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Transcript of Workshop in Electronic Commerce Presented by: Dr. Kelly Burke – UH Hilo School of Business Dr....
Workshop in Electronic CommerceWorkshop in Electronic Commerce
Presented by:
Dr. Kelly Burke – UH Hilo School of Business
Dr. Eric Jeschke – UH Hilo Computer Science Department
Funded by:
Department of Business, Economic Development, and Tourism
University of Hawaii Hilo School of Business
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PreviousKelly Burke
University of Hawaii at Hilo
Workshop in Electronic Workshop in Electronic CommerceCommerce
Objectives
Business Problem
EC Models
Facts and Forces
EC Levels
The WWW
Planning
Getting Started
Site Design
Security
Marketing
Payment
Infrastructure
Site Performance
Wrap Up
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PreviousKelly Burke
University of Hawaii at Hilo
Workshop ObjectivesWorkshop Objectives
You are planning to establish an eBusiness in the future
Whether you intend to: Plan and develop the site yourself Have an employee plan and develop the site Plan the site and have an ISP/Host develop it Have an ISP/Host plan and develop the site
You need to understand what Electronic Commerce is, how it works, how to plan and manage it.
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PreviousKelly Burke
University of Hawaii at Hilo
Workshop ObjectivesWorkshop Objectives
What is EC? What forms can EC take? How can EC help? How do I get started? How do I build a simple web page? What is involved in building a full web site?
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PreviousKelly Burke
University of Hawaii at Hilo
Workshop ObjectivesWorkshop Objectives
What are my options for doing E-Commerce? What software and hardware do I need? What makes a good web site? How do I market my site? What concerns should I have for security? How can I settle transaction payment? What future issues should I be aware of?
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PreviousKelly Burke
University of Hawaii at Hilo
Defining Electronic CommerceDefining Electronic Commerce
Use of electronic communications facilities to conduct any part of a business (internal or external) transaction.
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PreviousKelly Burke
University of Hawaii at Hilo
Business ProblemBusiness Problem
The world is attracted to the possibility of doing EC
Media frenzy (business publications) Appears easy (seems like every one has a
computer) Appears glamorous (look at the tech IPOs) Everyone is doing it / we can’t afford to miss out!!
Opportunity is SEDUCTIVE
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PreviousKelly Burke
University of Hawaii at Hilo
Business ProblemBusiness Problem
Gartner group advises online companies to beware Within 2 years, 95 % of online dot.coms will fail e.g., boo.com e-Toys layoffs
Misuse or misreading of opportunity can be costly e.g., Nor-Cal EMS experience – long term “ill will”
Lesson: opportunity without understanding and prioritization of objectives = problem
Implementation and Integration with business processes ARE King
e.g., Northwest and United Airlines fare wars
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PreviousKelly Burke
University of Hawaii at Hilo
Models of Electronic CommerceModels of Electronic Commerce
Inter-organizational (B2B) EDI, supply-chain interaction, etc.
Intra-organizational (B2E or BinB) E-portals, Lotus notes, etc.
Business-to-consumer (B2C) Direct marketing, e-malls, etc.
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PreviousKelly Burke
University of Hawaii at Hilo
Models of Electronic CommerceModels of Electronic Commerce
Consumer-to-consumer, peer-to-peer (C2C, P2P)
Auctions, electronic flea markets, etc.
E-marketplaces Exchanges
Non-business On-line communities (Geocities), news groups
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PreviousKelly Burke
University of Hawaii at Hilo
Taxonomy of Applied Business Taxonomy of Applied Business ModelsModels
Brokerage (http://globalsources.com/)
Advertising (http://www.altavista.com/)
Infomediary (http://www.job-search-engine.com/)
Merchant (http://www.etoys.com/)
Manufacturer (http://www.hp.com/)
Affiliate (http://s1.amazon.com/)
Community (http://geocities.yahoo.com/)
Subscription (http://prodigy.com/)
Utility (http://prodigy.com/)
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PreviousKelly Burke
University of Hawaii at Hilo
E-Business InitiativesE-Business Initiatives
E-Commerce— selling more goods via the Web E-care for customers— providing all kinds of customer
support on-line E-care for business partners— dedicated services
providing faster, better information for these important groups E-care for employees— improving their effectiveness by
making the right information and services available to them
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PreviousKelly Burke
University of Hawaii at Hilo
E-procurement— working closely with customers and suppliers to improve the tendering process and to better administer the huge number of transactions involved
E-marketing communications— using the Internet to better communicate marketing stance
E-Business InitiativesE-Business Initiatives
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PreviousKelly Burke
University of Hawaii at Hilo
Electronic Commerce:Electronic Commerce:Planning FrameworkPlanning Framework
Management Strategy, planning, resources, monitoring
Infrastructure Business services, information transfer, content,
networks, interfaces
Environmental constituents People, policies, technical standards, stakeholder
organizations
Business applications Catalogs, banking, procurement, auctions
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PreviousKelly Burke
University of Hawaii at Hilo
Planning Your EC Path:Planning Your EC Path:Levels* of E-Commerce DevelopmentLevels* of E-Commerce Development
Minimal online presence On-line catalog On-line transactions Automated value chain Market site Super market site
*Adapted from www.dotcomadvisor.com – 2000
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PreviousKelly Burke
University of Hawaii at Hilo
Motivation General pressure to “get on the net” Promote business entity
Information Financial HR
Technology issues Simple, In-sourced
Level I E-Commerce Development:Minimal
*Adapted from www.dotcomadvisor.com – 2000
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PreviousKelly Burke
University of Hawaii at Hilo
Level I E-Commerce Development:Minimal
Purchasing - Production - Sales
HumanResources
Finance
