B4-The Internet: Implications for Business Flashcards
Electronic Commerce and Business (difference)
- E-commerce is far more specific-completion of exchange (buying and selling) transactions
- Electronic Business (E-Business)-far more broad.-use of info tech, partilcualy networking and communications tech, to perform business processes in electronic form.
Electronic Data Interchange (EDI)
The computer to computer exchange of business transaction documents.
- Reduced Handling Costs and Increased Processing Speed
- Stardard Data Format
a. Mapping-determining the correspondence bewtween data elements in an orgs terminology and data elements in standard EDI terminology.
b. Standards-XML-transmits data in flexible formats instead of standard formats of EDI. - Communications-using direct links between orgs,thorugh intermediaries (called service bureaus), through value added networks(VAN), or over the internet. Internet based EDI is replacing VAN-based because its cheaper.
- Features of EDI
- Costs of EDI
a. Legal Costs-modifying and negotiating trading contracts with trading partners and with communications providers
b. Hardware Costs
c. Costs of Translation Software-acquring, developing, and maintaining.
d. Costs of Data Transmission-decreasing with the evolution of EDI but still a cost
e. Process REengineering and Employee Training Costs for Affected Apps
f. Costs Associated with Security, Monitoring, and Control Procedures - EDI Controls
activity logs of failed transactions and network and sender/recipient acknowledgement.
- EDI Risk-unauthorized access to the org’s systems.
EDI vs E-commerce
EDI
cost-more expensive
security-more secure
speed-slower speed(batch)
network- VAN (private)
E-Commerce
cost-less expensive
security-less secure
speed-faster (OLRT)
network-internet(public)
Business Process Reengineering
Analysis and resdesign of business processes and information systems to acheive significant performance improvements.
Challenges faced in Businss Process Reengineering
- Tradition-changes employee culture and beliefs
- Resistance
- Time and Cost Requirements-costly and takes two or three years to complete
- Lack of Management Support-no mgmnt support than no change of succeeding
- Skepticism
- Retraining-time and money
- Controls-ensure system reliability and integrity cannot be deleted.
Business-To-Business (B2B) Types
Business sells its products or services to the public-B2C
Business sells its products or services to other business-B2B
Consumers sells products to other consumers-C2C
Importance of B2B
Make purchasing decisions faster, simpler, safer, more reliable, and more cost effective b/c companies can use websites to do reserach and transact business with many different vendors. The following are some advantages of B2B e commerce
- Speed-allows businesses to transact with each other more rapidly than with traditional phone, fax, or mail transactions. This emphasis on speed is often called internet Time.
- Timing-do not have to occur during normal business hours-globalization
- Personalization-business registers and ocmpletes an online profile with a new busines partner, it can be guided to areas of the website in which it is most interested every time it visits the website.
- Security-encryption
- Reliability-generally there is no opportunity for human errors (sort of)
B2B vs B2C
B2C is less complex.
B2B trans often involve many more participants in each individ trans, more complex products, and require fullfillment be more certain and predictable. Payment mechanisms for B2B are much more complex than B2C.
B2C-consumer protection by government regulations. The gov’t doesn’t have these type of regulations to protect businesses.
Enterprice Resource Planning Systems (ERP)
Its a cross functional enterprise system that integrates and automates the many business processes and systems that must work together in the manufacturing, logistics, distribution, accounting, finance, and human resource functions of a business. Comprises a number of modules that can function independently or as an intregrated system to allow data and information to be shared among all of the differenet departements and divisions of large businesses.
ERP Functions
- ERP systems store information in a central repository so that data may be entered once and then accessed and used by various departments
- Acts as the framework for integrating and improving an org’s ability to monitor and track sales, expense, customer service, distribution, and many other business functions.
- ERP systems can provide vital cross functional information quickly to managers across the org in order to assist them in decision-making processes-EIS
Supply Chain Management
SCM is concerned with the four important characteristics of every sale: what, when, where, and how much. For example, all customers, whether business or consumer, expect the following:
- The goods received should match the goods ordered-what
- The goods shoud be delivered on or before the date promised-when
- The goods should be delivered to the location requested-where
- The cost of goods should be as low as possible-how much
SCM Objectives
- Achieve Flexibility and Responsibility
a. planning-demand forecasting, product pricing, inv mgmnt
b. sourcing-procurement and credit and collections
c. making-product design, scheduling, facility mgmnt
d. delivery-order management and delivery scheduling - Supply Chain Planning Software
- Often Termed an Extension of ERP
Customer Relationship Management System (CRM)
Provide sales force function automation and customer services in an attempt to manage customer relationships.
CRM Objectives
- Increase customer satisfaction
- increase revenue and profits
CRM attempts to do this by appearing to market to each customer individually.
5 to 10 times more expensive to acquire a new customer than to obtain repeat business from an existing customer.
Other E-commerce Technologies
- Electronice Funds Transfer(s)-form of electronic payment for banking and retailing industries. The Federal Reserve Fedwire System(Automated Clearing House Network) is used frequently in EFT to reduce the time and expense required to process checks and credit transactions.
a. Third-Party Vendor-heavily insured and bonded to protect money
b. Data Encryption
c. Reduction in Errors
