Electronic Commerce Software

Electronic Commerce Ninth Edition
Chapter 9 Electronic Commerce Software
Learning Objectives
In this chapter, you will learn about: Finding and evaluating Web-hosting services Basic functions of electronic commerce software Advanced functions of electronic commerce software
Electronic Commerce, Ninth Edition
Learning Objectives (contd.)

Electronic commerce software for small and midsize businesses Electronic commerce software for midsize to large businesses Electronic commerce software for large businesses that have an existing information technology infrastructure
Web Hosting Alternatives

Self-hosting
Running servers in-house Most often used by large companies
Third-party Web-hosting service providers

Offer Web services, electronic commerce functions Often used by midsize, smaller companies
Commerce service providers (CSPs)

Provide Internet access and Web-hosting services Help companies conduct electronic commerce
Electronic Commerce, Ninth Edition 4
Web Hosting Alternatives (contd.)

Commerce service providers (contd.)
Offer Web server management and rent application software Managed service providers (MSPs) Application service providers (ASPs)
Service provider hosting arrangements

Shared hosting
Client's Web site on a server hosting other Web sites simultaneously Operated by the service provider at its location

Service provider hosting arrangements (contd.)
Dedicated hosting
Client Web server not shared with other clients
Service provider responsibilities

Owns server hardware, leases hardware to client Maintains Web server hardware, software Provides Internet connection

Service provider hosting arrangements (contd.)
Co-location service
Service provider rents physical space to client Provides reliable power supply, Internet connection Clients install server hardware and software; maintain server
Finding service providers

Local telephone directory Web directories
The List, Google Directory of Web Host Directories

Web server-hosting decisions
Ensure hardware platform and software combination:
Upgradable when sites Web traffic increases
Web server requirements

Directly related to site electronic commerce transaction volume and Web traffic
Scalable hardware and software combinations

Adaptable to meet changing requirements when clients needs grow
Basic Functions of Electronic Commerce Software

Software and hardware products for building sites
Externally hosted stores with software tools Sophisticated electronic commerce software suites
Electronic commerce software needs determined by:

Expected enterprise size Projected traffic and sales Budget
Consider online store creation costs versus brick and mortar costs Consider external or in-house host costs
Basic Functions of Electronic Commerce Software (contd.)

All electronic commerce solutions must provide:
Catalog display Shopping cart capabilities Transaction processing
Larger complex sites may include:

Software adding features and capabilities to basic commerce tool set
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Catalog Display
Catalog organizes goods and services being sold
Organizes offerings into departments Web store advantage
Single product may appear in multiple categories
Catalog: listing of goods and services Static catalog: simple list written in HTML
On Web page or series of Web pages
Dynamic catalog: stores item information in a database

Catalog Display (contd.)

Large, well-known electronic commerce sites
Include many features; professional looking Use dynamic catalog aides and tools
Small online stores

Require simple products or categories list Item organization not important Can provide item photos with links Use a static catalog
Good sites provide alternative ways to find products

Search engine
FIGURE 9-2 Small electronic commerce site

Shopping Cart
Electronic commerce early days
Used forms-based shopping
Shoppers selected items by filling out online forms Awkward if ordering more than one or two items
Problems
Need to write down product codes, unit prices, other information before ordering Customers forgot whether submit button clicked
Confusing and error prone
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FIGURE 9-3 Using a form to enter an order

Shopping Cart (contd.)

Electronic shopping carts
Now the standard method for processing sales Keep track of items customer selected May view cart contents, add items, remove items Ordering requires a simple click
Item details stored automatically in cart
Button click executes the purchase transaction

Screen asks for billing and shipping information
Shopping cart software

BIZNET Internet Services, SalesCart, WebGenie Software
FIGURE 9-4 Typical shopping cart page

FIGURE 9-5 SalesCart shopping cart software page

Shopping Cart (contd.)

Web: stateless system
Unable to remember anything from one transmission or session to another
To retrieve shopping cart information later:

Use cookies
Allows information to be stored explicitly Allows unique user identification
If browser does not allow cookie storage:

Electronic commerce software automatically assigns temporary number Example: ShopSite
Transaction Processing
Transaction processing: occurs when shopper proceeds to virtual checkout counter
Click checkout button
Electronic commerce software performs necessary calculations Web browser software and sellers Web server software switch into secure communication state
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FIGURE 9-6 Basic electronic commerce Web site architecture
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Transaction Processing (contd.)