*Adapted from www.dotcomadvisor.com – 2000
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PreviousKelly Burke
University of Hawaii at Hilo
Motivation Pressure from customers and competitors
Information Product Service
Technology issues Searching, maintenance (e.g., changing product information) Customer personalization On-line activity tracking
Level II E-Commerce Development:On-line Catalog
*Adapted from www.dotcomadvisor.com – 2000
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PreviousKelly Burke
University of Hawaii at Hilo
Level II E-Commerce Development:On-line Catalog
Purchasing - Production - Sales
HumanResources
Finance
Marketing
*Adapted from www.dotcomadvisor.com – 2000
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PreviousKelly Burke
University of Hawaii at Hilo
Motivation Exploit Internet as new channel of distribution
Information Catalog / order
Technology issues Interactivity Integration of core businesses functions (e.g., sales and
accounting) Business issues
Order fulfillment capacity Building site traffic
Level III E-Commerce Development:On-line Transactions
*Adapted from www.dotcomadvisor.com – 2000
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PreviousKelly Burke
University of Hawaii at Hilo
Level III E-Commerce Development:On-line Transactions
Purchasing Production
HumanResources
Finance
MarketingSales
*Adapted from www.dotcomadvisor.com – 2000
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PreviousKelly Burke
University of Hawaii at Hilo
Motivation Customers and suppliers “want” more info Reduce cycle times and costs
Information Manufacturing, purchasing, shipping
Technology issues Systems integration Outsourcing
Business issues Sharing operational information with external entities
Level IV E-Commerce Development:Automated Value Chain
*Adapted from www.dotcomadvisor.com – 2000
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PreviousKelly Burke
University of Hawaii at Hilo
Level IV E-Commerce Development:Automated Value Chain
Purchasing Production
HumanResources
Finance
MarketingSales
*Adapted from www.dotcomadvisor.com – 2000
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PreviousKelly Burke
University of Hawaii at Hilo
Motivation Product comparisons, e.g., http://www.amazon.com
Information Competitor’s products/services Third-party product/service comparisons
Technology issues Handling traffic loads Monitoring/mining traffic
Business issues Corporate identity Objectivity of product comparisons
Level V E-Commerce Development:Market Site
*Adapted from www.dotcomadvisor.com – 2000
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PreviousKelly Burke
University of Hawaii at Hilo
Level V E-Commerce Development:Market Site
Purchasing Production
HumanResources
Finance
MarketingSalesReverse
Marketing
Competitors
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PreviousKelly Burke
University of Hawaii at Hilo
Motivation Become the “preferred” one-stop shop (i.e., marketplace), e.g.,
http://www.sabre.com/
Information Complimentary products/services
Technology issues Integrating associates systems/information
Business issues Managing customer AND supplier suggestions and requirements
Level VI E-Commerce Development: Super Market Site
*Adapted from www.dotcomadvisor.com – 2000
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PreviousKelly Burke
University of Hawaii at Hilo
Level VI E-Commerce Development: Super Market Site
Purchasing Production
HumanResources
Finance
MarketingSalesReverse
Marketing
Complimentors
Competitors
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PreviousKelly Burke
University of Hawaii at Hilo
Benefits of E-CommerceBenefits of E-Commerce
Increase sales Distributed market exposure Target narrow segments Create virtual communities which become targets
Reduce costs Sales inquiries Price quotes Product availability
Enhance product value Benefits work both ways – selling or buying
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PreviousKelly Burke
University of Hawaii at Hilo
Disadvantages of E-CommerceDisadvantages of E-Commerce
High ticket and perishables don’t work Costs / benefits can be hard to quantify Difficult to integrate with existing databases Fast pace of technology change Potential legal issues
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PreviousKelly Burke
University of Hawaii at Hilo
Big Business Survey ResultsBig Business Survey Results
Have a systematic, strategic approach to internet-based initiatives with top-level executive involvement (69% )
Have full time units dedicated to e-business development (47%)
Extent of e-business functionality isn’t beyond basic “brochure ware” (25%)
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PreviousKelly Burke
University of Hawaii at Hilo
Big Business Survey ResultsBig Business Survey Results
E-business accounts for less than 5% of revenues (79%)
Able to process payments online (25%) Creation of a convenient buying experience for
customers on the Web is “extremely important” (80%)
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PreviousKelly Burke
University of Hawaii at Hilo
On-line Transaction Completion On-line Transaction Completion
18%
82%
Complete transaction
Do not complete transaction
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PreviousKelly Burke
University of Hawaii at Hilo
Reasons for Abandoning Reasons for Abandoning On-line PurchasesOn-line Purchases
46
42
40
24
16
16
52
0 20 40 60
Too much information required
Did not want to enter credit card details
Web site malfunction
Could not find product
Could not specify product
Had to make phone call
Did not like returns policy
Percent
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PreviousKelly Burke
University of Hawaii at Hilo
Other Common Site ProblemsOther Common Site Problems
Navigation problem Finding information
cdw.com
Site too slow
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PreviousKelly Burke
University of Hawaii at Hilo
Forces Driving Online C2C Forces Driving Online C2C ShoppingShopping
Convenience (75%) Cost (38%) Context – opportunity to buy at right time
and right place (e.g., from work when I am thinking about that book)
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PreviousKelly Burke
University of Hawaii at Hilo
The Typical Online CustomerThe Typical Online Customer
Age: 30-49 Gender: Male Family status: Married with children Household annual income: $60,000 Amount spent online per year: $460
Source: Harris Interactive, Nielson Netratings
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PreviousKelly Burke
