E-COMMERCE

E-BUSINESS MANAGING THE DIGITAL FIRM

HOW INTERNET TECHNOLOGY HAS CHANGED BUSINESS MODEL & VALUE PROPOSITION. HOW IT IS ALIGNED WITH BUSINESS STRATEGY TO ACHIEVE ORGANISATIONAL GOAL. HOW E-COMMERCE HAS CHANGED CONSUMER RETAILING & BUSINESS-TO-BUSINESS TRANSACTIONS. WHAT ARE THE STRATEGIC ROLE OF E-BUSINESS MODELS. WHAT ARE THE MANAGERIALS & ORGANIZATION CHALLENGES POSED BY E-BUSINESS & E-COMMERCE. HOW INTERNET TECHNOLOGY FACILITATE MANAGEMENT & CO-ORDINATION OF INTERNAL BUSINESS PROCESSES & SUPPLY CHAIN MANAGEMENT. WHAT ARE THE PRINCIPAL PAYMENT SYSTEM FOR ECOMMERCE. 2 UNDERSTANDING THE CONCEPTS & VARIOUS

APPLICATION ISSUES OF E-BUSINESS LIKE INTERNET INFRASTRUCTURE, SECURITY OVER INTERNET, ON-LINE STRATEGIES FOR INTERNET. E-BUSINESS IS ALL ABOUT CYCLE TIME, SPEED, GLOBALIZATION, ENHANCED PRODUCTIVITY, REACHING NEW CUSTOMERS & SHARING KNOWLEDGE ACROSS INSTITUTIONS FOR COMPETITIVE ADVANTAGE.

E-COMMERCE & E-BUSINESS

E-COMMERCE IS AN EMERGING CONCEPT THAT DESCRIBES THE PROCESS OF BUYING & SELLING OR EXCHANGING PRODUCTS & SERVICES & INFORMATION VIA COMPUTER NETWORKS FROM COMMUNICATION PERSPECTIVE:EC IS THE DELIVERY OF INFORMATION, PRODUCTS, SERVICES OR PAYMENTS OVER COMPUTER NETWORK. FROM BUSINESS PROCESS PERSPECTIVE:EC IS THE APPLICATION OF TECHNOLOGY TOWARDS THE AUTOMATION OF BUSINESS TRANSACTION & WORKFLOW. FROM SERVICE PERSPECTIVE:EC IS A TOOL THAT ADDRESSES DESIRE OF THE FIRM, CONSUMER & MANAGEMENT TO CUT SERVICE COSTS WHILE IMPROVING THE QUALITY OF GOODS & INCREASING THE SPEED OF SERVICE DELIVERY.
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 FROM ON-LINE PERSPECTIVE:EC PROVIDES THE CAPABILITY OF BUYING & SELLING PRODUCTS & INFORMATION ON THE INTERNET. E-BUSINESS:- IS A BROADER DEFINITION OF ECOMMERCE, NOT JUST BUYING & SELLING BUT ALSO SERVICING CUSTOMERS & COLLABORATING WITH BUSINESS PARTNERS & CONDUCTING ELECTONIC TRANSACTIONS WITHIN AN ORGANIZATION. THUS EC IS FAIRLY NARROW & E-BUSINESS REFERS TO A BROADER DEFINITION OF E-COMMERCE

INTERNET BUSINESS MODELS

VIRTUAL STORE FRONT SELLS PHYSICAL PRODUCTS DIRECTLY TO CONSUMERS OR TO INDIVIDUAL BUSINESS EX:- AMAZON.COM ON-LINE MARKET PLACE PROVIDES A DIGITAL ENVIRONMENT, WHERE BUYERS & SELLERS CAN MEET, SEARCH FOR PRODUCTS, DISPLAY PRODUCTS & ESTABILISH PRICE FOR THOSE PRODUCTS CAN PROVIDE ON-LINE AUCTIONS CAN SERVE CONSUMERS FOR B2B E-COMMERCE EX:- eBAY.COM, PRICELINE.COM ON-LINE SERVICE PROVIDER PROVIDES ON-LINE SERVICE FOR INDIVIDUALS & BUSINESSES. GENERATES REVENUE FROM SUBSCRIPTION OR TRANSACTION FEES, FROM ADVERTISING OR FROM 6 COLLECTING MARKETING INFORMATION FROM

USERS. EX:- SALESFORCE.COM, EMPLOYEASE.COM TRANSACTION BROKER SAVES USERS MONEY & TIME BY PROCESSING ON-LINE SALES TRANSACTIONS, GENERATING A FEE E ACH TIME A TRANSACTION OCCURS. ALSO PROVIDES INFORMATION ON RATES & TERMS. EX:- E*TRADE.COM, EXPEDIA.COM PORTAL PROVIDES INITIAL ENTRY TO WEB ALONG WITH SPECIALISED CONTENT / SERVICE. EX:-YAHOO.COM VIRTUAL COMMUNITY PROVIDES ON-LINE MEETING PLACE WHERE PEOPLE WITH SIMILAR INTEREST CAN COMMUNICATE & FIND USEFUL INFORMATION EX:- VILLAGE.COM, FORTUNECITY.COM 7 CONTENT PROVIDER

CREATES REVENUE BY PROVIDING DIGITAL CONTENT, SUCH AS DIGITAL NEWS, MUSIC, PHOTOS OR VIDEO OVER THE WEB. THE CUSTOMER MAY PAY TO ACCESS THE CONTENT, OR REVENUE MAY BE GENERATED BY SELLING THE ADVERTISING SPACE EX:- CNN.COM, MP3.COM THE INTERNET CAN HELP COMPANIES CREATE & CAPTURE PROFIT IN NEW WAYS BY ADDING EXTRA VALUE TO EXISTING PRODUCT & SERVICES OR BY PROVIDING FOUNDATION FOR NEW PRODUCTS & SRVICES. BUSINESS-TO-BUSINESS AUCTIONS PROVIDE WEBBASED AUCTION SERVICES FOR B2B SALES OF VARIETY OF PRODUCTS & SERVICES. ON-LINE-BIDDING, ALSO KNOWN AS DYNAMIC PRICING, IS GROWING RAPIDLY BECAUSE BUYERS & SELLERS CAN INTERACT EASILY THRU INTERNET TO DETERMINE WHAT AN ITEM IS WORTH AT ANY 8 PARTICULAR MOMENT

CLASSIFICATION OF E-BUSINESS
A COMMON CLASSIFICATION IS BY NATURE OF TRANSACTIONS 1) BUSINESS TO BUSINESS (B2B) MOST OF THE EC TO DAY IS THIS TYPE & INCLUDES INTERORGANIZATION SYSTEMS LIKE: SUPPLY CHAIN MANAGEAMENT, EDI, ELECTRONIC FUND TRANSFER ETC. 2) BUSINESS TO CONSUMER (B2C) THESE ARE RETAILING TRANSACTIONS WITH CONSUMERS / INDIVIDUAL SHOPPERS EX:- AMAZON.COM 3) CONSUMER TO CONSUMER (C2C) IN THIS CATEGORY CONSUMER SELLS DIRECTLY TO CONSUMER. EX:- ARE INDIVIDUALS SELLING IN CLASSIFIED ADS ( WWW.CLASSIFIED 2000.COM), & SELLING RESIDENTIAL 9 PROPERTY, CAR ETC

 SEVERAL AUCTION SITES PUT ITEM FOR SALE 4) CONSUMER TO BUSINESS (C2B) THIS CATEGORY INCLUDES INDIVIDUALS WHO SELL PRODUCTS OR SERVICES TO ORGANIZATIONS & ALSO INDIVIDUALS WHO SEEK SELLERS, INTERACT WITH THEM & CONCLUDE A TRANSACTION. 5) INTRABUSINESS (OR ORGANIZATIONAL) EC INCLUDES ALL INTERNAL ORGANIZATIONAL ACTIVITIES, USUALLY PERFORMED ON INTRANETS, THAT INVOLVE EXCHANGE OF INFORATION, GOODS, SERVICES. EX:- INCLUDES ON-LINE TRAINING TO EMPLOYEES, SELLING CORPORATE PRODUCTS TO EMPLOYEES ETC.

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INTERNET
INTERNET IS A PUBLIC & GLOBAL COMMUNICATION NETWORK THAT PROVIDES DIRECT CONNECTIVITY TO ANYONE OVER A LOCAL AREA NETWORK (LAN) OR INTERNET SERVICE PROVIDER (ISP) IT IS A PUBLIC NETWORK THAT IS CONNECTED & ROUTED OVER GATEWAYS END USERS ARE CONNECTED TO LOCAL ACESS PROVIDERS (LAN OR ISPS), WHO ARE CONNECTED TO INTERNET ACCESS PROVIDERS & EVENTUALLY TO INTERNET BACKBONE. SINCE ACCESS TO INTERNET IS OPEN TO ALL, THERE IS A LACK OF CONTROL THAT MAY RESULT IN AN UNRULY PROCIFERATION OF INFORMATION. OWING TO THE VAST SCOPE OF PUBLIC & ADVERTISING INFORMATION, USERS NEED EFFECTIVE & EFFICIENT SEARCH ENGINES TO NAVIGATE THE SEA OF 11 INFORMATION.

A NETWORK OF NETWORKS FROM A PHYSICAL STAND POINT, INTERNET IS A NETWORK OF THOUSANDS OF INTERCONNECTED NETWORKS. INTERCONNECTED NETWORK INCLUDES:1) INTERCONNECTED BACK BONES THAT HAVE INTERNATIONAL REACH 2) A MULTITUDE OF ACCESS / DELIVERY SUBNETWORKS. 3) THOUSANDS OF PRIVATE & INSTITUTIONAL NETWORK CONNECTING VARIOUS ORGANIZATIONAL SERVERS & CONTAINING MUCH OF THE INFORMATION OF INTEREST.