Most companies use accounting software package
Records sales and inventory movements Requires integration with accounting software
Web sites use software to update tax rates FedEx and UPS shipping rate software integrates with e-commerce software Other calculations
Coupons, special promotions, time-sensitive offers
Large companies
Integration may be complex
Advanced Functions of Electronic Commerce Software

Section topic
Electronic commerce software features
Needed in large companies
Most large companies have:

Electronic commerce operations Substantial business activity
Not related to electronic commerce
Important to integrate
Electronic commerce activities into the companys other operations
Basic element: collection of databases

Databases
Database
Collection of information
Stored on a computer in a highly structured way
Business rules
How the company does business
Database manager (database management software)

Makes it easy for users to:
Enter, edit, update, retrieve information in the database
Examples: Microsoft Access, IBM DB2, Microsoft SQL Server, Oracle

Databases (contd.)
Distributed information systems
Large information systems storing data in many different physical locations
Distributed database systems

Databases within distributed information systems
Complexity leads to high cost MySQL database software

Maintained by community of programmers Open-source software Owned by Sun since 2008
Databases (contd.)
Determine database support level
Provided by any electronic commerce software
Better to have one database serving two sales functions (online and in-store retail)
Eliminates errors occurring when running parallel but distinct databases
If inventory and product databases exist:

Only consider electronic commerce software supporting these systems
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Middleware
Middleware software
Takes sales and inventory shipments information from electronic commerce software
Transmits to accounting and inventory management software
Companies can write own middleware Companies can purchase customized middleware Interoperability
Making information systems work together Important goal when installing middleware
Middleware (contd.)
Middleware cost range
$50,000 to several million dollars
Depending on complexity
Major middleware vendors

BEA Systems, Broadvision, Digital River, IBM Tivoli Systems
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Enterprise Application Integration

Application program (application software, application)
Program performing specific function
Application server (computer)

Takes request messages received by Web server
Runs application program performing action based on request messages contents Actions determined by business logic
Business logic
Rules used in the business
Enterprise Application Integration (contd.)

Application integration (enterprise application integration)
Creation of links among scattered applications Interconnects organizations business logic Accomplished by programs transferring information:
From one application to another
Various program data formats differ

Must edit and reformat data Increasingly using XML data feeds
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Types of application servers
Page-based and component-based systems
Page-based application systems

Return pages generated by scripts containing rules
Present data on Web page with the business logic
Examples for small, midsized Web sites

Adobe ColdFusion JavaServer Pages (JSP) Microsoft Active Server Pages (ASP) Hypertext Preprocessor (PHP)
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Component-based application system
Separates presentation logic from business logic Preferred by larger businesses Logic component created and maintained separately
Updating, changing system elements much easier
Common Web component-based systems

Enterprise JavaBeans (EJBs) Microsoft Component Object Model (COM) Common Object Request Broker Architecture (CORBA)
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Integration with ERP Systems

Enterprise resource planning (ERP) software packages
Business systems integrating all facets of a business
Accounting, logistics, manufacturing, marketing, planning, project management, treasury functions
Two major ERP vendors: Oracle and SAP ERP software installation costs
Between $2 million and $25 million
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FIGURE 9-7 ERP system integration with EDI

Web Services
Web services
Software systems supporting interoperable machineto-machine interaction over a network Set of software and technologies allowing computers to use the Web to interact with each other directly
Without humans directing the specific interactions
Application program interface (API)

General name for the ways programs interconnect with each other
Web APIs: interaction over the Web

Web Services (contd.)

What Web services can do
Offer improved customer service, reduced costs Transmit XML-tagged data
From one enterprise integrated application to another
Provide data feeds between two different companies
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How Web services work
Key element
Programmers write software accessing business application logic units without knowing details
Machine-to-machine communication
Allows programs written in different languages on different platforms to communicate, accomplish transaction processing, and perform other business tasks Originally accomplished with HTML Implemented with XML today

How Web services work (contd.)
First Web services
Information sources Incorporate information sources into software applications
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How Web services work (contd.)
More advanced example
Web services purchasing software used to obtain vendor price information Purchasing agent authorizes purchase using software to submit order, track until shipment received Vendor's Web services software checks buyers credit, contracts with freight company
39

SOAP specifications Simple Object Access Protocol (SOAP)
Message-passing protocol defining how to send marked up data from one software application to another across a network
SOAP protocol utilizes three rule sets

