Lesson Three

General Comments on Harrah’s Discuss Ben and Jerry’s Chapters 5 and 6 Review Mid Term Time for Group Project

WHAT’S REPLACING THE DAY AFTER THANKSGIVING FOR SHOPPING SALES?

Black Friday is traditionally a big day for retailers

It’s when Christmas shoppers spend a lot of money, moving retailers out of the red and into the black

But Black Friday may soon be replaced by Cyber Monday

Cyber Monday is the Monday after Thanksgiving when people go back to work and buy products online

B2B E-Commerce

Business to Business (B2B) e-commerce – when a business sells products and services to customers who are primarily other businesses Where all the e-commerce money is Basically, it’s about businesses doing business

with other businesses Supply chain management (from Chapter 2) is

a big part of B2B e-commerce

B2C E-Commerce

Business to Consumer (B2C) e-commerce – when a business sells products and services to customers who are primarily individuals B2C is the glitzy e-commerce like iTunes,

eBay, etc B2C is a primary focus of the later sections in

this chapter

C2B E-Commerce

Consumer to Business (C2B) e-commerce – when an individual sells products and services to a business True economic inversion of the B2C model Fotolia is a good example (www.fotolia.com) There you can post photos and videos and businesses

will pay you a royalty to use them (if they like what you offer)

You can also advertise businesses on your personal Web site (called an affiliate program) and receive monies for visitors who jump from your site to the business’ Web sites

C2C E-Commerce

Consumer to Consumer (C2C) e-commerce – when an individual sells products and services to another individual. You selling to another person (or the reverse) Usually occurs through an intermediary such as

eBay

B2G E-Commerce

Business to Government (B2G) e-commerce – when a business sells products and services to a government entity. Lockheed providing products and services to

DoD Fairly large e-commerce model in terms of

revenue Most U.S. government entities (for sure at the

federal level) won’t do business with your business if you can’t do it electronically

G2C E-Commerce

Government to Consumer (G2C) e-commerce – e-commerce activities performed between a government and its citizens Does not fit well at all within the traditional

supply-and-demand e-commerce notion Paying taxes, registering vehicles, etc

Examples:

www.amazon.com www.kayak.com www.alibaba.com www.ebay.com www.crowdspring.com www.topcoder.com www.threadless.com www.mystarbucksidea.com www.groupon.com www.woot.com www.krn.com

B2B: Horizontal Versus Vertical

B2B e-commerce takes advantage of e-marketplaces

Electronic marketplace (e-marketplace) – interactive business providing a central market where multiple buyers and sellers can engage in e-commerce Horizontal e-marketplaces Vertical e-marketplaces

B2C Marketing Mix Tools

SEO/SEM Online ads Viral marketing Affiliate programs Social Media

Affiliate Programs

B2C Payment Systems

Credit cards Financial cybermediaries Electronic checks Electronic Bill Presentment and Payment Smart cards

Financial Cybermediaries

Financial cybermediary – Internet-based company that makes it easy for one person to pay another person or organization over the Internet PayPal (www.paypal.com) is the most well-

known

Financial Cybermediaries

Security: The Pervading Concern

Security is very important when moving money

Some security measures… Encryption Secure Sockets Layers Secure Electronic Transactions Many, many others

Encryption

Encryption – scrambles the contents of a file so that you can’t read it without having the right decryption key

Often through public key encryption (PKE) – uses two keys: a public key for everyone and private key for only the recipient of the encrypted information

Public Key Encryption

Secure Sockets Layers

Secure Sockets Layer (SSL)… Creates a secure connection between a Web

client and server Encrypts the information Sends the information over the Internet

Denoted by lock icon on browser or https:// (notice the “s”)

Secure Sockets Layers

The “s” in https and the padlock

Secure Electronic Transactions

Secure Electronic Transaction (SET) – transmission method that ensures transactions are legitimate as well as secure Helps verify use of a credit card, for example,

by sending the transaction to the credit issuer as well as the seller/supplier

E-Business Trend – M-Commerce

Class-show iphone

E-Business Trend – Long Tail

Long Tail – first offered by Chris Anderson; explains e-commerce profitability in terms of a sales curve

Brick-and-mortar businesses carry limited inventory, inventory that is popular

E-businesses can carry huge amounts of “niche” inventory that may only sell a couple of times a year

E-Business Trend – Long Tail

Old Style Software Development

Phase 1: Planning

Sample Project Plan

Phase 2: Analysis

Two primary analysis activities:1. Gather the business requirements

Business requirements - the detailed set of knowledge worker requests that the system must meet in order to be successful