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ISP

ISP

ISP

NAP NAP

NAP ISP NAP ISP ISP ISP

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ISP

ISP

NAP = ISP = =

NETWORK ACCESS POINTS NETWORK SERVICE PROVIDER BACKBONE

BACKBONES ARE RUN BY NETWORK SERVICE PROVIDERS (NSP) EX:- MCI, SPRINT, UUNET ETC. THE DELIVERY SUBNET WORKS ARE PROVIDED BY THE LOCAL & REGIONAL INTERNET SERVICE PROVIDERS (ISP) ISPS EXCHANGE DATA WITH THE NSPS AT THE NETWORK ACCESS POINTS (NAPS) - PACIFIC BELL NAP & AMERITECH NAP ETC ARE EXAMPLE OF THESE EXCHANGE POINTS
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- HOW IT WORKS WHEN A USER ISSUES A REQUEST ON THE INTERNET FROM HIS COMPUTER THE REQUEST WILL GO THRU AN ISP NETWORK, MOVE OVER ONE OR MORE BACKBONE & ACROSS ANOTHER ISP NETWORK TO THE COMPUTER CONTAINING THE INFORMATION OF INTEREST. THE RESPONSE TO THE REQUEST WILL FOLLOW A SIMILAR PATH. FOR ANY GIVEN REQUEST & ASSOCIATED RESPONSE, THERE IS NO PRESET PATH. INFACT THE REQUEST & RESPONSE ARE BROKEN INTO PACKETS & THE PACKETS CAN FOLLOW DIFFERENT PATHS. THE PATH TRAVERSED BY THE PACKETS ARE DETERMINED BY SPECIAL COMPUTERS CALLED ROUTERS. THE ROUTERS HAVE UPDATEABLE MAPS OF THE NETWORKS ON THE INTERNET THAT ENABLE THEM TO 15 DETERMINE THE PATHS FOR THE PACKETS.

(CISCO IS THE PREMIER PROVIDER OF HIGH SPEED ROUTERS) ORGANIZATIONAL LAN HAS GATEWAY COMPUTERS TO ACCESS INTERNET.

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WORLD WIDE WEB (WWW) FOR BUSINESS USE OF INTERNET

WEB IS A SYSTEM WITH UNIVERSALLY ACCEPTED STANDARDS FOR STORING, RETRIEVING, FORMATTING & DISPLAYING INFORMATION USING A CLIENT/SERVER ARCHITECTURE. CAN HANDLE ALL TYPES OF DIGITAL COMMUNICATION WHILE LINKING RESOURCES THAT ARE SPREAD ACROSS THE GLOBE. THE WEB USES GRAPHICAL USER INTERFACE (GUI) FOR EASY VIEWING. IT IS BASED ON A STANDARD HYPERTEXT LANGUAGE CALLED HYPERTEXT MARK UP LANGUAGE (HTML), WHICH FORMATS DOCUMENTS & INCORPORATES DYNAMIC LINKS TO OTHER DOCUMENTS & PICTURES STORED IN THE SAME OR REMOTE NETWORK COMPUTERS. 17 USING THESE LINKS THE USER NEED ONLY TO POINT AT

A HIGHLIGHTED KEY WORD OR GRAPHIC, CLICK ON IT, & IMMEDIATE BE TRANSPORTED TO ANOTHER DOCUMENTLY, PROBABLY ON ANOTHER COMPUTER SOMEWHERE ELSE IN THE WORLD. USERS ARE FREE TO JUMP FROM PLACE TO PLACE FOLLOWING THEIR OWN LOGIC & INTEREST. WEB BROWSER SOFTWARE IS PROGRAMMED ACCORDING TO HTML STANDARDS WHICH IS UNIVERSALLY ACCEPTED. EX:- INTERNET EXPLORER, NETSCAPE NAVIGATOR ANYONE USING A BROWSER CAN ACCESS MILLIONS OF WEB SITES. BROWSERS USE HYPERTEXTS POINT-AND-CLICK ABILITY TO NAVIGATE OR SURF - MOVE FROM SITE TO SITE ON THE WEB TO ANOTHER DESIRED SITE. BROWSER INCLUDES VARIOUS FEATURES LIKE CLICK THE BACK BUTTON TO RETRACE THE STEPS, 18 NAVIGATE BACK SITE BY SITE.

HOME PAGE: THOSE WHO OFFER INFORMATION THRU WEB, MUST ESTABLISH A HOME PAGE A TEXT & GRAPHICAL SCREEN DISPLAY THAT USUALLY EXPLAINS THE ORGANIZATION & OTHER DETAILS. THE PERSON IN CHARGE OF AN ORGANIZATIONS WEB SITE IS THE WEBMASTER. UNIFORM RESOURCE LOCATOR (URL); TO ACCESS A WEBSITE, THE USER MUST SPECIFY A URL, WHICH POINTS TO THE ADDRESS OF A SPECIFIC RESOURCE ON THE WEB. EX:URL FOR PRENTICE HALL IS http://WWW.PRENHALL.COM http IS HYPERTEXT TRANSPORT PROTOCOL SEARCH ENGINES: USED FOR SEARCHING INFORMATION ON THE WEB EX:- YAHOO, MSN, GOOGLE ETC. BILLIONS OF WEB PAGE EXIST & NO COMPREHENSIVE 19 CATALOG IS AVAILABLE FOR THE WEB SITES

COMMUNICATION PROTOCOL

SEARCH ENGINE CONTAIN SOFTWARE THAT LOOKS FOR WEB PAGES CONTAINING THE DESIRED KEY WORD. SHOPPING BOT:- SOFTWARE WITH VARYING LEVELS OF BUILT-IN INTELLIGENCE TO HELP E-COMMERCE SHOPPERS LOCATE & EVALUATE PRODUCTS OR SERVICES THEY MIGHT WISH TO PURCHASE. CAN HELP PEOPLE INTERESTED IN MAKING A PURCHASE, FILTER & RETRIEVE INFORMATION ABOUT DESIRED PRODUCT OF INTEREST, EVALUATE COMPETING PRODUCTS, LOWEST PRICE ETC. EX:E-COMMERCE AGENT DESCRIPTION 1) VALUEFIND SEARCHES FOR BEST DEAL FROM VENDORS AUCTIONS & CLASSIFIED ADS.
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2) BEST BOOK BUYS.COM

SHOPPING BOT SEARCHES 26 ONLINE BOOK STORES TO HELP USERS FIND THE LOWEST PRICES FOR TITLES THEY SPECIFY

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INTRANET
IS A DEDICATED NETWORK (INTERNET) TO A COMPANY WHOSE ACCESS IS PROTECTED (BY A SERVER CALLED FIREWALL) IT IS A PRIVATE INTERNAL ORGANIZATIONAL NETWORK THAT CAN PROVIDE ACCESS TO DATA ACROSS THE ENTERPRISE. IT USES COMPANY NETWORK ALONG WITH INTERNET CONNECTIVITY STANDARDS. INTRANET LINKS VARIOUS SERVERS CLIENTS, DATABASES & APPLICATION PROGRAMS LIKE ERP INTRANETS ARE DEVELOPED ON THE SAME TCP/IP PROTOCOL AS INTERNET, BUT THEY OPERATE ON A PRIVATE NETWORK WITH LIMITED (AUTHORISED ACCESS) INTRANETS ARE LIMITED TO INFORMATION PERTINENT TO THE COMPANY & CONTAIN EXCLUSIVE & OFTEN 22 PROPRIETARY SENSITIVE INFORMATION

THE INTRANET CAN BE USED TO ENHANCE THE COMMUNICATION & COLLABORATION AMONG AUTHORISED EMPLOYEES, CUSTOMERS, SUPPLIERS & OTHER BUSINESS PARTNERS. INTRANET ALLOWS ACCESS THRU THE INTERNET, HENCE DOES NOT REQUIRE A SEPARATE IMPLEMENTATION OF A LEASED NETWORK.

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CLIENT

SERVER ERP
OTHER APPLICATIONS EMAIL SERVER

FIRE WALL
PUBLIC/ EXTERNAL INTERNET USERS

INTERNET WEB SERVER

PRODUCT DATA BASE ARCHITECTURE OF INTRANET

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EXTRANET
EXTRANET (OR EXTENDED INTRANET) PRIVATE INTRANETS THAT ARE EXTENDED TO AUTHORISED USERS OUTSIDE THE COMPANY ARE EXTRANETS EXTRANETS ARE USEFUL FOR LINKING ORGANIZATIONS WITH SUPPLIERS, CUSTOMERS OR BUSINESS PARTNERS. USED FOR COLLABORATION FOR SUPPLY CHAIN MANAGEMENT, PRODUCT DESIGN & DEVELOPMENT OR TRAINING. EXTRANET TRANSMISSIONS ARE USUALLY CONDUCTED OVER INTERNET WHICH OFFERS LITTLE PRIVACY OR SECURITY. SO IT IS NECESSARY TO IMPROVE THE SECURITY OF THE CONNECTING PORTIONS OF THE INTERNET. - THIS IS DONE BY CREATING TUNNELS OF SECURED DATA FLOWS, USING CRYPTOGRAPHY & ALGORITHMS. INTERNET WITH TUNNELING TECHNOLOGY IS CALLED VIRTUALLY PRIVATE NAETWORK OR VPN 25

I SUPPLIERS FIREWALL INTRANET DISTRIBUTORS TUNNELING INTERNET INTRANET

CUSTOMERS

FIREWALL VIRTUALLY PRIVATE NETWORK

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II CUSTOMER

DATABASE

CLIENT SUPPLIER BUSINESS PARTNER INTERNET SERVER FIREWALL CLIENT CLIENT

MODEL OF AN EXTRANET
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EXTRANETS PROVIDE SECURED CONNECTIVITY BETWEEN A CORPORATIONS INTRANETS & THE INTRANETS OF ITS BUSINESS PARTNERS, MATERIAL SUPPLIERS, GOVT., FINANCIAL SERVICES & CUSTOMERS ACCESS IS LIMITED BY AGREEMENTS OF THE COLLABORATING PARTIES & STRICTLY CONTROLLED & ONLY AVAILABLE TO AUTHORISED PARTIES. TO INCREASE SECURITY, MANY COMPANIES REPLICATE THE DATABASE THEY ARE WILLING TO SHARE & SEPARATE FROM REGULAR INTRANETS.

