Chapter 8: E-Commerce and Web 2.0

Q1: How do companies use e-commerce?

E-commerce is the buying and selling of goods and services through public and private computer networks.  On e-commerce activity, merchant companies are defined as those that take title to the goods they sell; they buy goods and resell them. Nonmerchant companies are those that arrange for the purchase and sale of goods without ever owning or taking title to those goods.

There are three main types of merchant companies, which are: those that sell directly to consumers (B2C), those that sell to companies (B2B), and those that sell to government (B2G). 

There are also three types of nonmerchant e-commerce companies. E-commerce auctions match buyers and sellers by using an e-commerce version of a standard auction (eBay).  Clearinghouses provide goods and services at a stated price and arrange for the delivery of the goods, but they never take title. An electronic exchange is another type of clearinghouse but it matches buyers and sellers-the process is similar to that of a stock exchange.

E-commerce improves market efficiency by leading to disintermediation, which is the elimination of middle layers of distributors and suppliers. Flow of price information is also improved. From the seller’s side, e-commerce provides information about price elasticity (measure of amount that demand rises or falls with changes in price) that has not been available before.

Economic factors that disfavor e-commerce are channel conflict, price conflict, logistics expense, and customer-service expense.

Q2: What technology is needed for e-commerce?

Almost all e-commerce applications use the three-tier architecture. The three tiers refer to three different classes of computers. The user tier consists of computers that have browsers that request and process web pages. The server tier consists of computers that run Web servers and process application programs. The database tier consists of computers that run a DBMS that processes SQL requests to retrieve and store data.

Hypertext Transfer Protocol (HTTP) is a protocol that is a set of rules for transferring documents and data over the internet. A web page is a document, coded in one of the standard page markup languages, that is transmitted using HTTP. Web servers are programs that run on a sever tier computer and that manage HTTP traffic by sending and receiving Web pages to and from clients. A browser is a computer program on the client computer that processes Web pages.  A commerce server is an application program that runs on a server tier computer; it receives requests from users via the Web server.

A Hypertext Markup Language (HTML) tag is a notation used to define a data element for display or other purposes. Hyperlinks are pointers to other Web pages; they contain the URL of the Web page to find when the user clicks the hyperlink.

Q3: How can information systems enhance supply chain performance?

A supply chain is a network of organizations and facilities that transforms raw materials into products delivered to customers.  At each level an organization can work with many organizations both up and down the supply chain, a supply chain is a network.  Four factors that driver supply chain performance are: facilities, inventory, transportation, and information.  Supply chain profitability is the difference between the sum of the revenue generated by the supply chain and the sum of the costs that all organizations in the supply chain incur to obtain that revenue. The bullwhip effect is when the variability in the size and timing of orders increases at each stage up the supply chain, from customer to supplier.

Q4: Why is Web 2.0 important to business?

It refers to a loose grouping of capabilities, technologies, business models, and philosophies. Many Web 2.0 programs are classified as “beta” –a pre-release version of software that is used for testing; it becomes obsolete when the final version is released. Businesses can benefit from this because it promotes advertising, social networking, and mashups.

Q5: How can organizations benefit from social networking?

Social Networking is the interaction of people connected by friendship, interests, business associations, or some other common trait that is supported by Web 2.0 technology. Social network applications are computer programs that interact and process information in a social network.  They run on servers provided by the application’s creator. 

Q6: How can organizations benefit from Twitter?

Twitter allows users to publish 140 character descriptions of anything. They can follow other Twitter users, and they can be followed. It is an example of a category of applications called microblogs, a web site on which users can publish their opinions, just like a web blog, but the opinions are restricted to small amounts of text, like Twitter’s 140 characters. Benefits from this are market research, relationship sales, and public relations.

Q7: What are the benefits and risks of user-generated content (UGC)?

Most common types of UGC are: ratings and surveys, opinions, customer stories, discussion groups, wikis, blogs, and video. Crowdsourcing is the process by which organizations involve their users in the design and marketing of their products. It combines social networking, viral marketing, and open-source design, saving considerable cost while cultivating customers.  Risks of using social networking and UGC are: junk and crackpots, inappropriate content, unfavorable reviews, mutinous movements, and dependency on the SN vendor.

Q8: 2020?

Perhaps the future technology will enable voice and video to be integrated into social networking. Perhaps with social networking, management styles will change and instead of only being able to manage 10 to 12 employees, managers will be in charge of 50 or 100.

  Kroenke, David. "Chapter 8: E-Commerce and Web 2.0." Using MIS. Upper Saddle River, NJ: Prentice Hall, 2011. 272-317. Print.

Chapter 7: Business Process Management

Q1: Why is business process management important to organizations?

Through Business Process Management (BPM), an organization can create, can assess, and alter business processes.  There are four stages to the process: Implement Processes, Assess Results, Model Processes, and Create Components, which for the most part, include all five elements of every information system. There are three types of processes that organization can plan or develop through BPM.  Functional processes involve activities within a single department or function, but the problem with this process is that they lead to islands of automation, sometimes called information silos because they work in isolation from one another. Cross-Functional Processes involve activities among several business departments.  This type of function eliminates the problems of isolated systems and data. The last type of process is an Interorganizational Process, where a business process crosses into multiple companies.

