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Information Technology Management
ITM 102
Shavin Malhotra

Chapter 1 Business Driven Information Systems 1.1 Information Systems' Role in Business Functional Organization - each functional area has its own systems and communicates with every other functional area. Information Systems Basics Information Systems (IS) - are computer based tools that people use to work with information and that support the information and information- processing needs of an organization. Information Technology (IT) - is the acquisition, processing, storage and dissemination of vocal, pictorial, textual, and numerical information by a micro electronics based combination of computing and telecommunications. Management Information Systems (MIS) - is the function that plans for, develops, implements, and maintains IT hardware, software, and applications that people use to support the goals of an organization. Data, Information, and Knowledge Data are raw facts that describe the characteristics of an object or event. Characteristics for a sales event could include the date, item number, item description, quantity ordered, customer name, and shipping details. Information is data converted into meaningful and useful context. Information from sales events could include best-selling item, worst-selling item, best customer, and worst customer Information becomes knowledge when information can be acted upon. In this sense, knowledge is "actionable information". Information systems can enable an organization to increase efficiency in manufacturing, retain key customers, seek out new sources of supply, and introduce effective financial management. Key Resources - people, processes, and information systems. If one of these fails, they all fail. They are all interconnected. Information Cultures Culture influences the way people use information (their information behavior) and reflects the importance that company leaders attribute to using information in achieving success or avoiding failure Information - Functional Culture: Employees use information as a means of exercising influence or power over others. Information - Sharing Culture: Employees across departments trust each other to use information ( especially about problems and failures) to improve performance. Information - Inquiring Culture: Employees across departments search for information to better understand the future and align themselves with current trends and new directions. Information - Discovery Culture: Employees across departments are open to new insights about crisis and radical changes and seek ways to create competitive advantages. Roles and Responsibilities in Information Systems Chief Information Officer (CIO) is an executive - level position that involves high-level strategic planning and management of information systems pertaining to the creation, storage, and use of information of a business. The CIO is responsible for overseeing all uses of information systems, and ensuing the strategic alignment of IS with Business goals and objectives. Chief Technology Officer (CTO) is responsible for ensuring the throughput, speed, accuracy, availability, and reliability of an organization's information technology. Chief Security Officer (CSO) is responsible for ensuring the security of information systems, and developing strategies and technical safeguards against attacks from hackers and viruses. Chief Privacy Officer (CPO) is responsible for ensuing the ethical and legal use of information within an organization. Chief Knowledge Officer (CKO) is responsible for collecting, maintaining and distributing an organization's knowledge. Business Priority of CIO 1. Increasing enterprise growth 2. Attracting and retaining new customers 3. Reducing enterprise costs 4. Creating new products and services (innovation) 5. Delivering operational results Skills required by IT Executives and what they really mean Skills What It Means Communication Ability to communicate and influence at all levels Business A need to understand and focus on how they can help their businesses Knowledge grow and not just look at cuing costs and being more efficient The vision that differentiates a CIO from a more traditional IT director- Innovation/Creativity innovation, creativity, flair, and entrepreneurial spirit Leadership Good leaders inspire and motivate their teams and drive them to achieve remarkable things A practical understanding of technology fundamentals in order to make the Domain Knowledge right strategic calls about the deployment and exploitation of IT. 1.2 Business Strategy Organizations must create a competitive advantage to survive and thrive in the business world. Competitive Advantage is a product or service that an organization's customers place a greater value on than similar offering from a competitor. Unfortunately, competitive advantages are only temporary as competition usually finds a way to duplicate and therefore, organizations must develop new strategies. When an organization is the first to market with a competitive advantage, it gains a first mover market. First-Mover Advantage occurs when an organization can significantly impact its market share by being first to market with a competitive advantage. As organizations develop their competitive advantages, they must pay close attention to their competition through environmental scanning. Environmental Scanning is the acquisition and analysis of events and trends in their environment external to an organization. Organizations use three common tools to analyze and develop competitive advantages. 