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Key concepts Summary Chapter 1 - 4

Information Management for IBA (Tilburg University)

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Key concepts info management book: E-commerce

Lecture 1: Chapter 1
Understand why it is important to study e-commerce.
• The next ive years hold out exciing opportuniies—as well as risks—for new and tradiional
businesses to exploit digital technology for market advantage. It is important to study e-commerce
in order to be able to perceive and understand these opportuniies and risks that lie ahead.
Deine e-commerce, understand how e-commerce difers from e-business, idenify the primary
technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.
• E-commerce involves digitally enabled commercial transacions between and among organizaions
and individuals.
• E-business refers primarily to the digital enabling of transacions and processes within a irm,
involving informaion systems under the control of the irm. For the most part, unlike e-commerce,
e-business does not involve commercial transacions across organizaional boundaries where value
is exchanged.
• The technology juggernauts behind e-commerce are the Internet, the Web, and increasingly, the
mobile plaform.
• From a business perspecive, one of the most important trends to note is that all forms of e-
commerce coninue to show very strong growth. From a technology perspecive, the mobile
plaform has inally arrived with a bang, driving astronomical growth in mobile adverising and
making true mobile e-commerce a reality. At a societal level, major issues include privacy and
government surveillance, protecion of intellectual property, online security, and governance of the
Internet.
Idenify and describe the unique features of e-commerce technology and discuss their business
signiicance. There are eight features of e-commerce technology that are unique to this medium:
• Ubiquity—available just about everywhere, at all imes, making it possible to shop from your
desktop, at home, at work, or even from your car.
• Global reach—permits commercial transacions to cross cultural and naional boundaries far more
conveniently and cost-efecively than is true in tradiional commerce.
• Universal standards—shared by all naions around the world, in contrast to most tradiional
commerce technologies, which difer from one naion to the next.
• Richness—enables an online merchant to deliver markeing messages in a way not possible with
tradiional commerce technologies.
• Interacivity—allows for two-way communicaion between merchant and consumer and enables
the merchant to engage a consumer in ways similar to a face-to-face experience, but on a much
more massive, global scale.
• Informaion density—is the total amount and quality of informaion available to all market
paricipants. The Internet reduces informaion collecion, storage, processing, and communicaion
costs while increasing the currency, accuracy, and imeliness of informaion.
• Personalizaion and customizaion—the increase in informaion density allows merchants to target
their markeing messages to speciic individuals and results in a level of personalizaion and
customizaion unthinkable with previously exising commerce technologies.
• Social technology—provides a many-to-many model of mass communicaions. Millions of users are
able to generate content consumed by millions of other users. The result is the formaion of social
networks on a wide scale and the aggregaion of large audiences on social network plaforms.
Describe the major types of e-commerce.
There are six major types of e-commerce:
• B2C e-commerce involves businesses selling to consumers and is the type of e-commerce that most
consumers are likely to encounter.
• B2B e-commerce involves businesses selling to other businesses and is the largest form of e-
commerce.
• C2C e-commerce is a means for consumers to sell to each other. In C2C e-commerce, the consumer
pre- pares the product for market, places the product for aucion or sale, and relies on the market

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maker to provide catalog, search engine, and transacion clearing capabiliies so that products can
be easily dis- played, discovered, and paid for.
• Social e-commerce is e-commerce that is enabled by social networks and online social relaionships.

• M-commerce involves the use of wireless digital devices to enable online transacions.
• Local e-commerce is a form of e-commerce that is focused on engaging the consumer based on his
or her current geographic locaion.
Understand the evoluion of e-commerce from its early years to today. E-commerce has gone through
three stages: innovaion, consolidaion, and reinvenion.
• The early years of e-commerce were a technological success, with the digital infrastructure created
dur- ing the period solid enough to sustain signiicant growth in e-commerce during the next
decade, and a mixed business success, with signiicant revenue growth and customer usage, but
low proit margins.
• E-commerce entered a period of consolidaion beginning in 2001 and extending into 2006.
• E-commerce entered a period of reinvenion in 2007 with the emergence of the mobile digital
plaform, social networks, and Web 2.0 applicaions that atracted huge audiences in a very short
ime span.
Describe the major themes underlying the study of e-commerce. E-commerce involves three broad
interrelated themes:
• Technology—To understand e-commerce, you need a basic understanding of the informaion
technologies upon which it is built, including the Internet, the Web, and mobile plaform, and a
host of complemen- tary technologies—cloud compuing, desktop computers, smartphones, tablet
computers, local area net- works, client/server compuing, packet-switched communicaions,
protocols such as TCP/IP, web servers, HTML, and relaional and non-relaional databases, among
others.
• Business—While technology provides the infrastructure, it is the business applicaions—the
potenial for extraordinary returns on investment—that create the interest and excitement in e-
commerce. Therefore, you also need to understand some key business concepts such as electronic
markets, informaion goods, business models, irm and industry value chains, industry structure,
and consumer behavior in digital markets.
• Society—Understanding the pressures that global e-commerce places on contemporary society is
criical to being successful in the e-commerce marketplace. The primary societal issues are
intellectual property, individual privacy, and public policy.
Idenify the major academic disciplines contribuing to e-commerce.
 There are two primary approaches to e-commerce: technical and behavioral. Each of these
approaches is represented by several academic disciplines.
• On the technical side, this includes computer science, operaions management, and informaion
systems.
• On the behavioral side, it includes informaion systems as well as sociology, economics, inance
and accouning, management, and markeing.

