Amity Institute of Education and Training

Amity Institute of Education and Training

Management Information System
Dr. Loveleen Gaur

E-commerce Transactions In Several Steps

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The consumer places an order and transmits the payment card account number to the merchant. The merchant stores the order and the account holder information in a database for future reference.

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E-commerce Transactions In Several Amity Institute of Education and Training Steps

The merchant transmits the amount of the purchase and the account holder information to a financial institution in order to obtain an authorization, indicating the reservation of funds that allows settling the transaction later.
Finally, after the delivery of goods to the consumer, the merchant asks the financial institution to settle the transaction and credit the merchant account.

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The Hackers Ways

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The hacker can impersonate the merchant or make a bogus Web site. The consumer does not notice this and sends the order and credit information directly to the hacker. Another scenario exists where the hacker installs a key-logger on the device of the consumer, logging all information typed on the keyboard, including account holder information including the payment card number.
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The Hackers Ways

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The hacker observes the communication between the cardholder and the merchant. Transmitting credit card information on the network without encryption, allows the hacker to read this information. The hacker can penetrate the merchants ccommerce environment and steal information in the database.

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Protecting Internet Amity Communication Institute of Education and Training

Encryption: Process of transforming plain text or data into cipher text that can not be read by anyone outside of sender and the receiver. Purpose of encryption:
To secure stored information To secure information transmission.

Can provide Message Integrity, Nonrepudiation, Authentication Confidentiality

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Encryption

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The technique of modifying a known bit stream so that it appears to be random to an unauthorized observer. It often is done automatically before data is transmitted.

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Cipher Text

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Text that has been encrypted and thus can not be read by any one besides the sender and the receiver. Key (Cipher): Any method for transforming plain text into cipher text. Substitution Cipher: Every occurrence of a given letter is replaced systematically by another letter. Say letter plus 2 Substitution will make HELLO as JGNNQ
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Transposition Cipher

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Ordering of letters in each word is changed in some systematic way. The word HELLO can be written as OLLEH or a more complicated cipher would be:
Break all words into two words Spell the first word with every other letter beginning with the first letter, then spell the second word with all the remaining letter, HLO EL
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Characteristics of Digital Payment

Acceptability: Robust, available and accessible to a vide range of consumers, and sellers of good and services Convertibility: The electronic currency should be interoperable and interchangeable with other form of electronic cash, paper, currency and deposits in bank account.
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Characteristics of Amity Digital Institute Payment of Education and Training

Flexibility: Payment system should be in a position to accept several form of payment rather than limiting the user a single form of currency Reliability: Payment system should ensure and infuse confidence in users The users should be completely shielded from systematic or one point failure
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Characteristics of Digital Payment

Efficiency: Cost of overhead involved in operation of digital payments. The cost per transaction should be close to zero. Security: Digital currency should be stored in a form that is resistant to double spending, replication and tampering. It should offer protection from intruders trying to tap it and put it to unauthorized use when transmitting over internet.
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Characteristics of Digital Payment

Usability: The user of the payment mechanism should be able to use it as easily as real currency. It should be well integrated with the existing applications and processes. Scalability: Should offer scalable solutions. Should range from micro payments to business payments.
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Transaction Characteristics
Atomicity: Transaction should occur completely or it should not occur at all Transfer of Funds: There should not be any currency loss. Full transfer by debiting the payer and crediting the payee. Complete Transfer: A complete exchange of currency with corresponding digital goods should take place.

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Transaction Characteristics

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Consistency: All parties concerned must agree on relevant facts i.e. amount and reason of transfer, transaction. Isolation: Transactions must be independent of each other. Durability: In case of system failure, it should recover to a state where transaction and status information is consistant.
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EPS
Electronic Payment System EPS is being used nowadays in banking, retail, healthcare, online markets, and even in government transaction. In the beginning, EPS was known as electronic funds transfer (EFT). The EPS is defined as: Any transfer of funds initiated through a telephone instrument, electronic terminal, or magnetic tape or computer, so as to authorize, order, or instruct a financial institution to credit or debit an account.
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Types of EPS
There are three main categories of EPS: 1. Banking and financial payments Large-scale or whole payment (e.g., bank-to-bank transactions) Small-scale or retail payment (e.g., ATM) Home banking (e.g., bill payment) 2. Retail payments Credit cards (VISA or Master cards) Private label credit/debit cards (e.g., JC Penny cards) Charges cards (e.g., American Express)

