dollar bill, are issued by a bank and represent specified sums of real money. One of the key features of digital cash is that it's anonymous and reusable, just like real cash. This is a key difference between e-cash and credit card transactions over the Internet.
Electronic checks: Currently being tested by Cybercash, electronic checking systems such as PayNow take money from users' checking accounts to pay utility and phone bills.
Electronic wallet: This is a payment scheme, such as Cybercash’s Internet Wallet, that stores your credit card numbers on your hard drive in an encrypted form. You can then make purchases at Web sites that support that particular electronic wallet. When you go to a participating online store, you click a Pay button to initiate a credit card payment via a secure transaction enabled by the electronic wallet company's server. The major browser vendors have struck deals to include electronic wallet technology in their products.
Transactions in amounts between 25 cents and $10, typically made in order to download or access graphics, games, and information, are known as micropayments. Pay-as-you-go micropayments were supposed to revolutionize the world of E-commerce..
E-commerce is a new way of conducting, managing and executing business transactions using computer and telecommunications networks. As awareness of the Internet throughout the commercial world and general public increases, competitiveness will force lower entry barriers, continued rapid innovation and expansion of markets. The real key to making electronic commerce over the Internet a normal, everyday business activity is the convergence of the telecommunications, content/media and software industries. E-Commerce is expected to improve the productivity and competitiveness of participating businesses by unprecedented access to an on-line global market place with millions of customers and thousands of products and services.
3. Explain in detail on-line airline ticketing system. How is it different from conventional system? Explain with the help of a diagram, types of transactions one can do, mode of payments and the various security features of on-line banking system.
Automated ticketing and state-of-the-art, real-time sales reporting facilities
Airline tickets generated automatically ensure consistent, clear, accurate transactions. They also provide real-time provision of data – a vital asset for any business.
Ticketing provides the software to automate any airline’s ticketing operation. It generates passenger travel documents in multiple formats, including electronic tickets.
Ticketing is available worldwide. It is an integral part of SITA’s Horizon portfolio, a suite of products that enable you to simplify your distribution.
Ticketing delivers automated ticketing and state-of-the-art, real-time sales reporting facilities. It complies with International Air Transport Association (IATA) and Air Transport Association (ATA) standards.
Ticketing provides comprehensive automated sales activity, electronic ticket usage, and financial reporting for individual ticket agents, independent sales offices and the entire airline.
With Ticketing, you receive:
• Up-to-date, accurate and detailed sales, activity and financial reports from the entire airline, all ticket agents and independent sales offices
• Rapid access to data and the minimization of errors – improving financial management and ultimately your bottom line
Electronic tickets, like paper tickets, document sales – but unlike paper ones, they also track the use of the ticket. The e-ticket database is separate from the airline’s reservation database, and is independently accessible.
E-ticketing is available for all on-line flight segments and interline flight segments (where bilaterally agreed). An e-ticket may be sold by the airline, a global distribution system (when participating at this level), or an interline partner (where bilaterally agreed).
With SITA’s state-of-the-industry e-ticketing ground handling capabilities, e-tickets may also be used in airports where your flights are ground handled. An automatic daily download of all e-ticket coupon changes is provided to your financial systems; electronic tickets are included in all sales reports and financial data.
Ticketing provides the following benefits.
• Expedited and less expensive passenger transactions
• Improved accuracy and legibility
• Increased security
• Increased customer retention
• Ability to meet changing demands of your business environment
• Ensured compliance with International Air Transport Association (IATA) and Air Transport Association (ATA) standards
E-ticketing provides the following benefits.
• Saves money by eliminating paper and postage-related costs
• Promotes low cost distribution channels, such as airline Web sites
• Enhances passenger handling with automation for example, using kiosks, the Internet and mobile phones
Increased productivity and control
• Maximizes agent productivity by turning call centres into revenue centres
• Eliminates lost and stolen tickets
• Reduces the opportunities for fraud
Improved service delivery
• Supports alliance and partner airline interline e-ticketing requirements
• Ticket changes and/or refund requests are processed more easily
• Supports ground handling options (i.e., where your airline is ground handled)
Ticketing offers a wide range of features to improve the productivity of both ticketing and financial management.
• Multiple ticket formats can be generated automatically (e.g., TAT, OPTAT, ATB2, OPTATB and electronic tickets)
• Automated Ticket and Boarding pass 2 (ATB2) functionality includes credit card charge forms, itinerary and address cards
• ATB2 coupons, with encoded magnetic strips, may be read at check-in and/or used to read ticket data at revenue accounting
• Electronic tickets may be sold by partner airlines and global distribution systems for both online and interline itineraries
• Conjunction tickets are issued automatically and an itinerary of up to 20 segments may be issued
• Easy-to-use document issuance screens are provided for user guidance
• Multiple printer types are supported allowing you to use your own choice of equipment and vendor
• The system also has state-of-the-art interfaces to Reservations and Airfare
Ticketing also offers on-demand and automated printing of management reports. These include:
• Sales summaries of agent and office productivity
• Sales reports including refund and exchange information
Real-time financial data can be electronically distributed as required, based on specified financial periods. Financial data can also be reported to the bank settlement plan (BSP) or in-house system based on specified or user-defined financial periods.
Ticketing can provide financial data for use in revenue accounting software (such as Passenger Revenue Accounting).
BANKING ----NO EXPOSURE