University of Hawaii at Hilo
The Typical Online CustomerThe Typical Online Customer
Completed online transactions: 10 Online sessions per week: 6 Unique sites visited per week: 6 Average surfing session: 31 minutes Time per site per week: 32 minutes Time online per week: 3 hours, 8 minutes
Source: Harris Interactive, Nielson Netratings
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PreviousKelly Burke
University of Hawaii at Hilo
The “Big Picture” In ECThe “Big Picture” In EC
WWW architecture How the web works Internet protocol URLs / domain names Internet communication
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PreviousKelly Burke
University of Hawaii at Hilo
Client(Browser)
Web Server
Commerce Server
ProductDatabase
Shopping Cart
Secure Transaction
Server
Dynamic
Static
PagesPagesPages
Pages
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PreviousKelly Burke
University of Hawaii at Hilo
How the Web Works: How the Web Works: Uniform Resource LocatorsUniform Resource Locators
Browsers differ in the way they are programmed But if WWW is to be useful to many – we need standard
way to identify a resource Example:
http://www.hawaii.edu:2074/~kburke/494/ch_3.ppt
URLs specify: protocol (e.g. http) host name (e.g., www.hawaii.edu) connection port on host (e.g. 2074) path on host to resource (494/ch_3.ppt)
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PreviousKelly Burke
University of Hawaii at Hilo
How the Web Works: How the Web Works: The Internet ProtocolThe Internet Protocol
TCP / IP protocol for communicating IP addressing Network Information Center allocates blocks
Class Address Network part Host part
A 18.155.32.5 18 155.32.5
B 128.171.12.237 128.171 12.237
C 192.66.12.56 192.66.12 56
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PreviousKelly Burke
University of Hawaii at Hilo
How the Web Works:How the Web Works:Domain NamesDomain Names
IP addresses are unfriendly Assign a human readable name to IP addresses Placed in a distributed, hierarchical, lookup
system (DNS) Domains and Hosts - pahuleka.uhh.hawaii.edu
Host || Domain || Host_name Org_name_1 Org_name_2 Org_type
pahuleka uhh hawaii edu
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PreviousKelly Burke
University of Hawaii at Hilo
How the Web Works:How the Web Works:Protocols and InfrastructureProtocols and Infrastructure
Messages versus Packets i.e., connection vs. connectionless
HTTP
TCP
IP
HTTP
TCP
IPPacket Packet Packet
Packet 3 Packet 2 Packet 1
Message (example: Page)
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PreviousKelly Burke
University of Hawaii at Hilo
Client(Browser)
Web Server
Commerce Server(Storefront)
ProductDatabase
Shopping Cart
Secure Transaction
Server
Dynamic
Static
PagesPagesPages
Pages
Back to Hosting
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PreviousKelly Burke
University of Hawaii at Hilo
Planning Your EC PathPlanning Your EC Path
Identify your organizational objectives Want to increase effectiveness of salesperson’s time
Identify ways EC can help achieve the objectives
Permit customers to order online / salesperson can spend time showing new products
Determine what resources are required Need: website, database, computer to process
orders, trained user to process orders Sample planning checklist
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PreviousKelly Burke
University of Hawaii at Hilo
Planning Your EC PathPlanning Your EC Path
Plan the implementation Select implementation strategies - e.g.,
http://strategis.ic.gc.ca/SSG/ir01580e.html#implementation
Outsource web site creation / maintenance, plan content, train users
Determine how you will monitor EC results / performance
Require periodic site reports from ISP, measure increase in new product sales
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PreviousKelly Burke
University of Hawaii at Hilo
Planning Your EC Path:Planning Your EC Path:Levels of E-Commerce DevelopmentLevels of E-Commerce Development
Minimal online presence On-line catalog On-line transactions Automated value chain Market site Super market site
Next
PreviousKelly Burke
University of Hawaii at Hilo
Getting StartedGetting Started
Identify appropriate business model Make or buy?
Do it in house or use a web site service provider? Connecting to the internet
DSL, ISDN, Fractional T1 Register a domain name
Domain names are easier than IP addresses Search on Network Solutions' WhoIs directoryhttp://www.networksolutions.com/cgi-bin/whois/whois
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PreviousKelly Burke
University of Hawaii at Hilo
Obtaining a Domain NameObtaining a Domain Name
Domain names are handled by DNS registrars
There are many web-based services for looking up names and/or registering them
Most of the popular names are taken, many by “squatters”
Registration of a name requires an annual fee and agreements with third parties for name service referral
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PreviousKelly Burke
University of Hawaii at Hilo
Domain Names.Domain Names.
Once you’ve registered a name, you have first right of renewal, unless…
Disputes are arbitrated by ICANN; most established trademark names and brands are recognized
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PreviousKelly Burke
University of Hawaii at Hilo
Getting StartedGetting Started
Components of the Firm’s Business Model Customer value Scope of products/services Price of value delivered Revenue sources Connected activities Implementation Capabilities Sustainability of advantage
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PreviousKelly Burke
University of Hawaii at Hilo
Getting StartedGetting Started
“Do-it-yourself” website services http://www.bigstep.com/ http://store.yahoo.com/
Hosting Understanding what “hosting” means and your
alternatives? Architecture?
Target market? Market research
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PreviousKelly Burke
University of Hawaii at Hilo
Web site considerations The services wanted How much your company can
contribute to the site, from manpower to electronic content
Time to design your site Time to create and program
your site Extra fees for software
development Fees for off-the-shelf
applications tools The size of the site
Training requirements Installation and server
maintenance Programming On corporate site hosting vs.
off-site Secure Server for financial
transactions Your bandwidth needs Your server capacity needs Location of your server at the
Web company or ISP company location
What is Involved in What is Involved in Establishing a Web Site?Establishing a Web Site?
