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Electronic Commerce (EC)

E-Commerce (EC) is the process of buying, selling, or exchanging products, services, and information via computer networks Pure vs. Partial EC: based on the degree of digitization of product, process, delivery agent The field of e-commerce is broad, and there are many of EC applications

E-business is a broader definition of EC that includes not just the buying and selling of goods and services, but also

Servicing customers Collaborating with business partners Conducting electronic transactions within an organization

Components of EC

Components of EC (Continued)
To execute these applications, companies need the right information, infrastructure, and support services.

People: Sellers, buyers, intermediaries, information systems specialists and other employees, and any other participants Public policy: Legal and other policy and regulating issues, such as privacy protection and taxation Marketing and advertising: Like any other business, EC usually requires the support of marketing and advertising Support services: Many services are needed to support EC. They range from payments to order delivery and content creation Business partnerships: Joint ventures, e-marketplaces, and partnerships are some frequently occurring relationships in ebusiness 4

The Benefits of EC
Benefits to Organizations

Expands the marketplace to national and international markets Decreases the cost of creating, processing, distributing, storing and retrieving paperbased information Allows reduced inventories and overhead by facilitating pull-type supply chain management

The pull-type processing allows for customization of products and services which provides competitive advantage to its implementers Reduces the time between the outlay of capital and the receipt of products and services Lowers telecommunications cost - the Internet is much cheaper than value added networks (VANs)

Benefits to consumers

Enables consumers to shop or do other transactions 24 hours a day, all year round from almost any location Provides consumers with more choices Provides consumers with less expensive products and services by allowing them to shop in many places and conduct quick comparisons

Allows quick delivery of products and services (in some cases) especially with digitized products Consumers can receive relevant and detailed information in seconds, rather than in days or weeks Makes it possible to participate in virtual auctions Allows consumers to interact with other consumers in electronic communities and exchange ideas as well as compare experiences

Types of Electronic Commerce

Electronic Commerce Business Business Strategies come in one of the following Strategies three types. All require a sound business models to
be successful (see next)


Brick-and-Mortar & Click-and-Mortar Brick-and-Mortar Strategies

Operate a firm solely in traditional physical markets Approach business activities traditionally by operating physical locations (e.g. stores, offices, manufacturing plants)

Click-and-Mortar Operate a firm in physical locations and has added an EC component to their business Requires maximization of business opportunities in both the physical and virtual environments This strategy requires a significant investment in systems and space

Click-Only Strategy

Business transactions are only conducted virtually Can require significant expertise and investment in technology and systems staff There are many different revenue models


Business Intelligence


BI components
Data warehouse Business analytics Business Performance Management User Interface


BI components and Architecture


Data warehousing


Data Warehouse
A decision support database that is maintained separately from the organizations operational databases. A data warehouse is a

subject-oriented integrated time-varying non-volatile

collection of data that is used primarily in organizational decision making


Components of a Data Warehouse


Data Warehousing Architecture

Monitoring & Administration
Metadata Repository

OLAP servers


External Sources Operational dbs

Extract Transform Load Refresh

Query/ Reporting

Data Mining

Data Marts


Data warehouse architecture

Architecture is of three layers:

Client forms the top tier Middle tier is an OLAP server bottom tier is a warehouse database server


Three-Tier Architecture
Warehouse database server Relational DBMS OLAP servers Special purpose server that directly implements multidimensional data and operations. Clients Query and reporting tools. Analysis tools Data mining tools (e.g., trend analysis, prediction)

Organizational Use of Databases

Extract Data

Extract Data

Department Databases Day to Day Department Transactions Used primarily by departments

Data Warehouse Extracted Department transactions Used for business analysis

Data Mart Extracted subset of a data warehouse Used for highly specific business analysis

Data mart: Subset of data warehouse Contains summarized or highly focused portion of data for a specified function or group of users Data mining: Tools for analyzing large pools of data

Find hidden patterns and infer rules to predict trends


Benefits of Data Warehouses:

Supports reporting and query tools Stores current and historical data

Consolidates data for management analysis and decision making Improved and easy accessibility to information
Ability to model and remodel the data