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ELECTRONIC DATA INTERCHANGE

ELECTRONIC DATA INTERCHANGE (EDI) IS A TECHNOLOGY FOR E-COMMERCE THAT ALLOWS COMPUTER-TO-COMPUTER EXCHANGE BETWEEN TWO ORGANIZATIONS OF STANDARD TRANSACTION DOCUMENTS SUCH AS INVOICES, BILLS OF LADING OR PURCHASE ORDERS. EDI LOWERS COSTS BECAUSE TRANSACTION CAN BE AUTOMATICALLY TRANSMITTED FROM ONE INFO SYSTEM TO ANOTHER THRU A TELECOMMUNICATION NETWORK ELIMINATES PRINTING & HANDLING OF PAPER AT ONE END & INPUTTING OF DATA AT THE OTHER EDI CAN PROVIDE STRATEGIC BENEFIT BY HELPING A FIRM LOCK-IN-CUSTOMER. EDI CAN REDUCE INVENTORY COSTS BY MINIMIZING THE TIME COMPONENTS ARE IN INVENTORY 29 EDI DIFFERS FROM E-MAIL IN THAT IT TRANSMITS AN

ACTUAL STRUCTURED TRANSACTION (WITH DISTINCT FIELDS SUCH AS THE TRANSACTION DATA, AMOUNT, SENDERS/RECEPIENTS NAME ETC) - AS DIFFERENT FROM AN UNSTRUCTURED TEXT MESSAGE SUCH AS LETTER. HOW EDI WORKS SELLER PURCHASE ORDERS PAYMENTS COMPUTER SHIPPING ADVICE PRICE UPDATES INVOICES
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CUSTOMER

COMPUTER

PURCHASE ORDER & PAYMENTS CAN BE TRANSMITTED DIRECTLY FROM THE CUSTOMERS COMPUTER TO SELLERS COMPUTER SELLER CAN TRANSMIT SHIPPING NOTICE, PRICE CHANGES & INVOICES ELECTONICALLY BACK TO CUSTOMER. EDI DATA IS INTEGRATED WITH APPLICATIONS SUCH AS ACCOUNTS PAYABLE, INVENTORY CONTROL, SHIPPING, PRODUCTION PLANNING ETC. COMPANIES MUST STANDADISE THE FORM OF THE TRANSACTION THEY USE WITH OTHER FIRMS & COMPLY WITH LEGAL REQUIREMENTS FOR VERIFYING AUTHENTICITY OF TRANSACTION.

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(1) E-MAIL FAX

INVENTORY PURCHASE PURCHASE ORDER CONTROL TELEORDER ORDER ENTRY MATERIALS PHONE MANAGEMENT POST OFFICE COURIER BUYERS COMPUTER

EDI

SELLERS COMPUTER

MANUFACTRING WARE HOUSING TRANSPORT 32 TRADITIONAL METHODS VS EDI

(2) BUYERS BUSINESS APPLICATION EDI TRANSACTIONS REQUEST FOR QUOTE QUOTE PURCHASE ORDER P.O ACKNOWLEDGE STATUS REQUEST RESPONSE SHIPPING NOTICE INVOICE PAYMENT REMITTANCE ADVICE SELLERS BUSINESS APPLICATION ORDER PROCESSING

PURCHASING

ACCOUNTS PAYABLE

ACCOUNTS RECEIVABLE

EDI ENABLED PROCUREMENT PROCESS

APPLICATION TO APPLICATION EDI DATA ONCE ENTERED INTO BUYERS COMPUTER SYSTEM, GETS TRANSMITTED ELECTONICALLY & SAME DATA ENTERS SELLERS COMPUTER, WITHOUT REKEYING REDUCES TIME INCRESES ACCURACY LOWER LABOUR COST LOWER UNCERTAINTY EDI INTEGRATES WITH BUSINESS APPLICATIONS AUTOMATES EXCHANGE OF COMMON BUSINESS DOCUMENTS:- REQUEST FOR QUOTATION, PURCHASE ORDER, BILL OF LADING, RECEIVING ADVICE, INVOICE ETC CONSTITUTE 85% OF COMMERCIAL COMMUNICATIONS AMONG BUSINESS, GOVT. ETC. EDI CANNOT BE UNDERTAKEN UNILATERALLY BUT REQUIRES CO-OPERATION & PARTICIPATION OF 34 TRADING PARTNERS.

LARGE RETAIL STORES TRANSACT BUSINESS WITH LARGE NUMBER OF SUPPLIERS THRU EDI. IN MANUFACTURING SECTOR, EDI HAS ENABLED JUSTIN-TIME (JIT) CONCEPT OF INVENTORY. EDI REDUCES INVENTORY & OPERATING CAPITAL REQUIREMENT.

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COMPONENTS OF EDI SYSTEMS

1. 2. 3. 1. THREE MAIN COMPONENTS TO BE ABLE TO SEND OR RECEIVE EDI MESSAGES ARE EDI STANDARDS EDI SOFTWARE THIRD PARTY NETWORK FOR COMMUNICATION EDI STANDARD:- EXCHANGE OF INFORMATION SHOULD BE INDEPENDENT OF HARDWARE, SOFTWARE AT EITHER END OF TWO ORGANIZATIONS ACCORDINGLY DATA IS EXTRACTED FROM BUSINESS APPLICATION & TRANSFORMED INTO A STANDARD FORMAT WHICH IS ACCEPTABLE BY ALL. UN/EDIFACT:- (EDI FOR ADMINISTRATION, COMMERCE & TRANSPORT) STANDARD WAS ANNOUNCED BY THE UNITED NATIONS IN 1987 EDIFACT STANDARD HAS SINCE BEEN PROMOTED BY 36 UNITED NATINS FOR INTERNATIONAL TRADE.

2. EDI SOFTWARE:- EDI SOFTWARE CONSISTS OF COMPUTER INSTRUCTIONS THAT TRANSLATE THE INFORMATION IN COMPANY SPECIFIC UNSTRUCTURED FORMAT TO THE STRUCTURED EDI FORMAT 3. COMMUNICATION NETWORK:- EDI DOCUMENTS ARE ELECTRONICALLY EXCHANGED OVER COMMUNICATION NETWORKS WHICH CONNECT TRADING PARTERNS.

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BENEFITS OF EDI
DIRECT BENEFIT 1. AUTOMATIC TRANSFER OF BUSINESS DOCUMENTS FROM COMPUTER TO COMPUTER NO NEED FOR DATA RE-ENTERING 2. COST OF PROCESSING EDI DOCUMENT IS MUCH LESS THAN PAPER DOCUMENT 3. CUSTOMER SERVICE IS IMPROVED REDUCES ERROR STRATEGIC BENEFITS 1. IMPROVED CUSTOMER RELATION THRU BETTER QUALITY & SPEED OF SERVICE 2. MORE ACCUREATE SALES FORE CASTING & BUSINESS PLANNING POSSIBLE SINCE INFORMATION AVAILABLE AT RIGHT TIME. 3. COMPETITIVE EDGE IS MAINTAINED & SUSTAINED. - THOUGH THE INITIAL COST OF EDI IMPLEMENTATION MAY APPEAR HIGH, THE LONG TERM BENEFITS ARE 38 MUCH MORE.

LEGAL ASPECTS:- WITH PAPER DOCUMENTS, CERTAIN LEGAL TERMS & CONDITIONS ARE PRINTED ON THE BACK OF EACH FORM. WITH EDI, THE SAME INFORMATION IS ACCOUNTED FOR IN TRADING PARTNERS AGREEMENTS THE LAW OF THE LAND ALSO NEEDS MODIFICATION FOR CONDUCTING ELECTRONIC BUSINESS TRANSACTIONS

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LEVERAGING TECHNOLOGY IN VALUE CHAIN E-BUSINESS

VALUE CHAIN MODEL HIGHLIGHTS THE PRIMARY OR SUPPORT ACTIVITIES THAT ADD A MARGIN OF VALUES TO A FIRMS PRODUCT OR SERVICES MODEL IDENTIFIES WHERE INFORMATION SYSTEMS CAN BEST APPLIED FOR COMPETIVE ADVANTAGE, THRU E-BUSINESS MODELS PRIMARY ACTIVITES:ACTIVITIES MOST DIRECTLY RELATED TO THE PRODUCTION & DISTRIBUTION OF A FIRMS PRODUCT OR SERVICES.
INBOUND LOGISTICS OPERATIONS SALES & MKTG SERVICE OUTBOUND LOGISTICS
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FIRMS VALUE CHAIN

SUPPORT ACTIVITIES:ACTIVITIES THAT MAKE THE DELIVERY OF A FROMS PRIMARY ACTIVITES POSSIBLE CONSIST OF ORGANISATIONS INFRASTRUCTURE, HUMAN RESOURCES, TECHNOLOGY, & PROCUREMENT ADMINISTRATION & MANAGEMENT HUMAN RESOURCE TECHNOLOGY PROCUREMENT ORGANIZATIONS HAVE COMPETITIVE ADVANTAGE WHEN THEY PROVIDE MORE VALUE TO THEIR CUSTOMERS. INDUSTRY VALUE CHAIN FIRM DISTRIBUTORS CUSTOMERS CRM
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RAW COMPOMATERIAL NENT SUPPLIER SUPPLIER SOURCING & PROCUREMENT SYSTEM

VLUE CHAIN ANALYSIS & STRATEGIC INFORMATION SYSTEMS FRAMEWORK

VALUE CHAIN CONCEPT OF BUSINESS PROCESS WAS DEVELOPED BY M.PORTER & HELPS TO DECIDE WHERE & HOW TO APPLY THE STRATEGIC CAPABILITES OF INFORMATION SYSTEMS VALUE CHAIN CONCEPT VIEWS THE FIRM AS A SERIES, CHAIN OR NETWORK OF BASIC ACTIVITIES THAT ADD VALUE TO ITS PRODUCTS & SERVICES & THUS ADD A MARGIN OF VALUE TO THE FIRM (SIS ; STRATEGIC INFORMATION SYSTEM)

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SUPPORT PROCESS

ADMINISTRATIVE SUPPORT SIS WORKFLOW INTRANET HUMAN RESOURCE MGMT. SIS INTRANET FOR HRD TECHNOLOGY DEVELOPMENT SIS COMPUTER AIDED DESIGN PROCUREMENT OF RESOURCE SIS E-COMMERCE
OUTBOUND LOGISTICS SIS MKTG & SALES SIS

VE TI ES TI G PE TA M AN CO V AD

RY BUSINESS PROCESS

INBOUND OPERATIONS LOGISTICS SIS SIS AUTOMATE D JUST IN TIME W HSNG - COMPUTER AIDED

CUSTOMER SERVICE SIS

- ON-LINE POS - CRM & ORDER INTERACTI PROCESSING VE MANUFACTURI MARKETIN NG G

VALUE CHAIN OF FIRM VALUE CHAIN CONCEPT HELP TO DECIDE WHERE & HOW TO APPLY STRATEGIC CAPABILITES OF INFORMATION SYSTEMS 43 WITH E-BUSINESS MODEL.