1) Five Forces Model 2) Three Generic Strategies 3) Value Chain Analysis The Five Forces Model is a useful tool to aid organizations facing the challenging decision of entering an new industry or industry segment. It helps determine the relative attractiveness of an industry and includes: 1) Buyer Power 2) Supplier Power 3) Threat of substitute products or services 4) Threat of new entrants 5) Rivalry among existing competitors Buyer Power is high when buyers have many choices of whom to by from and low when their choices are few. There are two situations in the supply chain where organizations need to be concerned about buyer power. Supplier Power is high when buyers have few choices to buy from and low when they have many choices. There are two situations in the supply chain where organizations need to be concerned about supplier power. Threat of substitute Products or Services is high when there are many alternatives to a product or service and low when there are few alternatives from which to choose. If there are two many competitors in the market, organizations can create a competitive by switching costs. Switching Costs are costs that can make customers reluctant to switch to another product. Threat of New Entrants is high when it is easy for new competitors to enter a market and low when there are significant entry barriers to entering a market. Rivalry Among Existing Competitors is high when competition is fierce in a market and low when competition is more complacent. The Three Generic Strategies - Creating A Business Focus An organization can follow Porter's three generic strategies when entering a new market 1) Broad Cost Leadership 2) Broad Differentiation 3) Focused Strategy Broad Strategies reach a large audience; Focused strategies target a niche market. A focused strategy concentrates on either cost leadership or differentiation. Porter suggests that an organization is wise to adopt only one of the three generic strategies. Value Creation A business process is a standardized set of activities that accomplish a specific task, such as processing a customer's order. An organization creates value by performing a series of activities that Porter identified as the value chain. The Value Chain approach views an organization as a series of processes, each of which adds value to the product or service for each customer. Business-Driven Information Systems and Business Strategy The Three Generic Strategies are broad competitive approaches that organizations fall under. Knowing which approach you are following can help make informed decisions about how the company should compete with other firms. Value Chain Analysis is a systematic approach organizations use to assess and improve the value of their business activities. Knowing what value each activity offers a company can help an organization decide how to change or improve those activities and become more competitive. This is meant by Business-Driven Information Systems. These are implemented to support a company's competitive business strategy. Chapter 2 Decision Making and Business… 2.1 Decision Making and Information Systems Primary Reasons for Growth of Decision-Making Information Systems 1. People need to analyze large amounts of information - improvements and innovations in technology have resulted in a dramatic increase in the alternatives people need to consider when making a decision 2. People must make decisions quickly - time is valuable and people do not have enough of it to go through all information manually 3. People must apply sophisticated analysis techniques, such as modelling and forecasting to make good decisions - information systems reduce the time required to perform these analysis techniques 4. People must protect the corporate asset of organizational information - information systems offer security to ensure confidential information is safe An organization is similar to a pyramid with three different levels; each level requires different information and decisions to address challenges. Operational (bottom of the pyramid) Employees develop, control, and maintain core business activities required to run day-to-day operations. These decisions are structured decisions, which are made frequently, repetitive, and they affect short term business strategies. Managerial (middle of the pyramid) Employees are continuously evaluating company operations to ensure the organization is capable of identifying, adapting, and create change for company success. Managerial decisions cover short and medium range plans, schedules, budgets, policies, procedures and business objectives. These types of decisions are considered semi-structured decisions and they occur in situations in which a few established processes help evaluate potential solutions but not lead to a definite recommendation. Strategic (top of the pyramid) Managers develop overall business strategies, goals, and objectives, as part of the company's strategic plan. They monitor the strategic performance and overall direction in the political, economic, and business environment. These decisions are unstructured decisions, occurring when no procedures or rules exist to guide decision makers. They are infrequent, extremely important, and related to long term business strategy. Transactional Data and Analytical Information Transactional Data encompasses all the raw facts contained within a single business process or unit of work; primary purpose is to support performing daily operational tasks. Organizations use transactional data when performing operational tasks and routine decisions, such as analysing daily sales reports to determine how much