Electronic Business Systems

Yong Choi

School of Business

CSU, Bakersfield

Batch Processing (Periodic Mode)

• Batch processing: the aggregation of several business events over some period of time with the subsequent processing of these data as a group by the information system.– Gather all the sales transaction data and update over

night

– Getting rare

– Example: pay roll

Batch Processing of Accounting Data

Online Transaction Entry (OLTE)

• Enter business events directly, using computer input device or PC, into the information system at the time and place the event occurs.– Merges the traditional subprocesses of business

event occurrence (usually eliminating a source document) and record business event data.

– Considered online because the data entry device is connected to the computer.

Online Transaction Entry (Batch)

Online Real-Time (OLRT)

• Gather and record business event data at time of occurrence.

• Update master data instantaneously.• Provide results in real time.• Also known as immediate mode in which

little or no delay occurs between any two data processing steps.

Online Real-Time Processing

INTRODUCTION

• OLTP (online transaction processing)– Supports operational processing– Sales orders, accounts receivable, etc– Supported by operational databases & DBMSs

• OLAP (online analytical processing)– Helps build business intelligence– Supported by data warehouses and data-mining

tools

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OLTP, OLAP, and Business Intelligence

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BI tools•DMS•KMS

BUSINESS INTELLIGENCE

• Business intelligence (BI) – collective information about customers, competitors, business partners, competitive environment, and your internal operations for making important, effective, and strategic business decisions

• Hot topic in business today• Current market is $50 billion and double-digit

annual growth

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BI Objectives

• Help people understand– Capabilities of the organization– State of the art trends and future directions of

the market– Technological, demographic, economic,

political, social, and regulatory environments in which the organization competes

– Actions of competitors

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Viewing Business Intelligence

• Digital dashboard – displays key information gathered from several sources in a format tailored to the needs and wants of an individual

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DATA WAREHOUSES AND DATA MINING

• Help you build and work with business intelligence and some forms of knowledge

• Data warehouse – collection of information (from many places) that supports business analysis activities and decision making

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Data Warehouse Characteristics

• Multidimensional– Rows, columns, and layers

• Support decision making, not transaction processing– Contain summaries of information– Not every detail

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Data-Mining Tools

• Data-mining tools – software tools you use to query information in a data warehouse

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Data-Mining Tools

• Query-and-reporting tools – similar to QBE tools, SQL, and report generators

• Intelligent agents – utilize AI tools to help you “discover” information and trends

• Multidimensional analysis (MDA tools) – slice-and-dice techniques for viewing multidimensional information

• Statistical tools – for applying mathematical models to data warehouse information

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Data Marts• Data mart – subset of a data warehouse in

which only a focused portion of the data warehouse information is kept

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Definition of EC

• Electronic commerce (EC) is an emerging concept that describes the buying and selling of products, services and information via and the Internet and computer networks (EDI).

• E-Business?

EC vs. Traditional Commerce

History of EC

• 1970s: Electronic Funds Transfer (EFT)– Used by the banking industry to exchange account information over

secured networks

• Late 1970s and early 1980s: Electronic Data Interchange (EDI) for e-commerce within companies– Used by businesses to transmit data from one business to another

• 1990s: the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination– Cheaper to do business (economies of scale)

– Enable diverse business activities (economies of scope)

Why business is interested in EC?

• Not just save cost and increase productivity– Paper check Vs. E-check

• Change the nature of competition– Etrade.com / Amazon.com

• Create new businesses– Citrix.com / Priceline.com

Ecommerce infrastructure

• Information superhighway infrastructure– Internet, LAN, WAN, routers, etc.

– telecom, cable TV, wireless, etc.

• Messaging and information distribution infrastructure– HTML, XML, e-mail, HTTP, etc.

• Common business infrastructure– Security, authentication, electronic payment,

directories, catalogs, etc.

E-COMMERCE BUSINESS MODELS

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Some examples

• B2B: GM and suppliers (SCM)

• B2C: Amazon

• C2B: Priceline

• C2C: ebay

• G2C: Paying tax, Vehicle registration

• B2G: Lockheed (prodcuts/services to DoD)

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Intranet

• A private version of the Internet

• Use TCP/IP

• A network that uses a Web Browser as a universal applications client and that is accessible only by individuals within a particular enterprise

Public/ExternalInternet Users

Intranet

Clients

ServersERP

Legacy systems

E-mail servers

Web servers

Databases

Firewalls

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The Intranet (cont.)

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Extranet

• A collection of Intranets (known as extended Intranet)

• Also use TCP/IP

• A network that links business partners to one another over the Internet by tying together their corporate intranet

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Enterprise

ConsumersSuppliers

Clients

Business Partners

Distributors

VPN

Internet

Intranet

Extranet

IntranetIntranet

Intranet

Intranet

VPN VPN

VPN

VPN

RemoteEmployees

The Extranet (cont.)

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E-Commerce Security

• Cryptography– Encryption and decryption of

information

• Secret Key (symmetric) Cryptography

• Public Key (asymmetric) Cryptography

• Digital Signature

Cryptography• Any information (such as order) in cyberspace

must be delivered securely using cryptography technology.

• History of Cryptography

• Rewrite contents (encryption) so that they cannot be read without key

– Encrypting function: Produces encrypted message – Decrypting function: Extracts original message

• Method– Secret key Cryptography– Public key Cryptography– Digital signature

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Secret Key Cryptography

• Use a single key– Key: a set of random numbers to encrypt/decrypt

information

• Known as symmetric encryption or private key encryption

• The same key is used by sender and receiver• Easy to use, suitable when only two distinctive

parties are involved• Less secure (than public key cryptography),

when many parties are involved

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Secret Key Cryptography (symmetric)

Scrambled Message

Original Message

Sender

InternetScrambled Message

Keysender (= Keyreceiver)

Encryption

Original Message

Receiver

Keyreceiver

Decryption

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Public Key Cryptography

• Use a pair of key (public and private)• Known as asymmetric encryption • The public key

– Known to all authorized users

• The private key– Known only to key’s owner

• Easy to use, more secure (than secret key cryptography), suitable when many parties are involved

• Requires sharing of both keys

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Sender

Original Message

Scrambled Message

Scrambled Message

Public Keyreceiver

Original Message

Receiver

Private Keyreceiver

Internet

Public Key Cryptography Mechanism

Message

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Digital Signature

• Public key cryptography problem– Receiver cannot ensure that a

message is actually coming from sender. • Your subordinate can send a fake

message using your email system - which looks originated from “REAL” you.

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Digital Signature

• Goal

– Guarantee that message must have originated with a certain entity (increase security)

• Idea

– Encrypt digital signature with private key– Decrypt digital signature with public key

• Only owner of private key could have generated original signature

Sender

Original Message

Scrambled Message

Scrambled Message

Private Keysender

Original Message

Receiver

Public Keysender

Internet

Digital Signature

DigitalSignature