SECURITY PROTOCOLS OVER PUBLIC NETWORK

SET = SECURE ELECTONIC TRANSACTION [DES = DATA ENCRYPTION STANDARD] SSL = SECURE SOCKET LAYER [RSA = RIVEST, SHAMIR & ADELMAN] SET & SSL ARE SECURITY PROTOCOLS [ DES & SSA ARE ALGORITHMS FOR ENCRYPTION / DECRYPTION] SECURITY OF TRANSACTIONS IN ELECTRONIC MODE IS ENSURED WITH PROTOCOLS (RULES) LIKE SET & SSL PROTOCOL:- IS A STANDAD SET OF RULES & PROCEDURES FOR THE CONTROL OF COMMUNICATION IN A NETWORK. HTTP:- STANDS FOR HYPERTEXT TRANSPORT PROTOCOL WHICH IS THE COMMUNICATION STANDARD (RULE), USED TO TRANSFER PAGES ON THE WEB (TRANSMISSION CONTROL PROTOCOL) HTTP DEFINES HOW MESSAGES ARE FORMATTED & 44

TRANSMITTED & WHAT ACTIONS WEB SERVERS & BROWSERS SHOULD TAKE IN RESPONSE TO VARIOUS COMMANDS. EX:- TO ACCESS WEBSITE OF PRENTICE HALL USER SPECIFIES A URL (UNIFORM RESOURCE LOCATOR) WHICH POINTS TO SPECIFIC RESOURCE ON WEB URL IS : http://www.prentfall.com prenthall.com IS THE DOMAIN NAME INDENTIFYING THE WEBSERVER STORING THE WEB PAGE. SSL (SECURE SOCKET LAYER) & SET (SECURE ELECTRONIC TRANSACTION) ARE PROTOCOLS USED TO ENSURE SECURE ELECTONEIC PAYMENTS. EX:- ONLINE PURCHASE ON INTERNET USING CREDIT CARD CREDIT CARD INFORMATION IS VULNERABLE TO INTERCEPTION BY NET WORK SNIFFERS. i.e SOFT WARES THAT EASILY RECOGNIZES CREDIT CARD NUMBER 45 FORMATS

BASIC SECURITY MEASURES USED ARE ENCRYPTION TECHNIQUES. SECURE SOCKET LAYER (SSL) SECURITY METHOD, DEVELOPED BY NETSCAPE COMMUNICATIONS, AUTOMATICALLY ENCRYPTS DATA PASSING BETWEEN USER WEB BROWSER & MARCHANTS SERVER. CUSTOMER REQUEST MERCHANT CLIENT BROWSER MERCHANT WEB SERVER

VERIFY MERCHANT RECEIVE ORDER & PAYMENT INFO CONFIREM ORDER

VERIFY CUSTOMER REVIEW PAYMENT INFO AUTHORISE OR ON-LINE DENY PAYMENT THIRD PARTY COMPUTER PAYMENT SERVER BANK A/C - DEBIT CARD BILL PAYMENT
46

CREDIT CARDS - VISA - MASTER CARD

HOWEVER, SENSITIVE INFORMATION CAN BE MISUSED ONCE DECRYPTED & STORED IN MERCHANTS SERVER SO, A DIGITAL WALLET SYSTEM IS USED FOR PAYMENTS, WHICH ADDS SECURITY SOFTWARE MODULES IN CUSTOMERS WEB BROWSER. THIS ENABLES CUSTOMER BROWSER TO ENCRYPT THE CREDIT CARD DATA IN SUCH A WAY THAT ONLY THE BANK THAT AUTHORISES CREDIT CARD TRANSACTION FOR THE MERCHANT CAN SEE IT. ALL THE MERCHANT IS TOLD IS WHETHER YOUR CREDIT CARD TRANSACTION IS APPROVED OR NOT.

47

CARD HOLDER

MERCHANT (3) AUTHORIZATION

(2) SHOW CAREDIT CARD

(4) CAPTURE (1) ISSUE CREDIT CARD BRAND CARD (VISA/MASTER CARD
PA YM

T AMOUNT RA NS F

ISSUER BANK

ER

EN T

ACQUIRER BANK

REQUEST

CARD HOLDER ACCOUNT

MERCHANT ACCOUNT
48

CREDIT CARD PROCEDUDRE

IN CONVENTIONAL CREDIT CARD SYSTEM THE PROCESS IS PARTIALLY AUTOMATED - APPROVAL / NONAPPROVAL IS TRANSMITTED ON A PRINTED PAPER TO BE SIGNED OR IN MANY COUNTRY, REQUEST FOR APPROVAL IS MADE ON PHONE. ALSO MERCHANTS HAVE TO MAIL THE PAPER COPY (SALES SLIP) TO ACQUIRER BANK FOR CAPUTRING TO ENTIRELY AUTOMATE THE PROCESS SET (SECURE ELECTRONIC TRANSACTION) WAS DEVISED. SET STANDARD FOR ELECTONIC PAYMENT SECURITY EXTENDS THE DIGITAL WALLET APPROACH. IN THIS METHOD, ENCRYPTION SOFT WARE ENCRYPTS A DIGITAL ENVELOPE OF DIGITAL CERTIFICATES SPECIFYING PAYMENT DETAILS FOR TRANSACTIONS. SET HAS BEEN AGREED BY VISA, MASTERCARD & MANY INDUSTRY PAYERS. HOWEVER, SET IS FACING RELUCTANCE OF
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COMPANIES TO INCUR INCREASED HARDWARE, SOFTWARE COSTS REQUIREMENT. FIRE WALLS:- ARE HARDWARES & SOFTWARES PLACED BETWEEN ORGANIZATIONS INTERNAL NETWORK & AN EXTERNAL NETWORK, TO PREVENT OUTSIDER FROM INVADING PRIVATE NETWORK.

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INTERNET SECURITY CHALLENGES

1 CLIENT 1 COMPUTER VIRUSES LINE TAPS LOSS OF MACHINE 2 3 SERVER 4 DATA BASE CORPORATE SYSTEM 3 4 HACKING COPYING OF COMPUTER DATA ALTERATION OF VIRUS THEFT& FRAUD DATA 2 VANDALISM THEFT OF DATA TAPPINGS DENIAL OF SNIFFING SERVICE ATTACK MESSAGE ALTERATION THEFT & 51 FRAUD

MANAGEMENT SERVICE PROVIDERS (MSP) MANY COMPANIES LACK THE RESOURCES TO PROVIDE SECURED & HIGH AVAILABILITY COMPUTING ENVIRONMENT. MSPS CAN BE OUTSOURCED TO HANDLE TASKS SUCH AS NETWORK SYSTEMS, STORAGE & SECURITY MANAGEMENT OF SUBSCRIBING CLIENTS.

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SECURITY THREATS TO E-BUSINESS

AS A MANAGER, YOU WANT TO ENSURE THAT EBUSINESS TRANSACTIONS THRU THE FIRMS SYSTEMS ARE RELIABLE & SECURE SECURITY:- REFERS TO POLICIES, PROCEDURES & TECHNICAL MEASURES USED TO PREVENT UNAUTHORISED ACCESS, THEFT, ALTERATION OR PHYSICAL DAMAGE TO E-BUSINESS SYSTEM AWARENESS, PREPAREDNESS FOR SECURITY AGAINST DISASTER THE WORLD TRADE CENTRE DISASTER CASE. MERILL LYNCH:- HAD OVER 9000 EMPLOYEES WORKING AT WTC & NEARBY WORLD FINANCIAL CENTER NEAR BY THE FIRM DID NOT SUFFER MUCH AS OTHERS SINCE IT HAD REDUNDANT TELECOM CAPABILITY:CONTINGENCY PLAN SECURITY IS OFTEN CITED AS MAJOR BARRIER TO 53

E-BUSINESS PROSPECTIVE BUYERS ARE CONCERNED ABOUT SENDING CREDIT CARD INFORMATION OVER THE WEB. PROSPECTIVE SELLERS WORRY THAT HACKERS WILL TEMPER THEIR SYSTEMS NEED FOR SECURITY INTENSIFIES AS E-BUSINESS IS GROWING EVEN MARKETING SITES ON THE WEB ARE HARMED FROM SECURITY BREACAES

54

MAJOR ASPECTS FOR SECURE E-BUSINESS

IDENTIFIED BY NATIONAL COMPUTER SECURITY ASSOCIATION (NCSA) 1) AUTHENTICITY:- IS THE SENDER OF A MESSAGE (CLIENT OR SERVER), WHO THEY CLAIM TO BE? - IN TCP/IP, THE MEANS OF VERIFYING THE IDENTITY OF A USER IS A PASSWARD BUT PASSWARDS CAN BE GUESSED & INTERCEPTED - IP ADDRESS CAN BE SECREENED TO PREVENT UNAUTHORISED ACCESS BUT IP HAS NO WAY OF VERIFYING THAT A PACKET HAS COME FROM A PARTICULAR DOMAIN BY IP SPOOFING TECHNIQUE, A HACKER CAN SEND A MESSAGE THAT APPEARS TO COME FROM A PARTICULAR DOMAIN WHEN IN FACT IT DOES NOT. 2) PRIVACY:- ARE THE CONTENTS OF THE MESSAGE SECRET & ONLY KNOWN TO THE SENDER OR RECEIVER?
55

BREACHES TO PRIVACY CAN OCCUR BOTH DURING & AFTER TRANSMISSION. - SENDER MUST BE ASSURED THAT CONTENTS REMAIN PRIVATE. 3) INTEGRITY:- HAVE THE CONTENTS OF A MESSAGE BEEN MODIFIED (INTENTIONALLY OR ACCIDENTALLY) DURING TRANSMISSION? 4) NON-REPUDIATION:- CAN THE SENDER DENY THAT HE SENT THE MESSAGE?