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PreviousKelly Burke
University of Hawaii at Hilo
Identify what you have resources and time to do Identify what will be done “outside” the firm Identify which external parties will be involved
e.g., designer, ISP, web host? commerce provider?
Identify how you will assess their performance Decision metrics – e.g., are they reliable? On-going performance metrics – e.g., is their “uptime” what
they claim?
Getting Started: Web HostingGetting Started: Web Hosting
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PreviousKelly Burke
University of Hawaii at Hilo
Getting Started: Getting Started: The Marketing ProcessThe Marketing Process
Design, Procure, Make
Price, Sell, Promote
Distribute, Service
Make Product Sell ProductTraditional Process
Segmentation, Selection,
Value Positioning
Develop Product, Price, Source,
Distribute, Service Promote
Choose Value Provide Value Communicate ValueValue Creation
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PreviousKelly Burke
University of Hawaii at Hilo
Getting Started: Market ResearchGetting Started: Market Research
Define problem / research objectives
Develop research plan
Collect information
Analyze information
Present findings
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PreviousKelly Burke
University of Hawaii at Hilo
Getting Started: Getting Started: Market Research ResourcesMarket Research Resources
AMA www.ama.org
CommerceNet www.commerce.net
National Trade Data Bank http://www.stat-usa.gov/tradtest.nsf
CIA World Factbook www.odic.gov/cia/publications
On-line user survey data from Georgia Tech http://www.gvu.gatech.edu/user_surveys/
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PreviousKelly Burke
University of Hawaii at Hilo
Getting Started: ResourcesGetting Started: Resources
Hawaii State website: http://www.cochawaii.com/ Dept. of commerce : http://www.state.hi.us/dcca/ Registering your business:
http://www.businessregistrations.com/home.html Chamber of commerce: http://www.cochawaii.com/
Small businesses SBA: http://www.sba.gov/ SBA PRO-Net (procurement network):
• http://www.pro-net.sba.gov/
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PreviousKelly Burke
University of Hawaii at Hilo
Getting Started: Resources Getting Started: Resources
Various (legal, articles, research, policies, etc.) http://www.gtlaw.com.au/ecomm/
Federal government policy http://www.ecommerce.gov/
Description of eFed (federal govt. interagency procurement system)
http://www.sewp.nasa.gov/edi/hanson9711.html
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PreviousKelly Burke
University of Hawaii at Hilo
Web Site DesignWeb Site Design
Navigation Intuitive, predictable, consistent Longer pages - fewer links Site map - especially smaller sites (VISIBLE - TOP?)
• Category names/descriptions MUST be meaningful Searchability - perhaps for large sites BUT 50% more likely to find
information if no search - why?• Searching can be imprecise and frustrating
Easy to “quit” Links and “tabs” on top
• http://www.businessweek.com
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PreviousKelly Burke
University of Hawaii at Hilo
Web Site DesignWeb Site Design
Must distinguish between graphics design and web site design
Graphics design: your business image Web site design: what’s on your site Don’t get these confused!
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PreviousKelly Burke
University of Hawaii at Hilo
Graphic DesignGraphic Design
Don’t be tempted to skimp on developing your online image-your web site is your online storefront!
Best to hire out the design of the graphics and layout, even if you are editing the pages yourself
Some graphics design companies do web design, some do not yet; it may not matter.
Vector graphics allow you to scale images for your use throughout the business: on and offline
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PreviousKelly Burke
University of Hawaii at Hilo
Web Site DesignWeb Site Design
Planning - layout, mapping Purpose of site on home page What’s new section Content should fit the customer Style guide
For consistent content design -especially over time
Feedback mechanism(s) Mailto, forms, request routing, auto responses
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PreviousKelly Burke
University of Hawaii at Hilo
Designing it YourselfDesigning it Yourself
KISS philosophy rules: make the design easy to navigate!
Avoid clutter Avoid lots of graphics Avoid cutesy clip art Avoid lots of fonts Avoid long pages Provide site navigation tools
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PreviousKelly Burke
University of Hawaii at Hilo
Web Site DesignWeb Site Design
Loading time!!! Pictures of some products but not others Interactivity
Forms, object manipulation, applet running Error handling - inform user about Being able to find out more about a particular
item by a link in the cart Instructions - ordering, interacting, feedback
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PreviousKelly Burke
University of Hawaii at Hilo
Web Site DesignWeb Site Design
Backgrounds - readability and colors Too much white space perceived as
“complex” Be aware of screen resolution and position
ISPs and design gurus use Unix workstations with monster monitors
Typical users have 15” monitors Design for a “lowest common denominator”
monitor
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PreviousKelly Burke
University of Hawaii at Hilo
Web Site DesignWeb Site Design
Place items in frame to: Keep them on-screen and To make display more effective
• best banners on Netscape got 4% click-throughs• Placed in frames generated 30% click-throughs
e.g., Use of tables can simulate frames
e.g., http://www.businessweek.com Examples of bad design
e.g., http://www.webpagesthatsuck.com
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PreviousKelly Burke
University of Hawaii at Hilo
Web Content DesignWeb Content Design
Content takes many shapes Will change dramatically More robust, comprehensive, and usable medium
Challenges in developing a successful online storefront
Choosing the right software solution for your site 3 options
• build your own software• purchase a commercial software product• rent from a Web host
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PreviousKelly Burke
University of Hawaii at Hilo
Security IssuesSecurity Issues
To maintain a successful online business, you MUST
Secure your E-Commerce transactions Secure your servers and data Formulate, post and follow a customer
privacy policy
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PreviousKelly Burke
University of Hawaii at Hilo
Securing TransactionsSecuring Transactions
Need to secure communications between client (customer at a web browser) and server (your web site and beyond)
What kinds of data need securing? Credit card data (card number, expiration date, etc.) Personal data (phone #, address, etc.) Order data Etc.