inventory to carry Analytical Information encompasses all summarized or aggregated transactional data; primary purpose is to support performing analysis tasks. Analytical information also includes external information such as that obtained from outside market and industry sources. Two different types of processing occur in an organization related to transactional data and analytical information; online transaction processing and online analytical processing. Online Transaction Processing (OLTP) is the capturing of transaction and event data using information systems to (1) process the data according business rules, (2) store the data, (3) update existing data to reflect new data entered. Online Analytical Processing (OLAP) is the analysis of summarized or aggregated information retrieved from transaction processing systems data, and sometimes external information to create business intelligence. Business intelligence is a broad term describing information that people use to support their analytical and strategic decision making efforts. Consolidation, drill-down, and slice-and-dice are a few of the capabilities associated with OLAP. Consolidation involves the aggregation of information and features simple roll-ups to complex groupings of interrelated information. Drill-Down enables users to view details, and details of details, of information. Slice-and Dice is the ability to look at information from different perspectives. One slice of info could display all product sales while another slice could display sales of one particular item. Measuring Decision Success Key Performance Indicators (KPIs) are the measures that are tied to business that measure the organization's success through its operational years. Metrics are the detailed measures that feed those KPIs. These can include numbers including: gross profit, labour efficiency, cost, cycle time, etc. Efficiency and Effective metrics are two primary types of metrics. Efficiency IS Metrics measure the performance of the information system itself such as throughput, speed and availability. Effectiveness IS Metrics measure the impact IS has on business processes including customer satisfaction, conversation rates, and sell-through increases. Benchmarking - Baseline Metrics these are baseline values the system seeks to attain. Benchmarking is a process of continuously measuring system results, comparing those results to optimal system performance, identifying steps and procedures to improve system performance. TPS, DSS, AND EIS These are three major classes of information systems in organizations that provides the information to make decisions and measure performance. TPS (Transaction Processing System) is the basic business system that serves the operational level (clerks and analysts using a payroll system or an order-entry system) DSS (Decision Support System) models data and information to support managers, analysts, etc. for analytical purposes. These system can be used both on transactional data and analytical information. Three quantitative models often used by DSS include: 1. Sensitivity Analysis - the study of impact that changes one part of a model to another part. opp 2. What-If Analysis - checking the impact of a change in an assumption on the proposed solution 3. Goal-Seeking Analysis - finding the inputs necessary to achieve a goal. This analysis set a target for one variable and changes other variables until the target is achieved EIS (Executive Information System) supports senior-level in the organization. This system contains information from external sources as well as from internal data sources and contains very detailed information and is used for strategic purposes. A common feature of this system is a digital dashboard. These integrate information from multiple components and tailor the information to individual preferences. Artificial Intelligence simulates human intelligence such as the ability to reason and learn. These systems can learn or understand from experience, make sense of contradictory information, reason to solve problems and make decisions. The ultimate goal of this system is to build a system that can mimic human intelligence. Expert Systems are computerized advisory programs that imitate the reasoning processes of experts in solving difficult problems. Neural Networks is a category of artificial intelligence systems that attempts to emulate the way the human brain works. These networks analyze large quantities of information to establish patterns and characteristics in situations where the logic or rules are unknown. Genetic Algorithms is an artificial intelligence system that mimics the evolutionary, survival-of-the fittest process to generate increasingly better solutions to a problem. Intelligent Agents is a special purpose knowledge-based information system that accomplishes specific tasks on behalf of its users. An example of this is a shopping bot. A shopping bot is software that searches several retailer web sites and provides a comparison of each retailer's offering, including price and availability. 