56

ENCRYPTION
1) 2) 3) 4) CRYPTOGRAPHY ENSURES PRIVACY OF MESSAGE & EVEN THEY FALL IN WRONG HAND, THEY CAN NOT BE READ. USES MATHEMATICAL FORMULAS CRYPTOGRAPHY HAS FOUR BASIC PARTS:PLAINTEXT:ORIGINAL MESSAGE IN HUMAN READABLE FORM CYPHERTEXT:THE TEXT MESSAGE AFTER ENCRYPTION INTO UNREADABLE FORM ENCRYPTION ALGORITHM:- THE MATHEMATICAL FORMULA USED TO ENCRYPT THE PLAINTEXT INTO CYPHERTEXT & VICE VERSA. KEY:- THE SECRET KEY USED TO ENCRYPT & DECRYPT A MESSAGE DIFFERENT KEYS PRODUCE DIFFERENT CYPHERTEXT WHEN USED WITH THE SAME ALGORITHM 57 CRYPTOGRAPHY ENABLES NOT ONLY TEXT BUT ALSO

DIGITAL MODE VIDEO, SOUND & S/W PROGRAMMES. EVEN IF THE ALGORITHM IS KNOWN, THE MESSAGE IS STILL SECURE AS LONG AS THE KEY IS UNKNOWN. DIFFERENT ALGORITHMS CAN BE USED TO ENCRYPT MESSAGES LENGTH OF THE KEY IS MAIN FACTOR IN SECURING A MESSAGE. (IF A KEY WERE ONLY 4 BITS LONG (0101) THERE WOULD BE 16 POSSIBILITIES: 2*4 = 16 IF IT IS 56 BITLONG, 56 POSSIBILITY WILL BE 2* THERE ARE VARIETY OF ENCRYPTION ALGORITHM WHEN SAME KEY IS USED TO ENCRYPT & DECRYPT A MESSAGE, AT SENDER & RECEIVER END, IT IS CALLED PRIVATE KEY ENCRYPTION

58

PRIVATE KEY

PRIVATE KEY

MESSAGE CYPHERED MESSAGE ENCRYTPTION TEXT DECRYTP- TEXT TEXT TION SENDER DES 56 BIT KEY RECEIVER

PRIVATE KEY ENCRIPTION IS ALSO CALLED SYMMETRICAL KEY ENCRIPTION SENDER & RECEIVER HAS TO AGREE IN ADVANCE ON THE KEY. PROBLEM WITH PRIVATE KEY:- MANY INTERNET MESSAGES ARE SENT BETWEEN PEOPLE OR PEOPLE & MACHINES THAT HAVE NEVER MET ANOTHER DIFFICULTY IS THAT WEB SERVERS ARE 59 ACCESSED BY MANY PEOPLE

SO IF A SERVERS PRIVATE KEY IS DISTRIBUTED TO THOUSANDS OF USERS, NO WAY IT WILL NOT REMAIN SECRET. THIS PROBLEM IS AVOIDED BY A NEW TYPE OF ENCRYPTION CALLED PUBLIC KEY ENCRYPTION OR ASYMMETRICAL KEY ENCRYPTION. PUBLIC KEY ENCRYPTION USES A PAIR OF KEYS ONE PUBLIC & ONE PRIVATE. THE PUBLIC KEY IS MADE AVAILABLE TO ANY ONE WHO WANTS TO SEND AN ENCRYPTED MESSAGE TO THE HOLDER OF PRIVATE KEY THE RECEIVER. DECRYPTION CAN BE DONE ONLY WITH PRIVATE KEY

60

PUBLIC KEY OF RECEPIENT MESSAGE TEXT CYPHERED TEXT

PRIVATE KEY OF RECEPIENT MESSAGE TEXT

ENCRYTPTION

SENDER RECEIVER PUBLIC KEY IS MADE AVAILABLE TO ANY SENDER WHO WANTS TO SEND AN ENCRYPTED MESSAGE TO HOLDER OF PRIVATE KEY UNLIKE SYMMETRICAL ENCRYPTION, ONLY FEW ALGORITHMS ARE USED IN PUBLIC KEY MESSAGES. RSA ALGORITHM IS MOST WIDELY USED EMPLOYING KEY LENGTH FROM 512 1024 BITS. PROBLEM WITH PUBLIC KEY ALGORITHM IS SPEED, COMPARED TO PRIVATE KEY OR SYNCHRONOUS ENCRYPTION DUE TO LENGTH OF KEY:- 56 BIT DES VS 61 1024 BIT RSA.

DECRYTPTION

DIGITAL SIGNATURE
AUTHENTICITY & NON-DENIAL - HOW TO ENSURE? DIGITAL SIGNATURE IS THE NETWORK EQUIVALENT OF A PERSONAL SIGNATURE THAT CANNOT BE COPIED. GLOBAL & NATIONAL COMERCE ACT 2000 GIVEN LEGAL STATUS TO DIGITAL SIGNATURE IT IS A DIGITAL CODE ATTACHED TO AN ELECTRONICALLY TRANSMITTED MESSAGE & USED TO VERIFY THE ORIGIN PUBLIC KEY PRIVATE KEY OF RECEIVER OF RECEIVER MESSAGE TEXT
SIGNATURE

CIPHERED ENCRYTPTION TEXT DECRYTPTION 2 3 4

MESSAGE TEXT
SIGNATURE 62

SENDER 1 PRIVATE KEY OF SENDER

PUBLIC KEY RECEIVER OF SENDER

1) SENDER CREATES A PHRASE EX:- NAME & ENCRYPTS THIS SIGNATURE USING HIS PRIVATE KEY & ATTACHES TO MESSAGE EX:- VINAY 74B73A29E1F DIGITAL SIGNATURE ALGORITHM PRIVATE KEY OF SENDER 2) COMBINED MESSAGE IS NOW ENCRYPTED WITH PUBLIC KEY OF RECEIVER 3) ON RECEIPT, THE MESSAGE IS FIRST DECRYPTED WITH RECEIVERS PRIVATE KEY 4) THE SIGNATURE PHRASE IS DECRYPTED WITH PUBLIC KEY OF SENDER IF THE PHRASE IS SUCCESSFULLY (HASH TOTAL) DECRYPTED THEN RECEIVER KNOWS THAT MESSAGE COULD BE SENT BY THE HOLDER OF SENDERS PRIVATE 63 KEY.

WHAT HAPPENS, IF SENDERS PRIVATE KEY IS STOLEN? NO GUARANTEE THAT SENDER IS REAL SENDER!! DIGITAL CERTIFICATE:- TAKES CARE OF ABOVE PROBLEM & CERTIFYING AUTHORITY ISSUES DIGITAL CERTIFICATES. DIGITAL CERTIFICATES ARE DATA FILES USED TO ESTABLISH THE IDENTITY OF PEOPLE & ON-LINE COMPUTERS FOR PROTECTION OF ON-LINE TRANSACTIONS. THIS IS ISSUED BY A TRUSTED THIRD PARTY KNOWN AS CERTIFYING AUTHORITY TO VALIDATE A USERS INDENTIY. EX:- VERISIGN INC. IS A CA SERVER, WHICH GENERATES AN ENCRYPTED DIGITAL CERTIFICATE CONTAINING OWNER IDENTIFICATION & A COPY OF OWNERS PUBLIC KEY. CERTIFICATE AUTHENTICATES THAT THE PUBLIC KEY BELONGS TO THE DESIGNATED OWNER 64

CA MAKES ITS OWN PUBLIC KEY AVAILABLE PUBLICLY EITHER IN PRINT ON ON INTERNET RECEPIENT OF AN ENCRYPTED MESSAGE USES THE CAS PUBLIC KEY TO DECODE THE DIGITAL CERTIFICATE ATTACHED TO THE MESSAGE, VERIFIES IT WAS ISSUED BY THE CA & THEN OBTAINS THE SENDERS PUBLIC KEY & IDENTIFICATION INFORMATION CONTAINED IN THE CERTIFICATE. DIGITAL CERTIFICATE SYSTEM WOULD ENABLE FOR EX:- A CREDIT CARD USER AND A MERCHANT TO VALIDATE THAT THEIR DIGITAL CERTIFICATES WERE ISSUED BY AN AUTHORISED THIRD PARTY PEFORE EXCHANGING DATA

65

CLIENT (SENDER)

1 REQUEST FOR DIGITAL CERTIFICATE (CONTAINS NAME, ADDRESS ETC & PUBLIC KEY) 3
DIGITAL CERTIFICATE SIGNATURE ALGORITHM ISSUER NAME VALIDITY DATE PUBLIC KEY ALGORITHM SIGNATURE

CA

4 DIGITAL CERTIFICATE ATTACHED TO MESSAGE

TO RECEIVER (OTHER PARTY)66

ELECTRONIC PAYMENT SYSTEMS

USE OF DIGITAL TECHNOLOGIES, SUCH AS CREDIT CARDS, SMART CARDS & INTERNET BASED PAYMENT SYSTEMS TO PAY FOR PRODUCTS & SERVICES ELECTRONICALLY. DIGITAL CREDIT CARD PAYMENT SYSTEM:SECURE SERVICES FOR CREDIT CARD PAYMENTS ON THE INTERNET THAT PROTECT INFORMATION TRANSMITTED AMONG USERS, MERCHANTS SITES & PROCESSING BANKS. DIGITAL WALLETS:SOFTWARE THAT STORES CREDIT CARD & OWNER IDENTIFICATION INFORMATION & PROVIDES THESE DATA AUTOMATICALLY DURING ELECTONIC COMMERCE PURCHASE TRANSACTIONS. MAKES PAYING FOR PURCHASE OVER WEB MORE EFFICIENT BY ELIMINATING NEED FOR SHOPPERS TO REPEATEDLY ENTER CREDIT CARD INFORMATION 67

EACH TIME TO BUY SOMETHING THE ELECTRONIC WALLET ENTERS THE SHOPPERS NAME, CREDIT CARD & OWNER INDENTIFICATION & SHIPPING ADDRESS AUTOMATICALLY WHEN INVOKED TO COMPLETE PURCASE. EX:- AMAZON.COMS 1 CLICK SHOPPING, WHICH ENABLES CUSTOMER TO FILL ALL DETAILS BY CLICKING ONE BUTTON USING ELCTRONIC WALLET TECHNOLGOY. YAHOO WALLET & AMERICA ON-LINES QUICK CHECKOUT ARE OTHER DIGITAL WALLET SYSTEMS. SMART CARDS:- (STORED VALUE PAYMENT SYSTEM) A CREDIT CARD SIZE PLASTIC CARD THAT STORES DIGITAL INFORMATION & THAT CAN BE USED FOR ELECTONIC PAYMENTS IN PLACE OF CASH. ENABLE CONSUMERS TO MAKE INSTANT ON LINE PAYMENT TO MERCHANTS BASED ON VALUE STORED IN THE CARD. EX:- MONDEX OR AMERICAN EXPRESS BLUE SMART68

CARDS CONTAIN ELECTRONIC CASH & CAN BE USED TO TRANSFER FUNDS TO MERCHANT IN PHYSICAL STORES OR MERCHANTS ON VIRTUAL STORES ON THE INTERNET USING A SMART CARD READER ATTACHED TO PC. ELECTRONIC BILLING PRESENTMENT & PAYMENT SYSTEM:SYSTEMS USED FOR PAYING ROUTINE MONTHLY BILLS THAT ALLOW USERS TO VIEW THEIR BILLS ELECTONICALLY & PAY THEM THROUGH ELECTONIC FUNDS TRANSFERS FROM BANKS OR CREDIT CARD ACCOUNTS. MICRO PAYMENT (ACCUMULATED BALANCE DIGITAL PAYMENT SYSTEM:DEVELOPED FOR PURCHASES OF SMALL AMOUNTS (<$10). EX:- DOWNLOAD MUSIC CLIP/NEWSPAPER ETC AMOUNT TOO LOW FOR CREDIT CARD PAYMENT. EX:- TRIVNET / QPASS CHARGES ACCUMULATE
69

ELECTRONIC FUND TRANSFER

E-CHEQUE / ECS (ELECTRONIC CLEARING SYSTEM) ELCTRONIC FUND TRANSFER ENABLES TRANSFER OF MONEY FROM ONE ACCOUNT TO ANOTHER ELECTONICALLY FROM ONE BANK TO ANOTHER EX:- ECS PAYMENTS / INTERNET BANKING FOR FUND TRANSFER FROM ONE A/C TO ANOTHER CUSTOMER (PAYER) MERCHANT (PAYEE)

BANK AUTOMATED CLEARING HOUSE

BANK
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ADVANTAGE OF CHARGE FREE, INSTANT TRANSFER OF FUNDS SECURELY ENCRYPTION TECHNOLOGY USED WITH DIGITAL SIGNATURE. HOME BANKING THRU PC & INTERNET. PC BANKING FOR BUSINESS TO ACCESS ACCOUNTS CONVENIENTLY & GET TIMELY INFORMATION TO CONTROL FINANCES & MANAGE CASH FLOW.