Communication rules
Included in the SOAP protocol Full SOAP specification: W3C SOAP Page
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SOAP rule sets (contd.)
Web Services Description Language (WSDL)
Describes logical units characteristics making up specific Web services Used to modify an application program so it can connect to a Web service Allows programs to configure themselves so they can connect to multiple Web services More information: W3C Web Services Activity pages
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SOAP rule sets (contd.)
Universal Description, Discovery, and Integration Specification (UDDI)
Set of protocols identifying Web services locations and associated WSDL descriptions Used by programmers to find the Web services location before interpreting their characteristics (described in WSDL) or communicating with them (using SOAP) More information: UDDI Web site
42

SOAP application data
Stored and transmitted in XML format Data-providing and data-using partners
Must agree on which XML implementation to use
SOAP-based Web services

Often include quality of service and service level specifications Web services subscriber
Must work out a detailed agreement with each Web services provider
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SOAP protocol set
First widely used approach implementing Web services Only about 20 percent of Web services today use SOAP
Leader in Web services implementations

REST and RESTful design
Discussed next
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REST and RESTful design Representational State Transfer (REST)
Principle describing how the Web uses networking architecture to identify and locate Web pages
And elements making up those Web pages
RESTful design
Web services built on the REST model Sometimes called RESTful applications
Transfers structured information from one Web location to another

Atom Publishing Protocol
Most widely used RESTful application Blogging application simplifying blog publishing process
Making its functions available as a Web service Allowing other computers to interact with blog content
More information
RestWiki site ProgrammableWeb site
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Electronic Commerce Software for Small and Midsize Companies

Section topics
Learn how small and medium-sized businesses use software to implement online business Web sites
Web site created

Stands alone in its business activities Does not coordinate completely with business other activities
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Basic Commerce Service Providers

Use of service providers shared or dedicated hosting services
Shifts staffing burden from company to Web host
CSPs hosting services advantages

Same as ISPs Spread large Web site costs over several renters hosted by the service
Reason for low cost

Host provider purchases and configures the server
Host provider keeps server working through storms and power outages
Basic Commerce Service Providers (contd.)

CSPs offer free or low-cost e-commerce software
Electronic commerce sites kept on CSPs server Cost: less than $20 per month Software built into CSPs site Designed for small online businesses:
Selling few items (no more than 50) Incurring relatively low transaction volumes (fewer than 20 transactions per day)
Examples:
ValueWeb, ProHosting.com, 1&1 Internet, Yahoo!
FIGURE 9-8 Yahoo! Merchant Services page

Mall-Style Commerce Service Providers

Provide small businesses with:
Internet connection, Web site creation tools Little or no banner advertising clutter
Charges
Low monthly fee One-time setup fees Percentage of (or fixed) amount for each transaction
51
Mall-Style Commerce Service Providers (contd.)

Provides:
Online store design tools and storefront templates Easy-to-use interface Web page-generation capabilities Page maintenance Shopping cart software capabilities Payment processing services
Main mall-style CSP: eBay stores

Cost: less than $20 per month Each small merchant has its own store

Another example: sell through Amazon.com
Individual sells certain used items
On the same page Amazon.com lists the new product
Merchants display offerings product by product

Mixed in with all other Amazon.com items
Basic and mall-style CSPs provide data-mining capabilities
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Data mining
Helps businesses find customers with common interests Helps discover previously unknown relationships among data Provides reports indicating:
Problematic Web pages in stores design Number of pages average customer must load and display before locating desired merchandise
54
Estimating Operating Expenses for a Small Web Business
FIGURE 9-9 Approximate costs to put a small store online
55
Estimating Operating Expenses for a Small Web Business (contd.)

Estimated costs for self-hosting a Web site
Setup and Web site maintenance
$3000 to $20,000 (one time)
High-bandwidth Internet connection

$600 and $12,000 per year
Secure server room: $5000 a year Technicians to monitor and maintain equipment
$50,000 to $100,000 annually
Annual total costs: $60,000 to $100,000
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Estimating Operating Expenses for a Small Web Business (contd.)

Costs of larger sites: more difficult to estimate
Largest element
Integrating Web site with existing systems
Midsize businesses: start-up costs

$100,000 to $500,000 Recurring annual costs: about half that amount
Large businesses: start-up costs

$1 million and $50 million 50 percent of the launch cost every year to operate, maintain, and improve the site
Electronic Commerce Software for Midsize to Large Businesses

Section topics
Discuss software for implementing Web site electronic commerce features Provide an outline of Web site development tools Provide an overview of three specific midrange electronic commerce software products
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Web Site Development Tools

Possible to use Web page creation and site management tools from Chapter 2 After Web site creation:
Add purchased software elements and content management software Create the middleware
Buying and using midrange e-commerce software

More expensive than using a CSP
$2000 to $50,000
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Web Site Development Tools (contd.)