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PreviousKelly Burke
University of Hawaii at Hilo
Secure Communications MeanSecure Communications Mean
Authentication: want to make sure that each side is actually dealing with the right host and not some impostor or "man-in-the-middle"
Integrity: want to make sure that data is not altered during transit in any way
Privacy: want to ensure that data is not snooped by a third party in transit
Problem: how to achieve this on the insecure Internet?
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PreviousKelly Burke
University of Hawaii at Hilo
EncryptionEncryption
A secret "key" is used to encrypt ("scramble") and decrypt ("unscramble") any data passed between browser and server.
The encryption technique and key are chosen so that it would be computationally infeasible to decipher the data without the key (i.e. break the code).
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PreviousKelly Burke
University of Hawaii at Hilo
If the key is kept secret, the "right" encrypted data can only be generated by the browser or the server. Encrypted data is meaningless to snoopers and cannot be altered without detection.
This provides authentication, integrity and privacy.
EncryptionEncryption
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PreviousKelly Burke
University of Hawaii at Hilo
Sender
Original Message
Scrambled Message
Scrambled Message
Public Keyreceiver
Original Message
Receiver
Private Keyreceiver
Internet
Public Key CryptographyPublic Key Cryptography
Message
Sender
Original Message
Scrambled Message
Scrambled Message
Private Keysender
Original Message
Receiver
Public Keysender
InternetDigital
Signature
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PreviousKelly Burke
University of Hawaii at Hilo
Key Distribution ProblemKey Distribution Problem
Problem: how to get the key to the other party over an insecure network like the Internet?
Answer: public key encryption PKE uses two keys: whichever one is used to
encrypt, the other one must be used to decrypt Typically, one key is made public, the other is
kept secret. How does this help?
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PreviousKelly Burke
University of Hawaii at Hilo
Session KeysSession Keys
If the browser can get the public key of the merchant, it could encrypt a one-time session key and send it over.
Then the two sides could use the shared session key to encrypt and communicate securely.
To get the merchant's public key, the server could send it over to the browser when it first connects.
Problem: how does the browser know if it has the real public key and not a fraudulent one?
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PreviousKelly Burke
University of Hawaii at Hilo
Digital SignaturesDigital Signatures
A merchant's public key can be digitally signed. A digital signature is a token (a little bit of data)
attached to the end of the key. Using encryption technology, it is possible to verify the
authenticity of the key by examining the "signature". If you trust the key signer, you can trust that the key
is valid. Who can be trusted to sign (vouch for) a merchant's
public key?
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PreviousKelly Burke
University of Hawaii at Hilo
Certificate AuthorityCertificate Authority
A certificate authority is a trusted third party that is in the business of signing public keys. A key signed by a CA is called a digital certificate.
A merchant purchases a certificate and puts it on his server.
When a browser makes a connection the certificate is downloaded. The browser verifies the signature on the certificate and extracts the public key.
The browser encrypts a session key and sends it to the server. Both sides can now securely communicate.
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PreviousKelly Burke
University of Hawaii at Hilo
Digital CertificatesDigital Certificates
Certificates are available from a number of certificate authorities. One of the first, and biggest, is Verisign (www.verisign.com)
Certificates start at about $150 and go up from there, depending on the expected use of the certificate.
A certificate is dated and is only good for a certain time period. After that date a browser will reject it.
To keep current, a merchant will need to purchase new certificates just before the old ones expire.
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PreviousKelly Burke
University of Hawaii at Hilo
Name : “Richard”key-Exchange Key :Signature Key :Serial # : 29483756Other Data : 10236283025273Expires : 6/18/96Signed : CA’s Signature
CertificateCertificate
Identifying the holder of a public key (Key-Exchange)
Issued by a trusted certificate authority (CA)
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PreviousKelly Burke
University of Hawaii at Hilo
Securing Your SiteSecuring Your Site
Disable all nonessential services, programs and user accounts
Use complex passwords and change them reasonably often
Keep up with the latest security bulletins (CERT) and software updates
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PreviousKelly Burke
University of Hawaii at Hilo
Monitor logs for suspicious activity Consider installing a firewall, monitoring
software and/or secure communications software
Have a periodic professional security audit Does your “Host” provide all of this?
Securing Your SiteSecuring Your Site
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PreviousKelly Burke
University of Hawaii at Hilo
Customer PrivacyCustomer Privacy
What does your company do with the data it collects from customers?
Does not release customer data outside the company, under any circumstances, except to legal authorities
makes names, addresses, etc. available to selected partners and third parties
sells customer data to marketers These are all valid policies! Need to be up front: formulate a privacy policy, post
it on your web site and follow it !
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PreviousKelly Burke
University of Hawaii at Hilo
Electronic Payment ProtectionElectronic Payment Protection
Secure Sockets layer (SSL) or Secure Electronic Transaction (SET) protocols
Certification Authority (e.g., http://www.verisign.com)
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PreviousKelly Burke
University of Hawaii at Hilo
Secure Electronic Transaction Secure Electronic Transaction (SET) Protocol(SET) Protocol
Cardholder, merchant, CA, payment gateway
All entities have certificates
Cardholder keeps a security certificate with them
Either in their computer - not mobile - or In the form of an “electronic wallet”
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PreviousKelly Burke
University of Hawaii at Hilo
Cardholder requests purchase from merchant Merchant requests from payment gateway:
Payment authorization Payment capture
Payment gateway obtains Authorization from card issuer Payment capture information
Secure Electronic Transaction Secure Electronic Transaction (SET) Protocol(SET) Protocol
Entities of SET Protocol in Cyber Shopping
IC CardReader
Customer xCustomer y
With Digital WalletsCertificateAuthority
Electronic Shopping Mall
Merchant A Merchant B
Credit CardBrand
ProtocolX.25
Payment Gateway
95
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PreviousKelly Burke
University of Hawaii at Hilo
Secure Electronic Transaction Secure Electronic Transaction (SET) Protocol(SET) Protocol
Merchant sends payment capture request to CA
CA verifies information with acquiring (merchant’s) bank
Merchant receives settlement from acquiring bank
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PreviousKelly Burke
University of Hawaii at Hilo
SET SET vsvs. SSL. SSL
Secure Electronic Transaction (SET) Secure Socket Layer (SSL)Complex Simple
SET is tailored to the credit card payment to the merchants.