Lecture 2 Chapter 2 & 3 E-commerce infrastructure and building an E-commerce presence

Idenify the key components of e-commerce business models:
A successful business model efecively addresses eight key elements:
 Value proposiion—how a company’s product or service fulills the needs of customers. Typical e-
commerce value proposiions include personalizaion, customizaion, convenience, and reducion
of product search and price delivery costs.
• Revenue model—how the company plans to make money from its operaions. Major e-commerce
revenue models include the adverising model, subscripion model, transacion fee model, sales
model, and ailiate model.
• Market opportunity—the revenue potenial within a company’s intended marketspace.

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• Compeiive environment—the direct and indirect compeitors doing business in the same
marketspace, including how many there are and how proitable they are.
• Compeiive advantage—the factors that difereniate the business from its compeiion, enabling it
to pro- vide a superior product at a lower cost.
• Market strategy—the plan a company develops that outlines how it will enter a market and atract
customers.
• Organizaional development—the process of deining all the funcions within a business and the
skills necessary to perform each job, as well as the process of recruiing and hiring strong
employees.
• Management team—the group of individuals retained to guide the company’s growth and
expansion.

Describe the major B2C business models. There are several diferent business models being used in the
B2C e-commerce arena. The major models include the following:
• Portal—ofers powerful search tools plus an integrated package of content and services; typically
uilizes a combined subscripion/adverising revenue/transacion fee model; may be general or
specialized (vortal).
• E-tailer—online version of tradiional retailer; includes virtual merchants (online retail store only),
bricks- and-clicks e-tailers (online distribuion channel for a company that also has physical stores),
catalog merchants (online version of direct mail catalog), and manufacturers selling directly to the
consumer.
• Content provider—informaion and entertainment companies that provide digital content; typically
uilizes an adverising, subscripion, or ailiate referral fee revenue model.
• Transacion broker—processes online sales transacions; typically uilizes a transacion fee revenue
model.
• Market creator—uses Internet technology to create markets that bring buyers and sellers together;
typically uilizes a transacion fee revenue model.
• Service provider—ofers services online.
• Community provider—provides an online community of like-minded individuals for networking and
informaion sharing; revenue is generated by adverising, referral fees, and subscripions.

Describe the major B2B business models. The major business models used to date in the B2B arena
include:
 E-distributor—supplies products directly to individual businesses.
 E-procurement—single irms create digital markets for thousands of sellers and buyers.
 Exchange—independently owned digital marketplace for direct inputs, usually for a verical
industry group.
 Industry consorium—industry-owned verical digital market.
 Private industrial network—industry-owned private industrial network that coordinates supply
chains with a limited set of partners.

Understand key business concepts and strategies applicable to e-commerce.

E-commerce has had a major impact on the business environment in the last decade, and have afected:
 Industry structure—the nature of players in an industry and their relaive bargaining power by
changing the basis of compeiion among rivals, the barriers to entry, the threat of new subsitute
products, the strength of suppliers, and the bargaining power of buyers.
 Industry value chains—the set of aciviies performed in an industry by suppliers, manufacturers,
trans- porters, distributors, and retailers that transforms raw inputs into inal products and services
by reducing the cost of informaion and other transacion costs.
 Firm value chains—the set of aciviies performed within an individual irm to create inal products
from raw inputs by increasing operaional eiciency.

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 Business strategy—a set of plans for achieving superior long-term returns on the capital invested in
a irm by ofering unique ways to difereniate products, obtain cost advantages, compete globally,
or compete in a narrow market or product segment.