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3. Online e-business payments This category is again divided into two types: Electronic token-based payment system Electronic cash (e.g., DigiCash) Electronic cheques (e.g., NetCheque) Smart cards or debit cards (e.g., Mondex ecurrency cards

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Credit cards Associations

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VISA and MasterCard are non profit associations Set standards for issuing banks- that actually issue the cards and process transactions Third Parties, processing centres and clearinghouse, usually handle verification of accounts and balances Offers considerable float

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Blocking payments WikiLeaks Amityto Institute of Education and Training

In December 2010, MasterCard blocked all payments to WikiLeaks due to claims that they engage in illegal activity.[14] In a response a group of online activists calling themselves "Anonymous" organised a denial-of-service attack, as a result the MasterCard website experienced downtime on December 89, 2010.[15] On December 9, 2010 the servers of MasterCard underwent a massive attack[16] as part of a Operation Avenge Assange for closing down payments of whistleblowing platform WikiLeaks. According to several news sites, security of thousands of credit cards was compromised during that attack due to a phishing-site set up by the attackers.[17] However, MasterCard denied this, stating that "cardholder account data has not been placed at risk".[18]WikiLeaks spokesman said: We neither condemn nor applaud these attacks."[19] U.N. High Commissioner for Human Rights, Navi Pillay said that closing down credit lines for donations to WikiLeaks "could be interpreted as an attempt to censor the publication of information, thus potentially violating WikiLeaks' right to freedom of expression".[20]

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The company that enables WikiLeaks to accept credit and debit card donations said it would take legal action against Visa Europe and MasterCard.[21] Iceland-based IT firm DataCell said it would move immediately to try to force the two companies to resume allowing payments to the website.[citation needed] DataCell had earlier[when?] said that suspension of payments towards WikiLeaks is a violation of the agreements with their customers. On 14 July 2011 DataCell announced they had filed a complaint with the European Commission claiming the closure by Visa and MasterCard of Datcells access to the payment card networks violated the competition rules of the European Community.[22] Visa Europe and MasterCard have yet[when?] to comment on the legal threat. On 12 July 2012 a Reykjavik court ruled that Valitor, Visa and Mastercard's partner in Iceland, had to start processing donations to Wikileaks within 14 days.[23] In view of MasterCard's stand on WikiLeaks crisis, MasterCard has been mocked widely across the internet as users lampooned its distinctive advertising slogans: "Freedom of speech: priceless. For everything else, there's MasterCard".

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Debit Cards

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Immediately debit a checking or demanddeposit account. Eliminates writing of a cheque. Dependant on funds being available in the consumers bank account Do not provide any float

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Consumer's Preference ofofPayment Amity Institute Education and Training System

Low risk Low cost Refutable (able to be denied) Convenient Reliable payment mechanism Will not use new mechanism unless they are more beneficial than the existing system

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Merchant

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Low risk Low cost Irrefutable Secure Reliable payment mechanism Cash, debit cards, Demand drafts

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Current Online Payment Amity Institute Systems of Education and Training

Clearing house Merchant software contacts clearinghouse SSL provide secure connection CH verifies account and balance from issuing bank Issuing bank credits merchant account
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Merchant

Merchant Bank

Consumer Purchases

Card Issuing Bank Monthly statement

SET Protocol

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An open standard for E-Commerce industry developed and offered by VISA and MasterCard as a way to facilitate and encouraged improved security for credit card transactions SET uses a digital certificate that verify a senders identity Credit card companies issue digital certificates to their card holders which is stored in digital wallets for use during online transactions

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Amity Institute ofWork Education and Training How SET Transactions

Merchant

Clearing house Merchant software forwards encrypted messages

Merchant and consumer computers verify each other identity

Merchant Bank
CH verifies account and balance from issuing bank Issuing bank credits merchant account
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Consumer make purchases select payment with SET

Card Issuing Bank Monthly statement

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Customer Relationship Management

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Highlights
Evolution of CRM What is CRM CRM Phases Integrated Architecture How does Data Mining help CRM Leading CRM Vendors Limits Conclusion

Evolution Amity Institute of Education and Training

Initially, there were Door-to-Door sales forces to approach the customers. Then, Mass marketing replaced the intimacy of a direct sales force. Later, Targeted marketing evolved. Use of direct mail and telemarketing. Latest is Customer Relationship Management (CRM), the next step in Evolution. A concept supported by latest technologies.