Business requirements address the “why” and “what” of your development activities

Joint application development (JAD) - knowledge workers and IT specialists meet, sometimes for several days, to define or review the business requirements for the system

Phase 2: Analysis

2. Prioritize the requirements Requirements definition document – prioritizes

the business requirements and places them in a formal comprehensive document

Again, you probably can’t do everything, so prioritizing is important

Users sign off on this document which clearly sets the scope for the project

Phase 2: Analysis

Take time during analysis to get the business requirements correct. If you find errors, fix them immediately. The cost to fix an error in the early stages of the SDLC is relatively small. In later stages, the cost is huge.

Phase 3: Design

Design phase - build a technical blueprint of how the proposed system will work

Two primary design activities:1. Design the technical architecture

Technical architecture - defines the hardware, software, and telecommunications equipment required to run the system

Phase 4: Development

Development phase - take all of your detailed design documents from the design phase and transform them into an actual system

Two primary development activities:1. Build the technical architecture

2. Build the database and programs Both of these activities are mostly performed by IT

specialists

Phase 5: Testing

Testing phase - verifies that the system works and meets all of the business requirements defined in the analysis phase

Two primary testing activities:1. Write the test conditions

Test conditions - the detailed steps the system must perform along with the expected results of each step

Component-Based Development Methodologies Rapid application development (RAD) Extreme programming (XP) Agile methodology

Rapid Application Development (RAD)

Rapid application development (RAD) (also called rapid prototyping) - emphasizes extensive user involvement in the rapid and evolutionary construction of working prototypes of a system to accelerate the systems development process

Prototypes are models of the software components The development team continually designs,

develops, and tests the component prototypes until they are finished

Rapid Application Development (RAD)

Build new software

components

Use already-existing software

components

Extreme Programming (XP)

Extreme programming (XP) - breaks a project into tiny phases and developers cannot continue on to the next phase until the first phase is complete

Agile Methodology

Agile methodology - a form of XP, aims for customer satisfaction through early and continuous delivery of useful software components

PROTOTYPING

Prototype – a model of a proposed product, service, or system

Prototyping - the process of building a model that demonstrates the features of a proposed product, service, or system Proof-of-concept prototype - used to prove

the technical feasibility of a proposed system Selling prototype - used to convince people of

the worth of a proposed system

The Prototyping Process

The prototyping process involves four steps:1. Identify basic requirements

2. Develop initial prototype

3. User review

4. Revise and enhance the prototype

The Prototyping Process

Advantages of Prototyping

Encourages active user participation  Helps resolve discrepancies among users Gives users a feel for the final system Helps determine technical feasibility  Helps sell the idea of a proposed system

Disadvantages of Prototyping

Leads people to believe the final system will follow

Gives no indication of performance under operational conditions

Leads the project team to forgo proper testing and documentation

OUTSOURCING

Outsourcing – the delegation of specified work to a third party for a specified length of time, at a specified cost, and at a specified level of service

The third “who” option of systems development, after insourcing and selfsourcing

OUTSOURCING

The main reasons behind the rapid growth of the outsourcing industry include the following: Globalization The Internet Growing economy and low unemployment rate Technology Deregulation

Outsourcing – RFP

Request for proposal (RFP) – formal document that describes in excruciating detail your logical requirements for a proposed system and invites outsourcing organizations (vendors) to submit bids for its development

In outsourcing, you must tell another organization what you want developed; you do that with an RFP

Therefore, the RFP must be very detailed and complete

Some RFPs can take months or even years to develop

Outsourcing – SLA

Service level agreement (SLA) - formal contractually obligated agreement between two parties

In outsourcing, it is the legal agreement between you and the vendor and specifically identifies what the vendor is going to do (and by when) and how much you’re going to pay

Supporting SLA documents – service level specifications and service level objectives – contain very detailed numbers and metrics

Offshore Outsourcing

Primary outsourcing countries are: India China Eastern Europe (including Russia) Ireland Israel Philippines

The Advantages and Disadvantages of Outsourcing Advantages:

Focus on unique core competencies Exploit the intellect of another organization Better predict future costs Acquire leading-edge technology Reduce costs Improve performance accountability

The Advantages and Disadvantages of Outsourcing Disadvantages:

Reduces technical know-how for future innovation

Reduces degree of control Increases vulnerability of your strategic

information Increases dependency on other organizations