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duma 13-Dec-18

MS 311
Management Information
Systems (MIS)
Duma, R.
Overview of E-Business
and M-Commerce
Office: CE 13 – CIVE Administration Building
The University of Dodoma
College of Informatics and Virtual Education
Information System Department

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What Is an E-Business? • Perhaps the best way to understand e-businesses is with the
help of examples:
• Email marketing to existing and/or prospective customers is an e-
• eBusiness (e-Business), or E-business (electronic business activity, as it electronically conducts a business process—
business) is the conduct of business processes on in this case, marketing.
the internet. • An online system that tracks inventory and triggers alerts at specific
levels is also e-business. Inventory management is a business
• This would include the buying and selling of goods process, and when facilitated electronically, it becomes part of e-
and services, along with providing technical or business.
customer support through the Internet. • A content management system that manages the workflow
between a content developer, editor, manager and publisher is
another example of an e-business. In the absence of an electronic
workflow, the physical movement of paper files would conduct this
process. By electronically enabling it, it becomes an e-business.
• Online tools for human resources ranging from job listings and
application processes to collecting and maintaining relative data
about employees constitutes e-business.
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Is e-business = e-commerce? Origins of e-commerce

• Some people use the terms "e-business" and "e- • E-commerce applications existed long before
commerce" interchangeably, but they're not Internet
synonymous. • EDI (Electronic Data Interchange)
• E-commerce refers to buying and selling online • EFT (Electronic Funds Transfer)
• Commerce is intended as the activity of exchanging
goods and services with some kind of payment • Internet offered the general public the opportunity
WHILE, to conduct businesses online
• e-business encompasses all business conducted
• E-commerce can be viewed as a subset of e-
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Electronic Data Interchange (EDI)

EDI Process
• EDI can be defined as the transfer of structured data, by
agreed message standards from one computer system to
another with minimum human intervention
• Examples can be the exchange of any business
documents or data electronically (purchase orders and
invoices) exchange of
• Commonly used standard EDI format are such as ANSI
• The formatted data representing the documents may be
transmitted from originator to recipient via
telecommunications or physically transported on
electronic storage media
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Electronic Funds Transfer (EFT) Taxonomy of e-commerce

• EFT are electronic transfer of money from one bank • Three main categories:
account to another, either within a single financial • Business to Business (B2B)
institution or across multiple institutions, via computer-
based systems, without the direct intervention of bank • Business to Consumer (B2C)
staff. • Consumer to Consumer (C2C)
• The banking equivalent of EDI • Other categories:
• Denotes the transfer of : • Business to Government (B2G)
• Electronic checks • Mobile Commerce
• Customer accounts
• Payment informations
in automated way

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B2B E-procurement
• B2B or, in some countries, B to B is a situation where one • Automate enterprise purchasing processes, i.e. perform
business (company) makes a commercial transaction with all of the activities related to generating an order on the
another buyer’s side
• Realize transactions needed to perform financial or • Purchased goods can be :
commercial activities by companies over the Internet • Direct goods (critical items in the supply chain)
• This typically occurs when a business is sourcing materials • Indirect goods (MRO –Maintenance Repair and Operations -
for their production process (e.g. a food manufacturer such as office items)
purchasing salt)
• Automating procurement of indirect goods can
• Some typical applications: dramatically reduce costs since:
• E-procurement • Lessens maverick buying
• E-Marketplace • Reduces supplier response time

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B2B advantages and disadvantages
• B2C refers to the transactions conducted directly
between a company and consumers who are the
• Advantages: end-users of its products or services.
• Help to automate communications • Correspond to retail sale
between companies making them • Offer directly to the customer an interface of
easier and quicker • Typical examples:
• Disadvantages: • Online book store (e.g.
• Online car purchasing (e.g.
• Often need legacy integration • Booking and purchase of airline tickets (e.g.
• Growth of B2C applications thanks to Internet
• A new kind of B2C applications are the Cybermalls

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Cybermalls B2C advantages and disadvantages