71

E-BUSINESS SYSTEMS FOR STRATGIC MANAGEMENT

A MAJOR ROLE OF INFORMATION SYSTEMS APPLICATION IN BUSINESS IS TO PROVIDE EFFECTIVE SUPPORT TO COMPANYS STRATEGY FOR GAINING COMPETITIVE ADVANTAGE STRATEGIC ROLE OF INFORMATION SYSTEM INVOLVES USING IT TO DEVELOP PRODUCTS, SERVICES & CAPABILITIES TO GIVE THE COMPANY MORE ADVANTAGE OVER COMPETITIVE FORCES. TO FACE GLOBAL MARKET CHALLENGES. THIS CREATES STRATEGIC INFORMATION SYSTEMS

72

COMPETETIVE FORCES
BARGAINING BARGAININ RIVALRY THREAT OF POWER OF G POWER OF NEW CUSTOMER OF SUPPLIER COMPETITOR ENTRANT THREAT OF SUBSTITION

BASIC COMPETITIVE STRATEGIES

COST LEADERSHIP DIFFERENTIA TION INNOVATION

GROWTH

ALLIANCE

OTHER STRATEGIES
73

A COMPNAY CAN SURVIVE & SUCCEED IN LONG RUN ONLY IF IT SUCCESSFULLY DEVELOPS STRATEGIES TO CONFRONT FIVE COMPETITIVE FORCES. FIVE BASIC COMPETITIVE STRATEGIES CAN COUNTER THE THREATS OF COMPETITIVE FORCES.

74

BASIC STRATEGIES IN THE BUSINESS USE OF INFORMATION TECHNOLOGY

LOWER COST USE OF IT SUBSTANTIALLY REDUCE THE COST OF BUSINESS PROCESS & COST OF CUSTOMERS/SUPPLIERS. DIFFERENTIATE DEVELOP NEW IT FEATURES TO DIFFERENTIATE PRODUCTS & SERVICES REDUCES THE DIFFERENTIATION ADVANTAGE OF COMPETITORS. USE IT FEATURES TO FOCUS PRODUCTS & SERVICES AT SELECTED MARKET NICHES. INNOVATE CREATE NEW PRODUCTS & SERVICES THAT INCLUDE IT COMPONENTS. DEVELOP UNIQUE NEW MARKET WITH IT HELP MEKE RADICAL CHANGES IN BUSINESS PROCESSES
75

WITH IT THAT SIGNIFICANTLY CUT COST, IMPROVE QUALITY, EFFICIENCY OR CUSTOMER SERVICE OR SHORTEN TIME TO MARKET. PROMOTE GROWTH USE IT TO MANAGE REGIONAL & GLOBAL BUSINESS EXPANSION. TO DIVERSIFY & INTEGRATE INTO OTHER PRODUCTS & SERVICES DEVELOP ALLIANCES USE IT TO CREATE VIRTUAL ORGNIZATIONS OF BUSINESS PARTINERS. DEVELOP ENTERPRISE INFORMATION SYSTEMS LINKED BY INTERNET & EXTRANETS THAT SUPPORT STRATEGIC BUSINESS RELATIONSHIP WITH CUSTOMER/SUPPLIER ETC.

76

HOW COMPANYS USE STRATEGIC INFORMATION SYSTEMS TO IMPLEMENT COMPETITIVE STRATEGY FOR STRATEGIC ADVANTAGE? STRATEGIC BUSINESS APPLICATIONS
STRATEGIC INFO.SYSTEM BUSINESS BENEFIT ( APPLICATION) LOWER PRICE GUARANTEE AUCTION SET PRICE INCREASE IN MARKET SHARE MARKET LEADERSHIP MARKET LEADERSHIP 77

STRATEGY (COMPANY)

COST LEADERSHIP ON LINE PRICE (BUY.COM) ADJUSTMENT (EBAY.COM) ON LINE AUCTION/ SELLER BIDDING DIFFEENTIATION (FREIGHT COMPANY) CUSTOMER ON-LINE SHIPMENT T RACKING

INNOVATION ON-LINE PACKAGE (FEDERAL EXPRESS) TRACKING (AMAZON.COM) ON-LINE FULL SERVICE CUSTOMER SYSTEM

GROWTH (CITI CORP) WAL-MART) ALLIANCE (WALMART/ PROCTOR & GAMBLE)

GLOBAL INTRANET MERCHANDISE ORDERING BY GLOBAL SATELLITE NETWORK VIRTUAL MANUFACTURING ALLIANCE AUTOMATIC INVENTORY REPLENISHMENT BY SUPPLIER

INCREASE IN GLOBAL MARKET MARKET LEADERSHIP AGILE MARKET LEADERSHIP REDUCED INVENTORY COST / INCREASED SALES

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OTHER COMPETITIVE STRATEGIES

LOCK-IN CUSTOMER & SUPPLIERS (& LOCK-OUT COMPETITORS) - DEVELOP INTER-ENTERPRISE INFORMATION SYSTEM WHOSE CONVENIENCE & EFFICIENCY CREATE SWITCHING COSTS THAT LOCK-IN CUSTOMERS OR SUPPLIERS MAKE MAJOR INVESTMENTS IN ADVANCED IT APPLICATIONS THAT BUILD BARRIERS TO ENTRY AGAINST INDUSTRY COMPETITORS. INCLUDE IT COMPONENTS IN PRODUCTS & SERVICES TO MAKE SUBSTITUTION OF COMPETING PRODUCTS OR SERVICES MORE DIFFICULT. LEVERAGE INVESTMENT IN INFORMATION SYSTEM PEOPLE, HARDWARE, SOFTWARE, DATA BASES & NETWORKS FROM OPERATIONAL USE INTO STRATEGIC APPLICATIONS. 79 EX:- WAL-MART SATELLITE NETWORK LINKING

POINT-OF-SALE TERMINAL IN ALL ITS STORES FOR UPTODATE SALES & INVENTORY STATUS TO MANAGEMENT TO IMPROVE PRODUCT BUYING, INVENTORIES & STORES MANAGEMENT - WAL-MART EXTENDED THEIR NETWORK TO THEIR CUSTOMERS & SUPPLIERS TO BUILD INNOVATIVE CONTINUOUS INVENTORY REPLACEMENT SYSTEM (STOCKLESS INVENTORY SYSTEM BETWEEN WAL-MART & PROCTOR & GAMBLE).

80

OTHER STRATEGIC USES OF INFORMATION TECHNOLOGY

DEVELOP ENTERPRISE INFORMATION SYSTEM WHOSE CONVENIENCE & EFFICIENCY CREATE SWITCHING COSTS THAT LOCK-IN CUSTOMERS OR SUPPLIERS MAKE MAJOR INVESTMENTS IN ADVANCED IT APPLICATIONS THAT BUILD BARRIERS TO ENTRY AGAINST COMPETITORS. INCLUDE IT COMPONENT IN PRODUCTS & SERVICES TO MAKE SUBSTITUTION OF COMPETING PRODUCTS OR SERVICES MORE DIFFICULT. BUILDING A CUSTOMER FOCUSED BUSINESS BY USING INTERNET, INTRANET & EXTRANET E-COMMERCE WEBSITES & SERVICES TO KEEP TRACK OF CUSTOMER PREFERENCE, SUPPLY PRODUCT, SERVICS & INFORMATION ANYTIME, ANYWHERE. IMPROVING BUSINESS QUALITY BY SUPPORTING 81 PROGRAMS OF CONTINUAL IMPROVEMENT IN

MEETING/EXCEEDING CUSTOMER REQUIREMENT & EXPECTATION ABOUT QUALITY OF PRODUCT/SERVICES. RE-ENGINEERING BUSINESS PROCESS - PLAYS A MAJOR ROLE IN SUPPORTING INNOVATIVE CHANGES IN THE DESIGN OF WORKFLOWS, JOB REQUIREMENTS, & ORGANIZATIONAL STRUCTURE IN A COMPANY.

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IV E-BUSINESS APPLICATIONS & STRATEGY EMERGING TRENDS IN E-BUSINESS - ENTERPRISE E-BUSINESS SYSTEMS A. CRM (CUSTOMER RELATIONSHIP MANAGEMENT)- THE BUSINESS FOCUS. B. SCM (SUPPLY CHAIN MANAGEMENT)- THE BUSINESS NETWORK C. ERP (ENTERPRISE RESOURCE PLANNING)- THE BUSINESS BACKBONE. CRM THE BUSINESS FOCUS; - TODAY CUSTOMERS ARE IN COMMAND. IT IS EASIER FOR CUSTOMERS TO DO PRICE/DELIVERY COMPARISON, WITH CLICK OF COMPUTER MOUSE!!, TO SWITH COMPANIES. - THUS MANY COMPANIES ARE IMPLEMENTING CRM BUSINESS INITIATIVE AS PART OF CUSTOMER FOCUSED BUSINESS INITIATIVE TO IMPROVE SUCCESS IN 83 COMPETITIVE BUSINESS ENVIRONMENT.

EX:- MITSUBISHI MOTOR CASE STUDY CRM SOFTWARES INCLUDE MODULES WITH TOOLS THAT PROVIDE FAST, CONVENIENT, DEPENDABLE, CONSISTENT SERVICE TO ITS CUSTOMERS. EX:- ORACLE, SAP, PEOPLE SOFT, SIEBEL ETC ARE SOME OF THE LEADING VENDORS OF CRM SOFTWARES.