Discuss the origins of, and the key technology concepts behind, the Internet.
• The Internet has evolved from a collecion of mainframe computers located on a few U.S. college
campuses to an interconnected network of thousands of networks and millions of computers
worldwide.
• The history of the Internet can be divided into three phases: The Innovaion Phase (1961–1974),
the Insituionalizaion Phase (1975–1995), and the Commercializaion Phase (1995 to the present).

• Packet switching, TCP/IP, and client/server technology are key technology concepts behind the
Internet.
• The mobile plaform has become the primary means for accessing the Internet.
• Cloud compuing refers to a model of compuing in which irms and individuals obtain compuing
power and sotware applicaions over the Internet, rather than purchasing the hardware and
sotware and installing it on their own computers.
• Internet protocols and uility programs such as BGP, HTTP, SMTP and POP, SSL and TLS, FTP, Telnet,
Ping, and Tracert provide a number of Internet services.

Explain the current structure of the Internet.

• The main structural elements of the Internet are the backbone (composed primarily high-
bandwidth iber opic cable), IXPs (hubs that use high-speed switching computers to connect to the
backbone), CANs (campus/corporate area networks), and ISPs (which deal with the “last mile” of
service to homes and oices).
• Governing bodies, such as IAB, ICANN, IESG, IETF, ISOC, and W3C, have inluence over the Internet
and monitor its operaions, although they do not control it.

Understand the limitaions of today’s Internet and the potenial capabiliies of the Internet of the
future.
• To envision what the Internet of tomorrow will look like, we must irst look at the limitaions of
today’s Internet, which include bandwidth limitaions, quality of service limitaions, network
architecture limitaions, language limitaions, and limitaions arising from the wired nature of the
Internet.
• Internet2 is a consorium working together to develop and test new technologies for potenial use
on the Internet. Other groups are working to expand Internet bandwidth via improvements to iber
opics. Wire- less and cellular technologies are providing users of mobile devices with increased
access to the Internet and its various services. The increased bandwidth and expanded connecions
will result in a number of beneits, including latency soluions; guaranteed service levels; lower
error rates; and declining costs. The Internet of Things will be a big part of the Internet of the
future, with more and more sensor- equipped machines and devices connected to the Internet.

Understand how the Web works.

• The Web was developed during 1989–1991 by Dr. Tim Berners-Lee, who created a computer
program that allowed formated pages stored on the Internet to be linked using keywords
(hyperlinks). In 1993, Marc Andreessen created the irst graphical web browser, which made it
possible to view documents on the Web graphically and created the possibility of universal
compuing.
• The key concepts you need to be familiar with in order to understand how the Web works are
hypertext, HTTP, URLs, HTML, XML, web server sotware, web clients, and web browsers.

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Describe how Internet and web features and services support e-commerce.
• Together, the Internet and the Web make e-commerce possible by allowing computer users to
access product and service informaion and to complete purchases online.
• Some of the speciic features that support e-commerce include communicaion tools such as e-
mail, messaging applicaions, online message boards, Internet telephony, video conferencing, video
chaing, and telepresence; search engines; and downloadable and streaming media.
• Web 2.0 applicaions and services include social networks, blogs, and wikis.
• Virtual reality, augmented reality and ariicial intelligence technologies have begun to enter the
consumer market and atract signiicant atenion.

Understand the impact of mobile applicaions.

• The mobile app phenomenon has spawned a new digital ecosystem.
• Smartphone and tablet users spent the majority of their ime using mobile apps rather than the
mobile Web.
• There are a variety of diferent plaforms for mobile applicaion development including Objecive-C
(for iOS devices), Java (Android smartphones), and C and C++ (Windows mobile devices).
• Mobile apps for the iPhone are distributed through Apple's App Store, for Android devices through
Google Play, and for Windows mobile devices through Microsot’s Windows Phone Marketplace.
There are also third-party vendors such as Amazon's Appstor

Lecture 4: Types of Informaion Systems, Payment Systems, Chapter 4 +PDF handout

Informaion Management is the discipline that helps managers: to bridge the gap between Business and IT
– to control IT and to get IT delivering the services that the business needs