Q2: How do organizations solve business problems?

Diagrams are drawn out to illustrate the way that processes will be carried out, by who, how, and how the entire system connects. There’s the “assemble and ship equipment” process and the “top-level” business process.  There are three ways of changing business processes: changing a process by adding or removing resources without changing its structure, changing a process by altering process structure, or a business can do both.

Q3: What role do information systems play in business processes?

They provide an alternative for implementing the register clients activity and they facilitate linkages among activities.

Q4: What are the most common functional applications used today?

 A functional application is a computer program that supports or possibly automates the major activities in a functional process. Few businesses develop their own applications, so to reduce costs they license functional application software from a vendor and then adapt. The most functional applications used today are sales and marketing, operations, manufacturing, customer service, human resources, and accounting.

Q5: What are the problems with functional information systems?

One of the main problems is that data is duplicated because each application has its own database. When applications are isolated, processes are disjointed and as a consequence there is lack of integrated enterprise information.

Q6: What are the functions and characteristics of customer relationship management (CRM) information systems?

A customer relationship management (CRM) is a cross-functional application that tracks all interactions with the customer from prospect through follow-up service and support. They integrate all of the primary business activities. There are four phases of the customer life cycle: marketing, customer acquisition, relationship management, and loss/churn. CRM applications store data in a single database.

Q7: What are the functions and characteristics of enterprise resource planning (ERP) information systems?

Enterprise resource planning (ERP) applications provide even more integration than CRM. It integrates the primary value chain activities with human resources and accounting. The primary users are manufacturing companies through the software from SAP.  Major characteristics are that it is cross-functional, has a formal approach based on formal business models, maintains data in a centralized database; offers large benefits but is difficult with challenges & can be slow to implement, and it is often very expensive. The benefits of ERP are that it is successful in business processes, inventory reduction, lead-time reduction, improved customer service, greater real-time insight into organization, and higher profitability.

Q8: 2020?

Service-oriented architecture (SOA) is a design philosophy in which every activity is modeled as an encapsulated service and exchanged among those services are governed by standards. 

  Kroenke, David. "Chapter 7:Business Process Management." Using MIS. Upper Saddle River, NJ: Prentice Hall, 2011. 232-265. Print.

Ch 6: Data Communications

Q1: What is a computer network?

A computer network is a collection of computers that communicate with each other over transmission lines or wireless. There are three basic types of networks: local area networks, wide area networks, and internets.

Local Area Network (LAN): connects computers that reside in a single geographic location on the premises of the company that operates the LAN.

Wide area networks (WANs): connect computers at different geographic locations.

Internet: an internet is a network of networks; it connects LANs, WANs, and other internets.

Q2: What are the components of a LAN?

All hardware connects through a switch, which is a special-purpose computer that receives and transmits messages on the LAN.  Each device on a LAN has a hardware component called a network interface card (NIC) that connects the device’s circuitry to the cable. Each NIC has an identifier, the MAC (media access control) address. Nowadays, almost every computer has an onboard NIC. All devices on a LAN are connected with a unshielded twisted pair (UTP) cable but if they carry a lot of traffic or are far apart then optical fiber cables are used. All devices on the LAN must use the same protocol such as IEEE 802.3, Ethernet, 10/100/1000 Ethernet, etc.

Q3: What are the alternatives for a WAN?

Digital subscriber line (DSL) modems operate on the same lines as telephones but they operate so that their signals don’t interfere.

Cable modems provide high-speed data transmission using cable television lines.

A third alternative is WAN wireless connection such as EVDO from Sprint and Verizon, or AT&T’s HSDPA.

Another choice is to create a network of leased lines between company sites.

Q4: Why do organizations use virtual private networks?

A virtual private network (VPN) uses the internet to create the appearance of private point-to-point connections. VPN offers the benefit of point-to-point leased lines, and they enable remote access, both by employees and by any others who have been registered with the server.

Q5: How does encryption work?

Encryption is the process of transforming clear text into coded, unintelligible text for secure storage or communication.

Q6: What is the purpose of a firewall?

A firewall is a computing device that prevents unauthorized network access. A perimeter firewall sits outside the organizational network and it’s the first device that the internet encounters. In addition to the perimeter firewall, some organizations implement internal firewalls inside its network. It protects all of the organizations computers and its LAN.  A packet-filtering firewall examines each part of a message and determines whether to let that part pass. A firewall has an access control list (ACL) which encodes the rules stating which addresses are to be allowed and which are to be prohibited.

Q7: 2020?

Higher regulations and fees will be applied to internet usage in the future. Sales tax will be applied as well. At the moment, businesses are required to pay sales tax on purchases made over the internet from out of state, but few actually pay. Besides that, systems will also provide presence, which means that you’ll know who is on your system, who is available to the system, and who cannot currently be reached by the system.

  Kroenke, David. "Chapter 6: Data Communication." Using MIS. Upper Saddle River, NJ: Prentice Hall, 2011. 174-193. Print.