What is CRM ? Amity Institute of Education and Training

Layman Definition of CRM
The process includes collecting customer data, analyzing this data to make decisions which helps to make new customers and satisfy the existing ones. A Customer-centric business strategy which Focuses on Managing and optimizing entire customer life cycle. Demand re-engineering of work processes with customer in focus. It consists of 3 phases
Planning Phase Assessment Phase Execution Phase

PlanningAmity Phase Institute of Education and Training

Plan to approach the customers Plan for making new campaigns This phase includes
Marketing tools Various Softwares

Marketing & Sales personnel are involved in this phase

Assessment AmityPhase Institute of Education and Training

Select customer base for analysis Analyze customer requirements This phase includes technologies like
Data warehousing Data Mining Online analytical processing (OLAP)

A certified personnel sets up the CRM package while a business analyst analyzes the data

Amity Institute of Education and Training Execution Phase

Customer interaction Executes campaigns Track customer feedback This phase uses
Internet Call centers Direct mails etc.

Technology behind Amity Assessment Institute of Education and Training Phase

Data Mining Data Warehouse Warehouse containing Customer data. Integrates with Data Warehouse & OLAP to implement intelligent algorithms to discover patterns.

OLAP Server

Multidimensional Structures to facilitate better and fast analysis of data.

User analyzes these patterns to take decisions suitable for his business.

DATA WAREHOUSING
A data warehouse is a copy of transactional data. Data is specifically structured for querying and reporting A data warehouse can be a relational, multidimensional hierarchical database or a flat file.

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DISTINGUISHABLE FEATURES
Contains historical data No frequent updates Data stored is subject oriented

TERMINOLOGY
Data Mart- Contains data about a specific subject. Metadata- Describes the data stored in data warehouse. Data Cleansing- The process of ensuring that all values in a dataset are consistent and correctly recorded ETL- Extraction, Transformation and Loading of Data.

A Typical DataAmity Warehouse Institute of Education and Training

Data Warehouse

Summarized Data
Meta Data

Detailed Data
Data Mart
customer

Data about data. Facilitates in firing queries on detailed data. Data marts contain data specific to a subject.

Data Mart
campaign

Data Mart
sales

OLAP

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Online analytical processing is the name given to database and user interface tools that allow to quickly navigate within data. Provides a mechanism to store the data in multidimensional cubes.

DISTINGUISHABLE FEATURES
Multidimensional Cubes- To store data which are multidimensional in nature.

Calculation Intensive- Allows complex calculations on database.

Data Model Amity Of Institute OLAP of Education and Training

The central table in an OLAP star data model is called the fact table . The surrounding tables are called the dimensions The values of fact table are known as measures.

Data ModelAmity OfInstitute OLAP of Education and Training

The supervisor that gave the most discounts. The quantity shipped on a particular date, month, year or quarter. In which zip code did product A sell the most?
To obtain answers to the above shown queries from a data model, OLAP cubes are created. OLAP cubes are not strictly cuboids-it is a name given to the process of linking data from different dimensions.

Interaction b/n Warehouse & OLAP Amity Institute of Education and Training

Extract Data from Warehouse

Transform and Standardize Data

Import to OLAP Database

Build Cubes

Produce Reports

Process of transforming warehouse data

Types of CRM

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Operational - is related to typical business functions involving customer services, order management, invoice/billing, and sales/marketing automation and management. Analytical- involves activities that capture, store, extract, process, interpret, and report customer data to a user, who then analyzes them as needed. Collaborative - deals with all the necessary communication, coordination, and collaboration between vendors and customers.

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How does Data Mining help CRM Amity Institute of Education and Training
CRM systems typically collect a great deal of data Data Mining is used to search through this information Identify patterns that can help to predict buyer behavior Target specific customers with specific offers
This area of CRM is referred to as Analytical CRM

With CRM, a business can

Provide better customer service Make call centers more efficient Increase customer revenues Help sales staff close deals faster Simplify marketing and sales processes Discover new customers

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Leading CRM Vendors Amity Institute of Education and Training

Siebel mySAP Oracle PeopleSoft Vantive Clarify

Screenshots Amity of Institute mySAP of Education and Training

It supports: Marketing Sales Service Analytics

ScreenshotsAmity of Institute mySAP of Education and Training

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Screenshots (continued) Amity Institute of Education and Training

Limits Amity Institute of Education and Training

Expensive Hard to implement Time consuming It requires a lot of management and money

Conclusion
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CRM is a concept, implemented with the support of various technologies. Supporting technologies include Data warehousing, Data Mining, OLAP etc. A proper Data warehouse should be in place for any CRM initiative. Customer needs should be in focus while implementing CRM.