Key concepts in informaion management

 ICT (IT): Informaion and communicaion technology, all (hardware and sotware) products that will
store, retrieve, manipulate, transmit or receive informaion electronically in a digital form. Eg, PC,
LAN, smartphone, routers, memory
 I (informaion),
 IS (Informaion system): A speciic set of ICT(s) (hardware and sotware) + data + procedures +
people
o A system that fulils the (informaion) needs of employees, managers, departments in an
organizaion (or set of organizaions)
o A (human & ICT based) system that receives, stores and presents data for (some) people
 ICT
o The tradiional computer-based technologies (typically computer hardware and sotware)
o The more recent, and fast-growing range of digital communicaion technologies which allow
people and organizaions to communicate and share informaion digitally
 including smart phones, apps, handheld scanners, barcode equipment, digitally
enhanced products like spectacles, smart home and smart living technologies, etc.
 The Big Five technologies: SMACIT
o Social Media
o Mobile Technologies
o Big Data analysis
o Cloud compuing
o Internet of things
 Informaion vs data
o Informaion is what alters or reinforces understanding
o Informaion is a subjecive interpretaion of signal or data
o Data is the input of communicaion channel

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 Read the rest on the slides, slides informaion is too shit, cannot make any
notes out of it, fuck this course, stupid fuck
Chapter 4 Security, technology, and payment systems
Understand the quesions you must ask and answer, and the steps you should take, in developing an e-
commerce presence.
Quesions you must ask and answer when developing an e-commerce presence include:
 What is your vision and how do you hope to accomplish it?
 What is your business and revenue model?
 Who and where is the target audience?
 What are the characterisics of the marketplace?
 Where is the content coming from?
 Conduct a SWOT analysis.
 Develop an e-commerce presence map.
 Develop a imeline.
 Develop a detailed budget.

Explain the process that should be followed in building an e-commerce presence.

• Factors you must consider when building an e-commerce site include hardware, sotware,
telecommunicaions capacity, website and mobile plaform design, human resources, and
organizaional capabiliies.
• The systems development life cycle (a methodology for understanding the business objecives of a
sys- tem and designing an appropriate soluion) for building an e-commerce website involves ive
major steps:
1. Idenify the speciic business objecives for the site, and then develop a list of system funcionaliies
and informaion requirements.
2. Develop a system design speciicaion (both logical design and physical design).
3. Build the site, either by in-house personnel or by outsourcing all or part of the responsibility to out-
side contractors.
4. Test the system (unit tesing, system tesing, acceptance tesing, A/B (split) tesing, and mulivariate
tesing).
5. Implement and maintain the site.

• The basic business and system funcionaliies an e-commerce site should contain include a digital
catalog, a product database, customer tracking, shopping cart/payment system, an on-site blog, a
customer database, an ad server, a site tracking and reporing system, and an inventory
management system.
• Advantages of building a site in-house include the ability to change and adapt the site quickly as the
market demands and the ability to build a site that does exactly what the company needs.
• Disadvantages of building a site in-house include higher costs, greater risks of failure, a more ime-
consuming process, and a longer staf learning curve that delays ime to market.
• Using design templates cuts development ime, but preset templates can also limit funcionality.
• A similar decision is also necessary regarding outsourcing the hosing of the site versus keeping it
in-house. Relying on an outside vendor places the burden of reliability on someone else in return
for a monthly hosing fee. The downside is that if the site requires fast upgrades due to heavy
traic, the chosen hosing company may or may not be capable of keeping up. Reliability versus
scalability is the issue in this instance.

Idenify and understand the major consideraions involved in choosing web server and e-commerce
merchant server sotware.

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• Early websites used single-ier system architecture and consisted of a single-server computer that
delivered staic web pages to users making requests through their browsers. The extended
funcionality of today’s websites requires the development of a muli-iered systems architecture,
which uilizes a variety of specialized web servers, as well as links to pre-exising backend or legacy
corporate databases.
• All e-commerce sites require basic web server sotware to answer requests from customers for
HTML and XML pages. When choosing web server sotware, companies are also choosing what
operaing system the site will run on. Apache, which runs on the Unix system, is the market leader
• Web servers provide a host of services, including processing user HTML requests, security services,
ile transfer, a search engine, data capture, e-mail, and site management tools.
• Dynamic server sotware allows sites to deliver dynamic content, rather than staic, unchanging
informaion. Web applicaion server programs enable a wide range of e-commerce funcionality,
including creaing a customer database, creaing an e-mail promoional program, and acceping and
processing orders, as well as many other services.
• E-commerce merchant server sotware is another important sotware package that provides
catalog dis- plays, informaion storage and customer tracking, order taking (shopping cart), and
credit card purchase processing. E-commerce sotware plaforms can save ime and money, but
customizaion can signiicantly drive up costs. Factors to consider when choosing an e-commerce
sotware plaform include its funcionality, support for diferent business models, visual site
management tools and reporing systems, performance and scalability, connecivity to exising
business systems, compliance with standards, and global and mulicultural capability.

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