Midrange software traditionally offers connectivity to database systems
Store catalog information Connections into existing inventory and ERP systems
Three midrange electronic commerce systems

Intershop Enfinity WebSphere Commerce Suite by IBM Commerce Server by Microsoft
60

Intershop Enfinity
Search and catalog capabilities and electronic shopping carts Online credit card transaction processing Ability to connect to existing back-end business systems and databases Setup wizards and good catalog and data management tools Built-in storefront templates Web browser management and editing of a storefront

Intershop Enfinity (contd.)
Product inventory management module
Tracks inventory levels, shows available item quantity Creates inventory transactions lists Enters new products into inventory
Discount rules easy to enter Database management system bundled

Alternative databases: IBM DB2 or Oracle databases
Includes automated e-mail facility Supports secure transactions Site and customer reports available

IBM WebSphere Commerce Professional
Set of software components Includes:
Catalog templates, setup wizards, advanced catalog tools
Useful for B2B and B2C applications Provides smooth connection to existing corporate systems
Inventory databases, procurement systems
Runs on many different operating systems


IBM WebSphere Commerce Professional (contd.)
Wizard used to create starter store Large collection of functions, utility programs, commands
Create customized online store experience Requires JavaScript, Java, C++ expertise
Connects to existing databases, other legacy systems

Through DB2 or Oracle databases
Can administer several stores through interface
64

IBM WebSphere Commerce Professional (contd.)
Standard electronic commerce features
Shopping cart tools E-mail notifications upon sale completion Secure transaction support Promotions and discounting Shipment tracking Links to legacy accounting systems Browser-based local and remote administration
Costs: between $100,000 and $200,000


Microsoft Commerce Server
Tools included for:
User profiling and management Transaction processing Product and service management Target audience marketing
Wizards help users build site in several steps Program code required for specific user needs Bundled with Microsoft Visual Studio .NET tools
Allows site customization

Microsoft Commerce Server (contd.)
Provides customer-oriented tools to:
Engage customer (marketing and advertising) Complete order Analyze sales information
Includes:
Predefined reports and storefront templates Wizards for setting up and initializing store Ability for database connections Shopping cart
67

Microsoft Commerce Server (contd.)
Includes: (contd.)
E-mail confirmation for completed sales transactions Ability to support secure transactions Ability to connect to existing accounting systems Site administration through Web browser
Runs on Windows Server operating system and SQL Server database system Costs: between $7100 and $21,000 per processor
Typical installation: between $50,000 and $300,000
Electronic Commerce Software for Large Businesses

Larger business requirements:
Same advanced capabilities as midsize firms Ability to handle higher transaction loads Dedicated software applications
Handling specific online business elements
Distinction between midrange and large-scale electronic commerce software

Price Extensive support for business-to-business commerce
Electronic Commerce Software for Large Businesses (contd.)

Enterprise-class software
Commerce software for large-scale systems
Enterprise
Describes system serving multiple locations of one company Encompasses all areas of the business or enterprise
Software provides tools for B2B and B2C commerce Interacts with wide variety of existing systems
Database, accounting, ERP
Costs: $100,000 to $10 million

Enterprise-Class Electronic Commerce Software

Requirements
Several dedicated computers, Web server system, firewalls
Enterprise-class product examples

IBM WebSphere Commerce Enterprise, Oracle EBusiness Suite, Broadvision products
Provides tools for linking to and supporting supply, purchasing activities
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Enterprise-Class Electronic Commerce Software (contd.)

Provides standard electronic commerce activities
Secure transaction processing and fulfillment Interaction with firms inventory system Making proper stock adjustment Issuing purchase orders for needed supplies Generating other accounting entries
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Enterprise-Class Electronic Commerce Software (contd.)

B2C situations
Customers use Web browsers to locate and browse companys catalog Electronic goods downloaded directly Forms completed online: hard-copy versions of the products shipped Web server linked to back-end systems Merchant server houses the e-business system and key back-end software
Processes payments, computes shipping and taxes, and sends a message to the fulfillment department
FIGURE 9-10 Typical enterprise-class electronic commerce architecture

Customer Relationship Management Software

Goal
Understand each customers specific needs Customize product or service to meet those needs
Idea
If customer needs met exactly
Customer will pay more for goods or services
Customer relationship management (CRM) software

Obtains data from operations software Gathers data about customer activities Uses data to conduct analytical activities
Customer Relationship Management Software (contd.)

