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Chapter 12

Building E-Commerce Applications

and Infrastructure

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Learning Objectives

Discuss the major steps in developing an EC applicationDescribe the major EC applications and list their major functionalitiesList the major EC application development options along with their benefits and limitationsDescribe various EC application outsourcing optionsDiscuss the major components of an electronic catalog and EC application suite

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Learning Objectives (cont.)

Describe various methods for connecting an EC application to backend systems and databasesDescribe the criteria used in selecting an outsourcing vendor and packageUnderstand the value and uses of EC application log filesDiscuss the importance and difficulties of EC application maintenance

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Tracking United Parcel Service (UPS) Shipments

The ProblemUPS has provided the means for customers to track their shipments to determine the status and whereabouts of a particular package for some time this was accomplished over the telephone

Customers would call UPS with the tracking number Operator would look up the status of the shipment and relay the information to the customerServicing cost about $2 per call

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Tracking United Parcel Service (UPS) Shipments (cont.)

The SolutionUPS created a Web site (ups.com) in 1996-97 that enabled customers to:

Track their shipments onlineDetermine the cost and transit time for delivery of a packageSchedule a package for pickupLocate the nearest drop-off facility

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Tracking United Parcel Service (UPS) Shipments (cont.)

The ResultsUPS site services over 4 million online tracking requests per day Also offers:

Option of tracking their packages through wireless devices A set of e-commerce solutions and a technology infrastructure that enables other companies to incorporate UPS’ online order entry, shipping, and tracking capabilities E-commerce tools and services for managing a an enterprises’ overall supply chain

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Landscape and Framework of EC Application Development

Development processStep 1: EC architecture creation plan includes:

Business goals and vision for the siteInformation and data required to fulfill the goals and visionApplication modules that will deliver and manage the information and dataSpecific hardware and software on which the application modules will run, Human resources and procedures for implementing the architecture

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Landscape and Framework of EC Application Development (cont.)

Step 2: Select a development option—developed in-house, outsourced to another party, or some combination of bothStep 3: Installing, testing, and deploying

Unit testing—testing application software modules one at a timeIntegration testing—testing the combination of application modules acting in concert Usability testing –testing quality of the user’s experience when interacting with a Web siteAcceptance testing—determining whether a Web site meets the original business objectives and vision

Step 4: Operation and maintenance—should be continually updated

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Major EC Applicationsand Their Functionalities

A storefront should offer buyers the means to:

Discover, search, evaluate, and compare productsSelect product ad negotiate pricePlace an order using a shopping cartPayment of purchase usually on creditOrder confirmationTrack orders once they are shipped

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Major EC Applicationsand Their Functionalities (cont.)

Merchant’s needs to:Provide access to personalized catalogsProvide electronic shopping cartVerify customer credit and approve purchasesProcess the orders (back-end services)Arrange for product deliveryTrack shipments to make sure they are deliveredProvide the means for buyers and visitors to register, make comments, or request additional information

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Major EC Applicationsand Their Functionalities (cont.)

Merchants (cont.)Answer customers’ questionsAnalyze purchases in order to customize buyers’ experiencesProvide Web-based post-sale supportCreate the capability for cross-sell and up-sellProvide language translation if neededMeasure and analyze the traffic at the site

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Major EC Applicationsand Their Functionalities (cont.)

A storefront must contain three interrelated subsystems:

1. Merchant system or storefront that provides the merchant’s catalog and shopping cart

2. Transaction system for processing orders, payments, and other aspects of the transaction

3. Payment gateway that routes payments through existing financial systems

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Major EC Applicationsand Their Functionalities (cont.)

Supplier sell-side site:Personalized catalogs and Web pages for all major buyersB2B payment gateElectronic contract negotiation featuresProduct configuration by customersAffiliate program capabilitiesBusiness alerts

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Major EC Applicationsand Their Functionalities (cont.)

ProcurementE-procurement site is an online intermediary that offers businesses access to hundreds of parts and services provided by suppliers

Catalog Management Collaborative Planning On-line Purchase Purchase Order Handling Document Service Historical Performance Service Information Service System Administration

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Major EC Applicationsand Their Functionalities (cont.)

Aggregating catalogsSearch engine for locating items with particular characteristicsComparison engine for alternative vendorsOrdering mechanismBudget and authorization featureUsage comparisons (among various departments)Payment mechanism (e.g., use of a purchasing card)

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Major EC Applicationsand Their Functionalities (cont.)

Reverse auctionsCatalog of items to be tendered and their content managementSearch enginePersonalized pages for potential large biddersReverse auction mechanismFacility to help prepare, issue, manage, and respond to a buyer’s requests for quotes (RFQs)Ability to bid dynamicallyAutomatic vendor approval and workflow

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Major EC Applicationsand Their Functionalities (cont.)

Reverse auctions (cont.)Electronic collaboration with trading partnersStandardization of RFQ writingA site mapA mechanism for selecting suppliers to participateAutomatic matching of suppliers with RFQsAutomatic business process workflowAbility for bidders to use m-commerce for biddingAutomated language translation

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Major EC Applicationsand Their Functionalities (cont.)

ExchangesCollaboration servicesCommunity servicesWeb-automated workflowIntegrated business process solutionsCentral coordination of global logisticsIntegration services

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Major EC Applicationsand Their Functionalities (cont.)

Exchanges (cont.)Data mining, customized analysis and reporting, real-time transactions, trend and customer behavior trackingTransaction flow managersNegotiation mechanismsLanguage translationComprehensive links to related resources

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Development Options for EC Applications

Insourcing—in-house development of applications

Development approachesBuild from scratchBuild from components

Prototyping methodology

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Development Options forEC Applications (cont.)