2.2 Business Processes Understanding The Importance of Business Processes A business process is a standardized set of activities that accomplish a specific task (such as processing a customer's order) These processes change a set of inputs into a set of outputs (goods or services). Examining business processes helps an organization determine bottlenecks, eliminate duplicate activities, combine related activities, etc. To stay competitive, organizations must optimize and automate their business processes. Customer-Facing Processes result in a product or service that is received by an organization's external customer. Business-Facing Processes are invisible to the external customer but essential to the effective management of the business and include goal setting, day-to-day planning, performance feedback, rewards, and resource allocation. Business Process Improvement attempts to understand and measure the current process and make performance improvements accordingly. Examples of customer-Facing and Business-Facing Processes Customer Facing Processes: • order processing • customer service • sales process • customer billing • order shipping Business Facing Processes: • strategic planning • tactical planning • budget forecasting • training • purchasing raw materials Steps in Business Process Improvement are as follows: Document as-is Process-----Establish Measures-----Follow Process-----Measure Performance-----Identify and Implement Improvements-----Repeat Business Process Re-Engineering is the analysis and redesign of workflow within and between enterprises. This thought process is different than that of business processes. It assumes the current process is out of date, does not work, and needs to be overhauled and re-done. The basic steps of this thought process is as follows: Set Project Scope-----Study Competition-----Create New Processes-----Implement Solution Business Process Modelling is the activity of creating a detailed flow-chart work flow diagram, use case diagram, or process map showing process inputs, tasks, and activities to determine whether a process is working. A business model is a graphic description of a process, showing the sequence of tasks that complete the process from a selected viewpoint. This process usually begins with an AS-IS Process Model. As-Is Process Model represents the current state of the operation that has been mapped, without any specific improvements or changes to existing processes. The next step is to build a TO-BE Process Model. To-Be Process Model shows the results of applying change improvement opportunities to the current (As-Is) process model. This approach ensures that the process is fully and clearly understood before the details of a process solution are decided. (As-Is is what is in place right now and the To-Be is what the business would like it to change to) Business Process Management A key advantage of information systems is their ability to improve business processes. A BPM integrates all of an organization's processes to make individual processes more efficient. It can be used to solve a single glitch or to create one unifying system to consolidate a myriad of processes. Key Reasons for BPM are listed as: • introduce greater efficiencies/improved productivity • improve service • reduce operational costs • improve organizational agility • improve process visibility • meet regulatory compliance • deal with integration issued Chapter 3 - The Internet and E-Business Digital Darwinism: implies that organizations cannot adapt to the new demands laced on them for surviving in the information age are doomed to extinction. Disruptive versus Sustaining Technology A disruptive technology is a new way of doing things that initially does not meet the needs of existing customers. Open new markets and destroys old ones. A sustaining technology produces an improved product that customers are eager to buy, such as a faster car or larger hard drive. Provides us with better, faster, and cheaper products in established markets. New Investment (disruptive technology) Existing investment (sustaining technology) Disruptive technologies typically cut into the low end of the marketplace and eventually evolve to displace high-end competitors and their reigning technologies. Internet is a global public network of computer networks that pass information from one to another using common computer protocols Protocols are standards that specify the format of data as well as the rules to be followed during transmission Several parties oversee the Internet and set standards: Internet Engineering Task Force (IETF): The protocol engineering and development arm of the internet. Internet Architecture Board (IAB): Responsible for defining the overall architecture of the Internet, providing guidance and broad direction to the IETF. Internet Engineering Steering Group (IESG): Responsible for technical management of IETF activities and the Internet standards process. World Wide Web (www) is a global hyper-text system that uses the Internet as its transport mechanism. Hypertext transport protocol (HTTP): is the internet standard that supports the exchange of information on the WWW. August 6 1991 First Website built by Tim Berners-Lee March Andreesen developed a new computer program called the NCSA Mosaic browser. Digital Divide occurs when those with access to technology have great advantages over those without access to technology. Internets impact of information: • E asy to compile – Searching information on products, prices, customers, suppliers, and partners is faster and easier when using the internet. • Increased Richness – Information richness refers to the depth and breadth of information transferred between customers and businesses. Businesses and customers can collect and track more detailed information when using the Internet. • Increased Reach – Information reach refers to the number of people a business can communicate with, on a global basis. Businesses can share information with numerous customers all over the world. • Improved content – Provides dynamic relevant content. Web 2.0 Web 2.0 is a set of economic, social and technology trends that collectively form the basis for