Objective
What is ERP? Why ERP? ERP Vendors SAP ERP Trends

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The problem

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Large organization which was computerized early created data system to solve related groups of problems Shipping Payroll Systems did not talk to each other Legacy systems costly to maintain

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The FIX
Fold all existing computer systems into one really big system -> ERP Has roots in MRP & MRP II (material requirements planning) ERP is Enterprise wide information system with ONE data repository Provides consistency and visibility across entire enterprise Can lead to MASSIVE productivity gains

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ERP
A collection of software systems that help to manage business processes for an entire organization
Designed to integrate all information processing support for an entire organization

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ERP Combines various department systems into a single, integrated software program that runs off a single database so that the various departments can more easily share information and communicate with each other.

The best part of ERP is the way in which it improves the order fulfillment process that is taking the customer order and process it into an invoice and revenue. It doesnt handle the front-end that is handled by CRM (Customer Relationship Management).

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When a customer service representative enters a customer order into an ERP system, he has all the information necessary to complete the order such as customers credit rating and order history from the finance module, the companys inventory levels from the warehouse module and the shipping docks trucking schedule from the logistics module. How its being done: It integrates the financial information and customer order information . It does so by integrating the following: Database Application Interfaces Tools

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It standardizes and speeds up the manufacturing process. This saves time, increases productivity and reduces head count.

It reduces the inventory. Due to the information available about all the orders it helps to maintain the right level of stock and smoothes the manufacturing process.

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Organization
A group of people engaged in purposeful activity over extended time
A tool used to coordinate in order to obtain Value for organizational goals

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How an Organization Creates Value

INPUTS PROCESS

ENVIRONMENT

OUTPUTS

Business Process

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Work activities across time and place, with a beginning, an end, and clearly identified inputs and outputs (Davenport, 1993)

Has sequence, purpose, interaction

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Questions: How does an ERP system change the way people work? Why do you think its important for top business managers to have a sound understanding of ERP systems? What are some of the issues associated with implementing an ERP system?

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Why Study ERP

It affects most major business enterprises and many small and medium businesses 60% + of very large corporations use SAP (an ERP vendor) Increasingly, smaller organizations are adopting Its out there, and its very likely you will work with one in some capacity It changes behavior of competitors and partners Competitors: adopt to survive? Partners/Suppliers: adopt to keep business

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Why Study ERP

It enforces best practices and aids reengineering Best practices built in (lots of choice) It changes the nature of consulting firms and IS HUGE portion of revenue from ERP consulting It is challenging to implement and cost is high Its growth has made it the predominant software

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How does ERP create value? It integrates a broad range of business functions It allows diverse enterprises to standardize It stops data redundancy and synchronization Data stored in one place

One version of the truth

It provides simultaneous access to real-time data It facilitates communication inside and outside the enterprise It provides a foundation for eBusiness

Growth of the ERP industry

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http://www.arcweb.com/txtlstvw.aspx?LstID=70d81ac5-3eb5-48c5-85a7-5244be2bc91d

Amity Institute of Education and Training 4 reasons for Growth of ERP

ERP creates competitive advantage Competitors get on the ERP bandwagon Firms like off the shelf software Gets rids of legacy systems and builds industry specific vertical integration Firms are putting more emphasis on IT and robust enterprise architecture leveraging the Internet

Amity Institute of Education and Training ERP Systems Concept

The Evolution of ERP SystemsA Historical Perspective

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The phenomenal growth of computing power and the Internet is bringing ever more challenges for the ERP vendors and the customers to redesign ERP products breaking the barrier of proprietorship and customization, and embracing the collaborative business over the Intranet, Extranet and the Internet in a seamless manner. The vendors already promise many "add-on" modules, some of which are already in the market as a sign of acceptance of these challenges by the ERP vendors. It is a never-ending process of reengineering and development bringing new products and solutions to the ERP market. ERP vendors and customers have recognized the need for packages that follow open architecture, provide interchangeable modules and allow easy customization and user interfacing.

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ERP Applications Take Hold

The 1990s saw, for the first time, many companies embrace product offerings from companies such as SAP AG, Peoplesoft, and Oracle that provided (or at least intended to provide) a single integrated package framework upon which most or all of a company's core business processes could be implemented, deployed, and used throughout the enterprise.