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MAJOR APPLICATIONS IN CRM

MARKETING 3 FAX WEB 4 CUSTOMER SERVICE/SUPPORT

2 SALES

CUSTOMER OR PROSPECT TELEPHONE E-MAIL 1 CONTACT & ACCOUNT MANAGEMENT

5 RETENTAION & LOYALITY PROGRAMME

85

1) CRM SOFTWARE HELPS SALES, MKTG. & SERVICE DEPTT. CAPUTRE & TRACK RELEVENT DATA ABOUT EVERY PAST & PLANNED CONTACT WITH PROSPECT & COSTOMERS. INFORMATION IS CAPTURED AT EVERY TOUCH POINT TEL. / FAX / WEB / E-MAIL. CRM SYSTEMS STORE THE DATA IN A COMMON CUSTOMER DATA BASE & INTEGRATES ALL CUSTOMER ACCOUNT INFORMATION TO BE AVAILABLE THROUGHT THE COMPANY VIA INTERNET / INTRANET 2) SALES:- A CRM SYSTEM PROVIDES SALES REP. WITH S/W TOOLS & COMPANY DATA THEY NEED TO MANAGE SALES ACTIVITY EX:- SALES PROSPECT / PRODUCT INFORMATION PRODUCT CONFIGURATION / SALES QUOTE GENERATION ETC. CRM ENABLES A SINGLE COMMON VIEW OF CUSTOMERS ACCOUNT HISTORY BEFORE MAKING A 86

3) MARKETING:- CRM SYSTEMS HELP MARKETING WITH AUTOMATED DIRECT TARGET MARKETING. ASSISTS IN THE FULFILLMENT OF PROSPECT & CUSTOMER RESPONSES. 4) CUSTOMER SERVICE & SUPPORT:- A CRM SYSTEM PROVIDES SERVICE REPS WITH S/W TOOLS & ACCESS TO COMMON CUSTOMER DATA BASE TO MANAGE REQUEST FOR SERVICE OR REMINDER FOR SERVICE - HELP DESK S/W ASSISTS CUSTOMER SOLVING PROBLEMS. 5) RETENTION & LOYALTY PROGRAM: IT COSTS SIX TIMES MORE TO SELL TO A NEW CUSTOMER THAN TO EXISTING ONE DISSATISFIED CUSTOMER WILL TELL OTHERS ABOUT HIS EXPERIENCE. A COMPANY CAN BOOST ITS PROFIT BY 85% BY INCREASING ITS ANNUAL CUSTOMER RETENTION BY 87 ONLY 5%

70% OF COMPLAINING CUSTOMER WILL DO BUSINESS WITH COMPANY AGAIN IF IT QUICKLY TAKES CARE OF THE PROBLEM - THATS WHY OPTIMIZING CUSTOMER RETENTION & LOYALTY IS A MAJOR BUSINESS STRATEGY CRM SYSTEMS TRY TO HELP A COMPANY IDENTIFY, REWARD & MARKET THEIR MOST LOYAL & PROFITABLE CUSTOMERS

88

HOW CRM SUPPORTS THE THREE PHASES OF RELATIONSHIP BETWEEN A BUSINESS & ITS CUSTOMERS THRU E-BUSINESS MODEL CRM S/W TOOLS ACQUIRE WEB ENABLED CRM MGMT. ENHANCE CRM ANALYTICAL S/W RETAIN

CUSTOMER LIFE CYCLE DIRECT MARKETING SALES FORCE AUTOMATION REPEAT SALES PROACTIVE SERVICE

CRM FUNCTIONAL SOLUTION

CUSTOMER SUPPORT
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THE INTERNET

CRM INTEGRATED SOLUTION

SHARED CUSTOMER DATA

COLLABORATIVE SERVICES

PARTNER

COMPANY

CUSTOMER

90

INTEGRATING INFORMATION SYSEMS & BUSINESS STRATEGY BUILDING A CUSTOMER FOCUSED BUSINESS:INTERNET TECHNOLOGIES CAN MAKE CUSTOMERS THE FOCAL POINT OF ALL E-BUSINESS & E-COMMERCE APPLICATIONS CUSTOMER FOCUSED COMPANYS USE INTERNET, INTRANET & EXTRANET E-COMMERCE WEBSITES & SERVICES TO:KEEP TRACK OF THEIR CUSTOMER PREFERENCES, SUPPLY PRODUCTS, SERVICES & INFORMATION ANYTIME, ANYWHERE & PROVIDE SERVICES TAILORED TO INDIVIDUAL RE-ENGINEERING BUSINESS PROCESSES:BY ENABLING RADICAL CHANGES TO PROCESS THAT SIGNIFICANTLY IMPROVE THEIR EFFICIENCY & EFFECTIVENESS TO SERVE CUSTOMERS IMPROVING BUSINESS QUALITY:- INFORMATION TECHNOLOGY CAN BE USED TO 91

STRATEGICALLY IMPROVE THE QUALITY OF BUSINESS PERFORMANCE - TOTAL QUALITY MANAGEMENT OF PRODUCTS, SERVICES & CUSTOMERS RESPONSIVENESS. BECOMING AN AGILE COMPANY:- IT HELPS COMPANY TO PROSPER IN RAPIDLY CHANGING MARKETS WITH HIGH QUALITY, HIGH PERFORMANCE, CUSTOMER-CONFIGURED PRODUCTS & SERVICES. CREATNG A VIRTUAL COMPANY:A VIRTUAL COMPANY IS AN ORGANIZATION THAT USES IT TO LINK PEOPLE, ASSESTS & IDEAS FORMING VIRTUAL COMPANY THROUGH STRATEGIC ALLIANCE ENABLES CAPTURING MARKET & PROVIDE QUALITY & DIRECT SERVICE / RESPONSE TO CUSTOMERS. EX:- HOW TO CREATE PROFITABLE BUSINESS STRATEGY WITH INFORMATION SYSTEM. HOW A CUSTOMER FOCUSED BUSINESS BUILDS 92 CUSTOMER VALUE & LOYALTY IN E-COMMERCE

CUSTOMER PLACE ER DIRECTLY INTERNET WEB SITE

LET CUSTOMER PLACE ORDER THRU DISTRIBUTOR INTERNET & EXTRANET TRANSACTION DATA BASE LINK INTRANET EMPLOYEES & EXTRANET & DISTRIBUTOR TO DATA BASES & CUSTOMRS INTERNET

LD A CUSTOMER A BASE SEGMENTED REFERENCE CUSTOMER DATA BASE

E ALL EMPLOYEES MPLETE VIEW ACH CUSTOMER MAKE LOYAL CUSTOMERS FEELS SPECIAL

INTRANET

INTERNET

LET CUSTOMERS CHECK INTERORDER& DELIVERY STATUS NET

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BUILD A WEB COMMUNITY OF CUSTOMERS, EMPLOYEES & PARTNERS

STRATEGIC FOCUS ON CUSTOMER LOYALTY, ANTICIPATE THEIR FUTURE NEED, RESPOND TO CONCERNS & PROVIDE TOP QUALITY SERVICE WITH INFORMATION SYSTEMS E-COMMERCE HAS BECOME A STRATEGIC OPPORTUNITY FOR COMPANYS TO OFFER FAST RESPONSIVE, HIGH QUALITY PRODUCTS & SERVICES TAILORED TO CUSTOMER NEED.

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SUPPLY CHAIN MANAGEMENT THE E-BUSINESS NETWORK

STARTING AN E-BUSINESS TAKES IDEAS CAPITAL & TECHNICAL SURVEY. OPERATING ONE, HOWEVER, TAKES SUPPLY CHAIN MANAGEMENT SKILLS. A SUCCESSFUL SCM STRATEGY IS BASED ON ACCURATE ORDER PROCESSING, JUST-IN-TIME INVENTORY MANAGEMENT & TIMELY ORDER PROCESSING FULFILLMENT. SCMS INCREASING IMPORTANCE ILLUSTRATES HOW A TOOL THAT WAS THEORETICAL 10 YEARS AGO, IS NOW A HOT COMPETITIVE WEAPON. SCM IS A CROSS FUNCTIONAL, INTER ENTERPRISE SYSTEM THAT USES IT TO HELP SUPPORT & MANGE THE LINKS BETWEEN COMPANYS KEY BUSINESS PROCESS & THOSE OF ITS SUPPLIERS, CUSTOMERS & BUSINESS 95 PARTNERS.

 THE GOAL OF SCM IS TO CREATE A FAST, EFFICIENT & LOW COST NETWORK OF BUSINESS RELATIONSHIP OR SUPPLY CHAIN TO GET A PRODUCT FROM CONCEPT TO MARKET. COMPANIES TODAY ARE USING INTERNET TECHNOLOGIES TO CREATE INTER-ENTERPRISE EBUSINESS SYSTEMS FOR SUPPLY CHAIN MANAGEMENT & STREAMLINING TRADITIONAL SUPPLY CHAIN PROCESSES. SCM IS DIVIDED INTO:(1) SUPPLY PLANNING SYSTEM EX:- DEMAND/SUPPLY FORECASTING. (2) SUPPLY EXECUTION APPLICATION EX:- INVENTORY MGMT./LOGISTICS MGMT./ WARE HOUSE MGMT. EDI:- EARLIEST USE OF INFORMATION TECHNOLOGY FOR SUPPLY CHAIN MANAGEMENT.
96

 SCM S/W & INTERNET TECHNOLOGY CAN HELP COMPANIES RE ENGINEER & INTEGRATE THE FUNCTIONAL SCM PROCESSES THAT SUPPORT SCM LIFE CYCLE.