the next generation of the Internet – a more mature, distinctive medium characterized by user participation, openness, and network effects. Web Mashup is a website or web application that uses content from more than one source to create a completely new service. Application programming interface (API) which is a set of routines, protocols, and tools for buildings software applications. Mashup editors are What you see is What you get for mashups. They provide visual interface to build a mashup, often allowing the users to drag and drop data points into a Web application. Web 3.0 Web 3.0 evolution of web usage and interaction among server Semantic Web is an evolving extension of the World Wide Web in which Web content can be expressed not only in natural language but also in a format that can be read and used by software agents, thus permitting them to find, share, and integrate information more easily. 1. Transforming the Web into a database – is the emergence of the data driven Web as structured data records are published to the Web in formats that are reusable and able to be queried remotely. 2. An evolutionary path to artificial intelligence – used to describe an evolutionary path for the Web that leads to artificial intelligence that can reason about the Web in a quasi- human fashion. 3. The realization of semantic Web and service-oriented architecture – Service Oriented Architecture is a business driven IS architectural approach that supports integrating a business as linked, repeatable tasks or services. 4. Evolution towards 3D – Concept of Second Life Intranet is an internalized portion of the internet, protected from outside access, that allows an organization to provide access to information and application software to only its employees. Provides central location where employees can find information. Extranet is an intranet that is available to strategic allies. Having a common area where employees, partners, vendors, and customers access information can be a major competitive advantage for an organization. Portal is a web site that offers a broad array of resources and services, such as email, online discussion groups, search engines, and online shopping malls. Kiosk is a publicly accessible computer system that has been set up to allow interactive information browsing. Few operating controls. There are 3 common forms of service providers 1. Internet Service Provider (ISP) – is a company that provides individuals and other companies access to the internet along with additional related services such as website building. Another form of ISP family is wireless Internet service provider (WISP), an ISP that allows subscribers to connect to a server at designated hotspots or access points using a wireless connection. Web hosting, Hard- Disk storage space, availability, support. 2. Online service provider (OSP) – offers an extensive array of unique services such as its own version of Web browser. Helps distinguish ISP’s that offer internet access and their own online content, such as AOL 3. Application service provider (ASP) is a company that offers an organization access over the Internet to systems and related services that would otherwise have to be located in personal or organizational computers. Employing the services of an ASP is essentially outsourcing part of a company’s business logic. Service Level Agreements (SLA) define the specific responsibilities of the service provider and set the customer expectations. ASP market is growing 3.2 E - Business E-commerce is the buying and selling of goods and services over the Internet. E-commerce refers only to online transactions. Advantages of E-Business Easy access to real time information is a primary benefit of e-business. Information richness refers to the depth and breadth of details contained in a piece of textual, graphic, audio, or video information. Information reach measures the number of people a firm can communicate with all over the world. Buyers need to make informed purchases. Operating New Markets. E-Business is perfect for increasing niche-product sales. Mass customization is the ability of an organization to tailor its products or services to the customers’ specifications. Personalization occurs when a company knows enough about a customer’s likes and dislikes that it can fashion offers more likely to appeal to the person, say by tailoring its Web site to individuals or groups based on profile information, demographics, or prior transactions. Long Tail refers to the tail of the typical sales curve. This strategy demonstrates how niche products can have viable and profitable business models when selling via e- business. Intermediaries are agents, software, or businesses that provide a trading infrastructure to bring buyers and sellers together. The introduction of e-business brought about disintermediation, which occurs when a business sells directly to the customer online and cuts out the intermediary. In reintermediation, steps are added to the value chain as new players find ways to add value to the business process. Cybermediation refers to the creation of new kinds of intermediaries that simply could not have existed before the advent of e-business including comparison- shopping sites. Improving Effectiveness – Interactivity measures advertising effectiveness by counting visitor interactions with the target ad, including time spent viewing the ad, number of pages viewed, and number of repeat visits to the advertisement. Through Clickstream data, they can observe the exact pattern of a consumer’s navigation through a site. Marketing via E-business 1. Associate (affiliate) program allows a business to generate commissions or referral fees when a customer visiting its Web site clicks on a link to another merchant’s Web site. 2. Banner ad is a box running across a Web site that advertises the products and services of another business, usually another e-business. 