SSL is a protocol for general-purpose secure message exchanges (encryption).
SET protocol hides the customer’s credit card information from merchants, and also hides the order information to banks, to protect privacy. This scheme is called dual signature.
SSL protocol may use a certificate, but there is no payment gateway. So, the merchants need to receive both the ordering information and credit card information, because the capturing process should be initiated by the merchants.
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PreviousKelly Burke
University of Hawaii at Hilo
Electronic PaymentElectronic Payment
Debit cards Used in B2C
Electronic funds transfer (EFT) / E-checks Electronic version of paper checking Combines certificates and signatures with payment Used in B2B ePay by Visa, SafeCheck (see www.echeck.org)
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PreviousKelly Burke
University of Hawaii at Hilo
Electronic PaymentElectronic Payment
Stored-value cards, e-cash (e.g., Mondex, CyberCoin, VisaCash)
permit cost-effective “micropayments” mondex smart cards
• battery operated card readers• swipe card• value transferred to retailer’s terminal• no authorization required
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PreviousKelly Burke
University of Hawaii at Hilo
Electronic PaymentElectronic Payment
Electronic wallet (Fujitsu, Mondex) can be used for Internet transaction settlement handheld terminal values are transferred from customer’s account to
customer’s card or to merchant’s account via either the card or a Web
connection can store values for different currencies http://www.mondex.com/
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PreviousKelly Burke
University of Hawaii at Hilo
Electronic PaymentElectronic Payment
Closed e-cash system Values recharged (transferred) only by bank VisaCash
Open e-cash system Values can be transferred between cards Mondex
eMail-grams Pay money to or receive money from anyone with email e.g., www.Paypal.com
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PreviousKelly Burke
University of Hawaii at Hilo
Marketing Your Web SiteMarketing Your Web Site
One-to-one marketing Customer service Banner ads Search engines
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PreviousKelly Burke
University of Hawaii at Hilo
One-to-One MarketingOne-to-One Marketing
Relationship marketing “Overt attempt of exchange partners to build a
long term association, characterized by purposeful cooperation and mutual dependence on the development of social, as well as structural, bonds”
“Treat different customers differently” Able to change the manner its products are
configured or its service is delivered, based on the individual needs of individual customers
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PreviousKelly Burke
University of Hawaii at Hilo
One-to-One MarketingOne-to-One Marketing
Customer loyalty Purchase behavior One of the most significant contributors to
profitability Increase profits; strengthen market position; become
less sensitive to price competition; increase cross-selling success; save cost, etc.
Real world examples• 1-800-FLOWERS • Amazon.com• Federal Express (FedEx)
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PreviousKelly Burke
University of Hawaii at Hilo
One-to-One MarketingOne-to-One Marketing
Building and maintaining customer loyalty Maintain continuous interactions between
consumers and business Make a commitment to provide all aspects of the
business online Build different sites for different levels of
customers Willing to invest capital, both human and financial,
in the information systems, to insure continuous improvement in the supporting technology as it becomes available
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PreviousKelly Burke
University of Hawaii at Hilo
One-to-One MarketingOne-to-One Marketing
Building and maintaining customer loyalty Make a commitment to use the information collected
about customers in an ethical manner Realistic managerial expectations in the payback
period and cost recovery Set acceptable standards for response time in
customer service (24-48 hours); Use intelligent agents to expedite and standardize responses whenever possible
Ability to change and customize information and services quickly and inexpensively is a must
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PreviousKelly Burke
University of Hawaii at Hilo
Customer service A new look and feel
Install Web serverswhich allow eachcustomer to create
individual web pagesthat can be customized
to record purchasesand preferences
Put the burden on thecustomer to treat a
problem or inquiry andreceive information
bit by bit
One-to-One MarketingOne-to-One Marketing
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PreviousKelly Burke
University of Hawaii at Hilo
One-to-One MarketingOne-to-One Marketing
Customer service Information can be directed to the customer efficiently Creation of a database which records purchases,
problems, and requests is facilitated Information can now be traced and analyzed for
immediate response If customer service options and solutions do not
maintain the same level of excitement and interaction as the advertising and sales presentations, the level of intensity declines and the vendor runs the risk of losing customers
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PreviousKelly Burke
University of Hawaii at Hilo
Implementing Customer Service Implementing Customer Service in Cyberspacein Cyberspace
Product Life Cycle Phase 1. Requirements : assisting the customer
to determine needs Phase 2. Acquisition : helping the customer to
acquire a product or service
Phase 3. Ownership : supporting the customer on an ongoing basis
Phase 4. Retirement : helping the client to dispose of a service or
product
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PreviousKelly Burke
University of Hawaii at Hilo
Types of Customer Service Functions
Answering customer inquires Providing technical and other information Letting customers track accounts or order
status Allowing customers to customize and order
online
Implementing Customer Service Implementing Customer Service in Cyberspacein Cyberspace
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PreviousKelly Burke
University of Hawaii at Hilo
Implementing Customer Service Implementing Customer Service in Cyberspacein Cyberspace
Doingbusinessvia Web
Companiesunderstand theircustomers’ needsand buying habits
better
Companiescustomize their
future marketingefforts