SUPPLY CHAIN LIFECYCLE:COMMIT SCHEDULE

MAKE

DELIVER

SCM FUNCTIONAL:- SOURCING FORECAST/DEMAND PLANNING PROCESS /PROCURE CUSTOMER ORDER DISTRIBUTION NETWORK & WARE HOUSE OPERATION PRODUCTION TRANSPORTATION & LOGISTICS SHIPMENT MGMT.
97

THE INTERNET SCM INTEGRATED:SOLUTION

SHARED MARKET DATA

COLLABORATIVE FULFILLMENT

SUPPLIER MANUFACTURER

RETAILER

CUSTOMER

98

E-BUSINESS STRATEGY - EXAMPLES

SUPPLY CHAIN INNOVATOR:- USE THE INTERNET TO STREAMLINE INTERACTIONS AMONG ALL PARTIES IN THE SUPPLY CHAIN TO IMPROVE OPERATING EFFICIENCY EX:- WALMART CUSTOMER RELATIONSHIP MANAGEMENT - STRATEGIC APPLICATION TO PROVIDE UNIQUE SERVICE / DEVELOP LOYALTY / RETAIN CUSTOMER EX:- HILTON HOTELS / MITSHUBISHI MOTOR SALES. MARKET CREATOR:- USE INTERNET TO DEFINE A NEW MARKET BY INDENTIFYING A UNIQUE CUSTOMER NEED. - THIS MODEL REQUIRES YOU TO BE AMONG THE FIRST IN THE MARKET & TO REMAIN AHEAD OF COMPETITION BY CONTINUOUSLY INNOVATING EX:- AMAZON.COM 99 CHANNEL RECONFIGURATION:-

- USE THE INTERNET AS A NEW CHANNEL TO DIRECLTY ACCESS CUSTOMERS, MAKE SALES & FULFILL ORDERS. - THIS MODEL SUPPLEMENTS, RATHER THAN REPLACES, PHYSICAL DISTRIBUTION & MARKETING CHANNELS. EX:- CISCO & DELL

100

ENTERPRISE RESOURCE PLANNING (ERP) - THE BUSINESS BACKBONE

WHAT DO COCACOLA, MICROSOFT, ELI LILY, NOKIA, CISCO HAVE IN COMMON? - UNLIKE MOST BUSINESS, WHICH OPERATE ON 25 YEAR OLD OFFICE SYSTEMS, THESE MARKET LEADERS REENGINEERED THEIR BUSINESSES TO RUN AT BREAKNECK SPEED BY IMPLEMENTING A TRANSACTIONAL BACK BONE CALLED ERP. ERP IS THE TECHNOLOGICAL BACKBONE OF EBUSINESS, AN ENTERPRISE-WIDE TRANSACTION FRAME WORK WITH LINKS INTO SALES ORDER PROCESSING, INVENTORY MANAGEMENT, PRODUCTION CONTROL & DISTRIBUTION PLANNING, FINANCE, HR & MARKETING. ERP IS A CROSS FUNCTIONAL SYSTEM THAT INTEGRATES & AUTOMATES MANAY OF THE INTERNAL BUSINESS PROCESSES OF THE COMPANY LIKE MANUFACTURING, LOGISTICS, DISTRIBUTION, 101 ACCOUNTING, FINANCE, HR, MARKETING ETC.

ERP HELPS THE BUSINESS ENTERPRISE ACHIEVE EFFICIENCY, AGILITY & RESPONSIVENESS REQUIRED TO SUCCEED IN DYNAMIC BUSINESS ENVIRONMENT. EX:- ERP SOFTWARE FOR A MANUFACTURING COMPANY WILL PROCESS THE DATA FROM & TRACK THE STATUS OF SALES, INVENTORY, SHIPPING & INVOICING. ALSO FORECAST RAW MATERIAL, HUMAN RESOURCE REQUIREMENT, FINANCE, CAPACITY PLANNING ETC. ERP PROVIDES THE BUSINESS:A COMMON, INTEGRATED, REALTIME VIEW OF ITS CORE BUSINESS PROCESSES (i.e PRODUCTION, ORDER PROCESSING, INVENTORY MANAGEMENT TIED TOGETHER BY A ERP APPLICATION S/W A COMMON DATA BASE MANAGEMENT SYSTEM. ERP TRACKS BUSINESS RESOURCES (CASH, RAW MATERIAL, PRODUCTION CAPACITY ETC) ERP TRACKS THE STATUS OF COMMITMENTS MADE BY
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THE BUSINESS (i.e CUSTOMER ORDER, PURCHASE ORDER, EMPLOYEE PAYROLL ETC.) NO MATTER WHICH DEPTT. (i.e MANUFACTURING, PURCHASE, SALES, ACCOUNTING ETC.) ENTERED THE DATA IN THE SYSTEM ERP S/W PACKAGES CONSIST OF INTEGRATED MODULES OF MANUFACTURING, DISTRIBUTION, SALES, ACCOUNTING HR ETC. EX:- OF MANUFACTURING PROCESS SUPPORTED BY ERP ARE:- MATERIAL REQUIREMENT PLANNING - PRODUCTION PLANNING - CAPACITY PLANNING. EX:- OF SALES / MKTG PROCESS SUPPORTED BY ERP ARE:- SALES PLANNING / ANALYSIS - PRICING ANALYSIS EX:- OF DISTRIBUTION PROCESS SUPPORTED BY ERP ARE:103

 1) 2) 3) 4)

- ORDER MANAGEMENT - PURCHASING - LOGISTICS PLANNING EX:- OF HR MANAGEMENT PROCESS SUPPORTED - PERSONNEL PLANNING - SALARY & BENEFITS ADMINISTRATION FINANCIAL RECORD KEEPING - MANAGERIAL ACCOUNTING APPLICATIONS BENEFITS OF ERP (REFER COLGATE PALMOLIVE CASE) QUALITY & EFFICIENCY DECREASED COSTS DECISION SUPPORT ENTERPRISE AGILITY.

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MOBILE COMMERCE: (M-COMMERCE)

THE USE OF HAND HELD WIRELESS DEVICES FOR PURCHASING GOODS & SERVICES HAS BEEN TERMED MOBILE COMMERCE (OR M-COMMERCE) DEVICES SUCH AS CELL PHONE OR HAND HELD DIGITAL DEVICES ARE USED TO CONDUCT BOTH B2B & B2C ECOMMERCE TRANSACTION THRU NET. NOW SUCH WIRELESS DEVICES ARE INTERNET ENABLED (CAN BE USED TO SEND E-MAILS / PURCHASE PLANE TICKETS / TRADE STOCKS / BROWSE THRU HOTEL GUIDES. WEB PAGES HAVE BEEN SPECIALLY FORMATTED FOR SMALL SCREN M-COMMERCE SERVICES / APPLICATION TYPE OF M-COMMERCE APPLICATION INFORMATION BASED SERVICE INSTANT MESSAGE / E-MAIL SEARCH FOR RESTAURANT / 105 MOVIE THRU PDA / CELL PHONE

TRANSACTION BASED SERVICE

PURCHASE STOCK / TICKETS / MUSIC / GAMES / SEARCH FOR BEST PRICE /DOWNLOAD MUSIC ON CELL PHONE SERVICES THAT ANTICIPATE WHAT YOU WANT BASED ON YOUR LOCATION OR DATA PROFILE. EX:UPDATE FLT. INFO./BEAMING COUPONS FOR NEARBY RESTAURANTS.

PERSONALISED SERVICES

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BUSINESS PROCESS RE-ENGINEERING (BPR)

REENGINEERING IS DEFINED AS THE FUNDAMENTAL RETHINKING & RADICAL REDESIGN OF BUSINESS PROCESS TO ACHIEVE DRAMATIC IMPROVEMENT IN THE CRITICAL CONTEMPORARY MEASURES OF PERFORMANCE SUCH AS COST, QUALITY, SERVICE & SPEED. THE APPROACH TO RE-ENGINEERING AIMS AT CUSTOMER FOCUS. IT REQUIRES DIFFERENT VIEW OF BUSINESS BASED ON PROCESS & NOT ON TASKS OR FUNCTIONS FOCUS IS ON IMPROVING PROCESS TO PROVIDE VALUE ADDED SERVICE TO CUSTOMER IT REQUIRES ORGANIZATION RESTRUCTURING & REDESIGNING BASED ON PROCESS AIMED AT ENHANCING THE VALUE DESIRED BY CUSTOMER RE-ENGINEERING 1ST STEP:107 1) FUNDAMENTAL RE-THINKING

2) 2ND STEP:- RADICAL REDESIGN 1. REQUIRES QUESTIONING EVERYTHING THAT WAS FOLLOWED, PRACTICED & FOUND TO BE ACCEPTABLE FOR CENTURIES. - QUESTIONING BASIC PRINCIPLES OF MANAGEMENT & ADMINISTRATION - IT REQUIRES VISION, INNOVATION & IMAGINATION 2. REQUIRES OFF LOADING THE ACTIVITY OUTSIDE THE BUSINESS ORGANIZATION, IF IT CONTRIBUTES TO THE COST & NOT CUSTOMER DESIRED VALUE. EX:- A MANUFACTURING BUSINESS MAY BE CONDUCTED IN A CERTAIN MANNAER i.e. BUY RAW MATERIAL, PROCESS IT, PACK THE FINISHED GOODS, SELL & DISTRIBUTE TO CUSTOMER. THERE ARE STANDARD PROCEDURE AND DESIGNS FOR THESE ACTIVITIES. RADICAL REDESIGN CALLS FOR TRIMMING & CHOPPING THESE DESIGNS SO THAT COST IS REDUCED, SERVICE IS IMPROVED & CUSTOMER GETS HIGHER VALUE AT 108 HIGHER SPEED.

BUSINESS PROCESS
THE BUSINESS IS RE-ENGINEERED THROUGH PROCESS REENGINEERING & BUSINESS HAS A NUMBER OF PROCESSES WHICH TOGETHER PRODUCE THE BUSINESS RESULT. BASIC ELEMENTS OF BUSINESS PROCESS MOTIVATION TO PERFORM CERTAIN ACTIVITIES DATA GATHERRING, PROCESSING STORING INFORMATION PROCESSING CHECKING, VALIDATION & CONTROL DECISION MAKING COMMUNICATION A BUSINESS PROCESS IN ANY AREA OF THE BUSINESS ORGANIZATION PERFORMS THROUGH BASIC STEPS SUCH AS:- RECEIVE INPUT, MEASURE, ANALYSE, DOCUMENT, PERFORM, PROCESS, RECORD / STORE, ACCESS, PRODUCE & COMMUNICATE. 109 THESE PROCESSES ARE PERORMED A NUMBER OF TIMES

& CONSUMES RESOURCES & TIME THE REENGINEERING APPROACH ATTEMPTS TO ELIMINATE OR SHORTEN THE STEPS SO THAT RESOURCE CONSUMPTION IS REDUCED & TIME OF PROCESS EXECUTION IS SHORTENED IT ELIMINATES REDUNDANCY BY ELIMINATING THE STEPS WHICH DO NOT CONTRIBUTE TO THE VALUE CUSTOMER IS LOOKING FOR VALUE STREAM PROCESSES:- ALL THE PROCESSES, WHICH GENERATE & ADD VALUE TO THE CUSTOMER ARE CALLED VALUE STREAM PORCESS.

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