AdvantagesAvailability of many off-the-shelf packagesSaves timeRequires few dedicated personnelCompany knows what it is gettingNot the first and only user of the software

DisadvantagesSoftware doesn’t exactly fit needsMay be difficult to modifyLoss of control over improvements and versionsDifficult to integrateVendors may drop product or go out of business

Buy the applications (turnkey approach)

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Development Options forEC Applications (cont.)

LeaseTypes of leasing vendors

Lease the application from an outsourcer and install it on company premisesUse an application system provider (ASP)

Application service provider (ASP) A company that provides business

applications to users, for a small monthly fee—go online to use the equipment and software that resides with the ASP

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Development Options forEC Applications (cont.)

Other development optionsE-marketplaces, exchanges, auctions, or reverse auctionsJoint ventures and consortiaInternet mallsISPsTelecommunications companiesSoftware houses

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Criteria for Selecting a Development Approach

Flexibility Information requirementsUser friendlinessHardware and software resourcesInstallationMaintenance servicesVendor quality and track record

Estimating costsMeasuring benefitsPersonnelTechnology evolutionScalingSizingPerformanceReliabilitySecurity

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Third-Party EC Components and Suites

Electronic catalogsVirtual-world equivalent of traditional product catalog, containing product descriptions and photos, along with information about various promotions, discounts, payment methods, and methods of delivery

Merchant server softwareElectronic catalog

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Third-Party EC Components and Suites (cont.)

Features of electronic catalogsTemplates or wizards for creating a storefront and catalog pagesElectronic shopping cartsWeb-based order forms for making secure purchasesA database for maintaining product descriptions, pricing, and customer ordersIntegration with third-party software for calculating taxes and shipping costs and for handling distribution and fulfillment

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Third-Party EC Components and Suites (cont.)

EC suite—combined set of tools giving builder and users:

Greater flexibilitySpecializationCustomizationIntegration Support for complete functionality

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EC Suites

Internetworld Commerce Suite

Channel marketingOrder managementAccount managementCustomer service

Websphere Commerce Suite

Order managementCollaborative filtersPortal capabilitiesMulticultural supportE-couponsAdditional bundled products

Catalog managerPayment manager

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Connecting to Databases and Other Enterprise Systems

Multi-tiered application architectureEC architecture consisting of four tiers

Web browser—data presented to and collected from the userWeb server—delivers Web pagesApplication server—executes business rulesDatabase server—data is stored, managed, and requests processed

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Connecting to Databases and Other Enterprise Systems (cont.)

Enterprise application integrationAims to integrate applications (including internal applications) that have been developed by different organizationsIf source code is unavailable (altering the application is not possible), EAI becomes the glue between the applications

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Vendor and Software Selection

Steps in selecting software package1. Identification potential vendors2. Determination the evaluation criteria3. Evaluate vendors and packages4. Choose a vendor and package5. Negotiate a contract6. Establish service level agreement

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Vendor and Software Selection (cont.)

Identification potential vendors; eliminate:

Too small vendorsVendors with questionable reputationsPackages without required featuresPackages that don’t fit with hardware, operating system, network, etc.

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Vendor and Software Selection (cont.)

Determination the evaluation criteriaCharacteristics of the vendorFunctional requirements of the systemTechnical requirements the software must satisfyAmount and quality of documentation providedVendor support of the package

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Vendor and Software Selection (cont.)

Evaluate vendors and packages determine the gaps between

Company’s needs as specified by the requirementsCapabilities of the vendors and their application packages

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Vendor and Software Selection (cont.)

Choose a vendor and packageAdditional development effort required to tailor the system to the company’s needs or to integrate it into the company’s environmentOpinions of users and IT personnel who will have to use and support the system

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Vendor and Software Selection (cont.)

Negotiate a contractSpecify price of softwareDetermines the type and amount of support to be provided by the vendor Use software purchasing specialists who assist in negotiations and write or approve the contract

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Vendor and Software Selection (cont.)

Establish service level agreementFormal agreements regarding the division of work between a company and its vendors

Define the partners’ responsibilitiesProvide framework for designing support servicesAllow company to retain as much control as possible over their own systems

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Usage Analysis and Site Management

Access logA record kept by a Web server of every time a user accesses the server; kept in a common log file format, each line of this text file details an individual access

Pageviews by time bucketPageviews by customer logging-in statusPageviews by referrerPageviews by visitor’s hardware platform, OS, browser and/or browser versionPageviews by visitor’s host

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Site Management andUsage Analysis (cont.)

E-commerce management tools from BMC Corp. at bmc.com

Patrol for e-business managementMeasures Web response timeFirewall administrationApplication servers:

Patrol for MicrosoftOpen marketNetscape

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Managerial Issues

What is our business perspective? Do we have a systematic development plan? Insource or outsource? How should we choose a vendor/software? Have we analyzed the data?

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Summary

Discuss the major steps in developing an EC applicationDescribe the major EC applications and list their major functionalitiesList the major EC application development options along with their benefits and limitationsDescribe various EC application outsourcing optionsDiscuss the major components of an electronic catalog and EC application suite

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Summary (cont.)

Describe various methods for connecting an EC application to backend systems and databasesDescribe the criteria used in selecting an outsourcing vendor and packageUnderstand the value and uses of EC application log filesDiscuss the importance and difficulties of EC application maintenance