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PreviousKelly Burke
University of Hawaii at Hilo
Tools of Customer ServiceTools of Customer Service
Personalized Web Pages Used to record purchases and preference Direct customized information to customers efficiently
Chat Room Discuss issues with company experts; with other
customers
E-mail Disseminate product information, conduct customer
inquiry correspondence FAQs
Not customized, no personalized feeling, no contribution to relationship marketing
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PreviousKelly Burke
University of Hawaii at Hilo
Tools of Customer ServiceTools of Customer Service
Help Desks and Call Centers A comprehensive customer service entity EC vendors take care of customer service issues
communicated through various contact channels Telewebs
• combines Web channels, such as automated e-mail reply, Web knowledge bases and portal-like self service with call center agents or field service personnel
Internet• a medium of instant gratification• demand for both prompt replies and proactive alerts
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PreviousKelly Burke
University of Hawaii at Hilo
Marketing Your Web Site: Marketing Your Web Site: Banner AdsBanner Ads
People don’t scroll sideways Get everything on one screen width
Studies find the lower right corner to be most effective location for an ad
http://www.webreference.com/dev/banners/ Placing banners last is more effective than
first Placing banners top and bottom is more
effective than just top
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PreviousKelly Burke
University of Hawaii at Hilo
Marketing Your Web SiteMarketing Your Web Site
Web malls Host sites and provide shopping “portals” e.g., http://store.yahoo.com/
Search engines Passive strategy – “meta” tags
• e.g., www.sba.gov Active strategy – submit site to search engines
• e.g., http://www.submitit.com/
E-mail list rental Opt-in mailing lists (direct marketing) e.g., http://www.netcreations.com/main?page=welcome
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PreviousKelly Burke
University of Hawaii at Hilo
Publicizing your sitePublicizing your site
Simply registering your domain name will not bring people to your “door”
The ugly reality of search engines: pay to play How to get found in a billion web pages? Get
mentioned on TV Use your “bricks” to promote your “clicks” Develop relationships with other online sites
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PreviousKelly Burke
University of Hawaii at Hilo
Infrastructure RequirementsInfrastructure Requirements
Internet service Site content Site Design Site / Commerce functionality Database
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PreviousKelly Burke
University of Hawaii at Hilo
Client(Browser)
Web Server
Commerce Server(Storefront)
ProductDatabase
Shopping Cart
Secure Transaction
Server
Dynamic
Static
PagesPagesPages
Pages
Back to Hosting
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PreviousKelly Burke
University of Hawaii at Hilo
Web Hosting IssuesWeb Hosting Issues
Bandwidth Capabilities and specifications Firewall system Wireless delivery Buy, rent, or lease Maintenance, upgrade, and service of the equipment
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PreviousKelly Burke
University of Hawaii at Hilo
Developing E-Commerce Developing E-Commerce InfrastructureInfrastructure
Hosting the site Obtaining a domain name Graphics design and web site design Web site programming Secure transactions and purchasing
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PreviousKelly Burke
University of Hawaii at Hilo
HostingHosting
Where will the site be hosted? Your premises Leased space at an ISP Rack mounted server at a professional hosting
company Managed host at a hosting co. Custom outsourced site “Template” outsourced site (e.g. Yahoo
storefront)
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PreviousKelly Burke
University of Hawaii at Hilo
Hosting: Doing it YourselfHosting: Doing it Yourself
Buy servers and network equipment and lease bandwidth (“pipes”) from Telco
Advantages: Complete control over all aspects of site, including security,
functionality, integration with existing business systems Cost savings once level of online commerce reaches a
certain threshold Disadvantages:
IT costs to manage equipment, systems Initial capital investment Physical infrastructure impact
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PreviousKelly Burke
University of Hawaii at Hilo
Hosting: Lease Space at an ISPHosting: Lease Space at an ISP
Rent space for your equipment to be hosted at an ISP Pay bulk bandwidth charges to ISP Advantages:
Complete control over site Smaller start up expenses
Disadvantages: Must manage your own systems, usually remotely Cost of purchasing equipment Harder to integrate with existing business systems
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PreviousKelly Burke
University of Hawaii at Hilo
Hosting:Hosting:Lease Equipment at Hosting Lease Equipment at Hosting
VendorVendor Rent equipment at a professional hosting
company Pay bulk bandwidth charges (sometimes rolled
into hosting package) Advantages:
Aging equipment is not your problem Smaller start up costs
Disadvantages: Must manage your own system
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PreviousKelly Burke
University of Hawaii at Hilo
Hosting: Hosting: Managed Host at Hosting VendorManaged Host at Hosting Vendor
Rent use of a system at a hosting vendor System is managed for you Can mix and match services (web, email,
ordering, etc.) You are responsible for site content Advantages:
System is managed for you You maintain control over site design, functionality
Disadvantages: Ongoing expenses
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PreviousKelly Burke
University of Hawaii at Hilo
Hosting: Hosting: Custom Outsourced SiteCustom Outsourced Site
Outsource the development of the web site May be a different entity than hosting co.
(e.g. consultant) Advantages:
Custom designed site No web development or system management
required on your part Disadvantages:
Less control over costs
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PreviousKelly Burke
University of Hawaii at Hilo
Hosting: Hosting: Template Outsourced SiteTemplate Outsourced Site
Use pre-designed “templates” for building site from dot-coms catering to small business owners
Advantages: Very low cost (some free!)
Disadvantages: Cookie-cutter feel to sites Little control over site or design Customer service?