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ERP Applications Take Hold

For example, supply chain automation applications began appearing, and business-to-business (B2B) e-commerce applications such as electronic procurement (e-procurement) and buyer-to-seller electronic marketplaces are directly descended from these first-generation cross-enterprise supply chain applications, which in turn owe a large portion of their growth to the tenacity of ERP proponents who persevered throughout the decade and made successful large-scale, complex distributed computing systems a reality.

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Example ERP HR Module

HR processes
PAYROLL

BENEFITS
RECRUITING TRAINING

payroll programs, personnel files, health plan documents, recruiting, Servers & networks, etc.

IT resources

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Theme of ERP
Reflects assumptions about the way companies operate
Provides the integration of all the information flowing through a company i.e., Financial/accounting information HR information Customer information

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An Organization with ERP

A process-oriented organization Data at the core of the enterprise ERP as a major part of the enterprise architecture

Amity Institute of Education and Training Process Oriented Application

Process-oriented Application: Order Processing

Marketing/Sales

Accounting
ERP module
Integrated Database

Manufacturing

ERP systems are composed of a series of modules that support end-to end business processes (which is how value is added in an organization)

Amity Institute of Education and Training Cross-functional Processes i.e., Product Development

competitor analysis market research

MARKETING

R&D

PRODUCTION

Product development

needs analysis research market test

component design product test product release

process design equipment design production start

new product prototype

Amity Institute of Education ERP for Organizational Value Chainand Training

Support: Infrastructure, HR, R&D, Procurement

Primary:
Inbound logistics Operations Outbound logistics Marketing & Sales Service

Stream of activities Applies to both products and services

Profit Margin

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Enterprise Resource Planning (ERP) Systems

Enterprise Resource Planning Systems are enterprise systems meant to integrate data and support many of the major functions of organizations. Traditional focus: back office mostly isolated from customers (except sales) The goal of an ERP system is integrate data and to make the information flow dynamic and immediate, therefore, increasing its usefulness and value.

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Enterprise Resource Planning (ERP) Clients, employees and vendors all use the same system Systems (cont)
Major functions are integrated in a single software system

Replace an assortment of systems and numerous databases that typically existed in organizations. Integrate departments and functions across an organization sharing a common database Integrated information available in real-time. Data flows seamlessly no manual intervention and no paper

Do you see any issues with sharing data with customers and vendors?

ERP Supported Functions

Financial
Accts Receivable Asset Account Cash Forecast Cost Accounting General Ledger Profit Analysis Standard Costing

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Human Resources
Time Accounting Payroll Personnel Plan Travel Expense Benefits Mgmt

Operations & Logistics

Inventory MRP Plant Maintenance Production Planning Manufacturing Purchasing Quality Mgmt. Shipping

Sales & Marketing

Order Processing Pricing Sales Reporting Sales Planning Catalogue Mgmt

All of these functions. One software package. One database

Factors in development of ERP

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Speed and power of computing Hardware (servers and disk) now cheap and fast makes ERP feasible Happened in the 90s. Increasingly complex business environment Organizational complexity Increasingly demanding customers Globalization Increased competition Increasingly sophisticated software needs Legacy systems break under the strain of.all of the above

ERP Vendors

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Oracle - www.oracle.com Peoplesoft - www.peoplesoft.com J.D. Edwards - www.jdedwards.com SAP - www.sap.com SSA Global - www.baan.com Microsoft Others niche/specialty SYSPRO: Small manufacturers Banner: Universities Meditech: Hospitals

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ERP Strategic Issues

Compelling reasons - efficiencies Organization change - better than current Strategic advantage - gaining an advantage

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ERP Tactical Issues

Functional /Cross-functional integration Supply chain integration Decision support

Operational Issues ERP Implementation Configuration Methodology & Processes Plan vanilla to start Populating the data with integrity Modifications made Cut over or Phased rollout Add-ons

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ERP Benefits SAP R/3 Implementation

Process Improvements Eliminate redundant transactions More efficient staff and succession planning IT Reduced support costs Reduced infrastructure costs Strategic Direction Improved resource allocation More flexible organization Better future decision making

ERP Vendors

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Over 100 vendors globally 5 major vendors Lawson Healthcare JDEdwards Internet Oracle Database PeopleSoft HRM originally SAP German, pioneer of ERP

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Key Findings about ERP Market

Mature and concentrated The five vendors - more than 80% of the investment ERP purchases - 10+ year commitments Vendor size does not guarantee high performance, and the smaller ones perform to the leaders for specific criteria Vendors must be compared to that of best-of-breed vendors (e.g., Siebel for CRM, i2 for SCM)