• Include more virtual shops • Advantages:
• Allow company to extend existing services to customers
• Appear as web portals with links to single e-shops
• Allow company to increase its customers
grouped by different product categories (e.g. music
• Offer a wider choice and allow cheaper prices
or books)
• May give to the company a worldwide visibility
• Advantages for smaller businesses: • Online shops are accessible 24h a day
• Reduced initial investment
• Disadvantages:
• Easily traceability through the mall’s brand
• Low order conversion rates
• High risk (see Cyberphobia)

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Order conversion rates Cyberphobia and the .com crash

• Order Conversion Rate (OCR) is defined as the “Cyberphobia” is the market’s irrational fear of
number of orders taken divided by the total
number of visits to the website during the same the Internet due to the several bankruptcies
period or simply # of orders / # of contacts occured in the past years
• Measure the capability of a certain B2C application
to convert an user into a buyer
• Example a survey carried out in August 2000 showed
that order conversion rates in USA were of 1.9% (Boston
Consulting Group and

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C2C C2C advantages and disadvantages

• C2C is a business model whereby customers • Advantages
• Allow consumers to interact directly among
can trade with each other, typically, in the them
online environment • Give to the consumers a new way of
• Examples: purchasing and selling services and goods
• Ebay • Disadvantages
• • Little earning capacity

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B2G Issues in developing e-commerce

• Correspond to all kind of transactions • Many of the following issues:
between company and public administrator • Security
• Utilized mostly in the USA • Flexibility
• Scalability
• Fault tolerance
• Interfaces (graphical and not)
are common to many applications, but they are all
critical in the case of e-commerce because of its
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Security Issues Flexibility Issues

• Security is a crucial feature • E-commerce systems are subject to frequent
• Most transactions take place in a fully structural changes because of mutations of:
automated way • Products and services provided by the firm
• Restricted data are transmitted through a • Commercial partnerships
public network
• Users must be sure that their money will not be
lost or stolen

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Scalability Fault tolerance

• Capability to support a certain number of users • A less fault-tolerant application will be less
(thousands, even millions) without compromising available to the user
performances • It is easy to lose customers forever
• It is important because a slow application often • It is necessary to redirect the users without they
means to lose customers (especially in B2C) since perceive it
they have very small patience

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User Interfaces Mobile commerce

• Must be intuitive,easily comprehensible and of • Concern doing businesses by means of mobile wireless
simple utilization devices
• Can be both B2B and B2C
• In the case of B2C must support profiling in order
to anticipate the customer requests • Have a growing importance in the future of e-
commerce applications
• They also need to be customizable • Will introduce completely new forms of electronic
• E.g. E-tickets
• The development of such applications faces some of
the greatest challenges in the security area to secure
the trust of consumers

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Development of M-Commerce SSL

Commerce E-commerce M-commerce

Experience Brick-and- PC to web Mobile to web • SSL stands for “Secure Sockets Layer,” though it is
mortar, catalog Mobile to ‘vending machine’ also sometimes called “Transport Layer Security”
Payment type Cash, Cheque, Credit, Credit, Others (e.g. PayPal), Carrier (or TLS).
Credit, Debit Others (e.g. billed or prepaid, Premium rate SMS
PayPal) • SSL on its own it is a protocol used to secure and
protect transactions between destinations on a
Technology Paper, PoS Portal, SSL Portal, SSL, PoS (bar code) network.
(mag stripe)
Settlement Bank/Credit Bank/Credit Bank/Credit Companies, Others,
• SSL relies on encryption to make these transactions
Companies Companies, Carriers private.
(PayPal, etc)

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Driving Factors in M-Commerce Characteristics of M-Commerce

Characteristics Value-added attributes
• Exponential growth of the internet and e-
Product and service
commerce localization
• Exponential growth of mobile phones Mobility
Product personalization
• Cost of entry is very low
Mobile Ubiquity enhancement
Instant connectivity

Reachability Convenience

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Mobile Payment Issues

Network Financial
User Provider/
Operator Institution

Thank you for your

• Security
• Privacy
• Open
• Authentication
• Integrity
• Getting Paid
• User adoption
• Inter-
• Ease of Use operability • Non-repudiation • Low Cost
• Devices • Roaming • Fraud reduction


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