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PreviousKelly Burke
University of Hawaii at Hilo
Web Programming: Implementing Web Programming: Implementing the Software Infrastructurethe Software Infrastructure
Most E-Commerce sites are not a static collection of web pages, but dynamic interactive systems
Need to develop the software infrastructure that drives the site: databases, business rules, secure ordering, web user interfaces, etc.
Q: Do you need to interface your site to your existing IT infrastructure? Database?
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PreviousKelly Burke
University of Hawaii at Hilo
Web Programming: Implementing Web Programming: Implementing the Software Infrastructurethe Software Infrastructure
There are “turnkey” solutions for implementing some of this software infrastructure
Unless you have a simple business, these probably won’t be satisfactory
Reality check: custom software development takes time and money
Programmers are not artists, and vice versa! Don’t hire programmers to write web pages and don’t hire webmasters to write sophisticated software.
Don’t hire either one to design your corporate image!
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PreviousKelly Burke
University of Hawaii at Hilo
Electronic storefront must contain: A merchant system or storefront that provides
the merchant’s catalog with products, prices and promotions
A transaction system for processing orders and payments and other aspects of the transaction
A payment gateway that routes payments through existing financial systems primarily for the purpose of credit card authorization and settlement
Web Programming: Implementing Web Programming: Implementing the Software Infrastructurethe Software Infrastructure
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PreviousKelly Burke
University of Hawaii at Hilo
Web Programming: Implementing Web Programming: Implementing the Software Infrastructurethe Software Infrastructure
Purchase a suite of software that claims to integrate storefront functions into a single box
iCat Corp.’s Electronic Commerce Suite and Commerce Publisher
Open Market’s Transact and LiveCommerce http://www.openmarket.com
Microsoft Corp.’s Site Server Commerce Edition IBM Corp.’s Net. Commerce Pro Saqqara Systems’ StepSearch Professional
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PreviousKelly Burke
University of Hawaii at Hilo
Electronic Commerce Suites• Offer merchants greater
flexibility, specialization, customization and integration in supporting complete front and back-office functionality
Internet
CatalogApplication
CustomerManagement,Registration,
Profiles, Service
Order Capture,Completion Fulfillment
SystemsPayment
Processing(SET & Purchase
Order)
CatalogDatabase
CustomerDatabase
OrderDatabase
PaymentDatabase
FinancialNetwork
WebBrowser Web
Server
Open Market E-Commerce Server Architecture
Web Programming: Implementing Web Programming: Implementing the Software Infrastructurethe Software Infrastructure
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PreviousKelly Burke
University of Hawaii at Hilo
Web Programming: Implementing Web Programming: Implementing the Software Infrastructurethe Software Infrastructure
Making a Web catalog into a multimedia extravaganza Not easy and expensive Lower end systems : begin at $25,000 High end systems : $250,000 to $2
million
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PreviousKelly Burke
University of Hawaii at Hilo
Secure Transactions and OrderingSecure Transactions and Ordering
Payment handling: one of the easiest things to outsource
To handle it on your own web server, you need to obtain a certificate from a Certificate Authority (CA)
Certificates allow authenticated, encrypted, trusted connections
Certificates expire and must be renewed for an annual fee
You probably should be concerned about secure transactions even if payment handling is outsourced
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PreviousKelly Burke
University of Hawaii at Hilo
Review ofReview ofE-Commerce InfrastructureE-Commerce Infrastructure
Hosting the site Obtaining a domain name Graphics design and web site design Web site programming Secure transactions and purchasing
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PreviousKelly Burke
University of Hawaii at Hilo
Putting together a successful E-Commerce web site requires different skills from different people:
Graphics designer Webmaster Programmer(s) Other business entities: marketing, etc.
Few people have all these effective skills
Review ofReview ofE-Commerce InfrastructureE-Commerce Infrastructure
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PreviousKelly Burke
University of Hawaii at Hilo
The good news:there are many choices for hosting and outsourcing the infrastructure development
Your choices will depend on: How central is the E-Commerce aspect of your
business to the core focus of your business? What is your current investment in IT and existing
infrastructure? What are your available resources for capital
investment?
Review ofReview ofE-Commerce InfrastructureE-Commerce Infrastructure
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PreviousKelly Burke
University of Hawaii at Hilo
Outsourcing: Pros and ConsOutsourcing: Pros and Cons
Pros Faster Resources readily available Competitive - many alternatives You can focus on what you do best You’ll learn as you go
Cons Can be costly Always risky – need to do research before and
monitor performance during and after
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PreviousKelly Burke
University of Hawaii at Hilo
Monitoring Website PerformanceMonitoring Website Performance
Log details Server log Access log
Visit details Hits What pages do they visit? How long do they spend on a page? What “areas” of a page did they scan? Relationship of hits/pages visited/orders
Feedback survey
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PreviousKelly Burke
University of Hawaii at Hilo
Future Developments in ECFuture Developments in EC
Public portals Content Community Commerce e.g., http://www.ivillage.com
Exchanges Industry sponsored Private Public
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PreviousKelly Burke
University of Hawaii at Hilo
Future Developments in ECFuture Developments in EC
Enterprise E-Portals E-Commerce systems and legacy systems focus
on transactions, Auctions focus on bringing together buyers and
sellers Operational systems track orders and inventory. E-Portals tie together all of these disparate
systems Enabling the flow of information to employees,
customers and partners
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PreviousKelly Burke
University of Hawaii at Hilo
Future Developments in ECFuture Developments in EC
Wireless / Mobile Web Access Technologies
• handhelds (e.g., http://www.palm.com/) Applications
• CRM, commerce Implications
• customer may shop your physical store, see long lines, order online for delivery to home (another state?)
• have to cross market EC capability (e.g., in store marketing)