Basic form of CRM
Uses customer information to sell more goods or services
Advanced form of CRM

Delivers extremely attractive, positive customer experiences
CRM business importance

Maintaining customer loyalty Maintaining positive, consistent contacts at the purchasing company

CRM software source
Companies create their own
May use outside consultants and own IT staffs
Most companies likely to buy CRM software package Oracle Siebel CRM Applications
Leading CRM software provider
SAP CRM: another vendor Costs: $25,000 to millions of dollars
77

New developments in CRM software market
Companies offering software for use on their Web site
Advantage: buyer does not have to install CRM software on its own servers Example: Salesforce.com
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FIGURE 9-11 Salesforce.com home page


1996 to 2000
Early days of CRM software implementation Tool for identifying changing customer preferences and responding quickly to those changes
Hoped to gain sales and reduce marketing costs
Bad experience with millions of dollars spent
CRM software sales dropped Companies learned from the bad experience
CRM used to solve smaller, more specific problems Popular target: call center operations
Supply Chain Management Software

Supply chain management (SCM) software
Helps companies coordinate planning and operations with industry partners
Two general function types: planning and execution SCM planning software
Develops coordinated demand forecasts
Uses information from each supply chain participant
SCM execution software

Helps with warehouse and transportation management
Supply Chain Management Software (contd.)

Two major firms offering SCM software
i2 Technologies and JDA Software
i2 Technologies product: RHYTHM

Manages demand planning, supply planning, demand fulfillment
Most supply chain management software

Developed for manufacturing firms
Manage inventory purchases, manufacturing processes
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Supply Chain Management Software (contd.)

JDA Software
Originally managed retail order entry and sales side of inventory control 2006 Manugistics purchase
Allows software offerings for every operation in the supply chain
Cost of SCM software implementations

Varies tremendously
Depends on number of locations in the supply chain
Example: retailer with 500 stores

$3 million and $10 million
Content Management Software

Content management software
Controls large amounts of text, graphics, media files
Importance heightened due to:

Increased use of smart phones, netbook computers, pad computing devices
E-commerce software
May come with wizards and other automated helpers for creating template-driven pages
Businesses often customize Web pages with company and product pictures and text
Content Management Software (contd.)

Content management software should be tested before commitment
Ensure straightforward software procedures for performing regular maintenance Ensure software facilitates typical content creation tasks
Companies needing many different ways to access corporate information

Use content management software
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Content Management Software (contd.)

IBM and Oracle
Provide software as components in other enterprise software packages
EMC and Open Text Corporation

Provide stand-alone content management software
Software costs
Between $100,000 and $500,000
Customization, configuration, implementation costs

May add three or four times the cost of software
Knowledge Management Software

Knowledge management (KM) software
Systems managing knowledge itself
Rather than documentary representations of that knowledge
Four main tasks

Collect and organize information Share information among users Enhance ability of users to collaborate Preserve knowledge gained through information use
For future users benefit
Knowledge Management Software (contd.)

Includes tools to read:
Electronic documents, scanned paper documents, email messages, Web pages
Includes powerful search tools

Use proprietary semantic, statistical algorithms
Collects knowledge elements by extracting them from normal interactions users have with information Major software vendors: IBM, Microsoft SharePoint, BMC Software, CustomerVision Costs: $10,000 to $1 million or more
Summary
E-commerce considerations for different size businesses Software functions, selection decisions Host provider considerations
Electronic commerce software has several key elements Web services implementations
Basic CSP and mall-style hosting services Electronic commerce software packages
Midsize and larger businesses need customizable systems with flexibility

May include CRM, SCM, and others

Electronic Commerce Software

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Electronic Commerce Ninth Edition

Chapter 9 Electronic Commerce Software

Electronic Commerce, Ninth Edition

Learning Objectives (contd.)

Electronic Commerce, Ninth Edition

Web Hosting Alternatives

Third-party Web-hosting service providers

Commerce service providers (CSPs)

Web Hosting Alternatives (contd.)

Service provider hosting arrangements

Web Hosting Alternatives (contd.)

Service provider responsibilities

Electronic Commerce, Ninth Edition

Web Hosting Alternatives (contd.)

Finding service providers

Web Hosting Alternatives (contd.)

Web server requirements

Scalable hardware and software combinations

Electronic Commerce, Ninth Edition

Basic Functions of Electronic Commerce Software