3. Click-through is a count of the number of people who visit one site and click an advertisement that takes them to the site of the advertiser. 4. Cookie is a small file deposited on a hard drive by a Web site containing information about customers and their browsing activities. 5. A Pop-up ad is a small Web page containing an advertisement that appears outside of the current Web site loaded in the browser. A pop –under is a form of a pop –up ad that users do not see until they close the current Web browser screen. 6. Viral Marketing is a technique that includes Web sites or users to pass on a marketing message to other Web sites or users, creating exponential growth in the message’s visibility and effect. Web site Visit Metrics Stickiness (visit duration time) The length of time a visitor spends on a Web site Raw visit depth (total Web pages exposure The total number of pages a visitor is per session) exposed to during a single visit to a Web site Visit depth (total unique Web pages exposure The total number of unique pages a visitor is per session) exposed to during a single visit to a Web site Web Site Visitor Metrics Unidentified visitor A visitor is an individual who visits a Web site. An “unidentified visitor” means that no information about that visitor is available. Identified Visitor A unique visitor is one who can be recognized and counted only once within a given period of time Identified visitor An ID is available that allows a user to be tracked across multiple visits to a Web site Web Site Hit Metrics Hits When visitors reach a web site, their computer sends a request to the site’s computer server to begin displaying pages. Each element of a requested page is recorded by the Web site’s server log file as a “hit” E-Business Models An e-business model is an approach to conducting electronic business on the Internet. E- Business transactions take place between two major entities – business and consumers. Business Consumer Business B2B B2C Consumer C2B C2C B2B customers are other businesses while B2C markets to consumers. Business to Business (B2B) applies to businesses buying from and selling to each other over the Internet. Online access to data, including expected shipping date, delivery date, and shipping status, provided either by the seller or a third – party provider is widely supported by B2B models. Electronics marketplace, or e-marketplace, are interactive business communities providing a central market where multiple buyers and sellers can engage in e- business activities. Business to Consumer (B2C) applies to any business that sells its products or services to consumers over the Internet. E-shop is a version of a retail store where customers can shop at any hour of the day without leaving their home or office. These online stores sell and support a variety of products and services. Types of Businesses: Brick and mortar business A business that operates in a physical store without an Internet presence Pure – Play (virtual) A business that operates on business the Internet only without a physical store. Examples include Click and mortar business A business that operates in a physical store and on the Internet. E-Mall consists of a number of e-shops ; it serves as a gateway through which a visitor can access other e-shops. Consumer to Business (C2B) applies to any consumer that sells a product or service to a business over the Internet. Consumer to Consumer (C2C) applies to sites primarily offering goods and services to assist consumers interacting with each other over the Internet. Communities of Interest – People interact with each other on specific topics, such as golfing and stamp collecting Communities of relations – People come together to share certain life experieces, such as cancer patients, senior citizens, and car enthusiasts Communities of fantasy – people participate in imaginary environments, such as fantasy football teams and playing one on one with Michael Jordan Organizational Strategies for E-Business Primary Business areas taking advantage of e-business include: 1. Marketing/sales 2. Financial Services 3. Procurement 4. Customer Service 5. Intermediaries Electronic Auction (e-auction) – Sellers and buyers solicit consecutive bids from each other and prices are determined dynamically Forward Auction – An auction that sellers use as a selling channel to many buyers and the highest bid wins Reverse Auction – An auction that buyers use to purchase a product or service, selecting the seller with the lowest bid. Marketing/ Sales – Direct selling was the earliest type of e-business and has proven to be a stepping stone to more complex commerce operations. Financial Services – • Financial cybermediary is an Internet – based company that facilitates payments over the Internet (Pay Pal) • Electronic cheque is a mechanism for sending a payment from a chequing or savings account. There are many implementations of electronic cheques, with the most prominent being online banking. • Electronic Bill Presentment and payment (EBPP) is a system that sends bills over the Internet and provides an easy to use mechanism to pay the bill. Available through local banks. • Digital Wallet is both software and information – the software provides security for the transaction and the information includes payment and delivery information. Types of Online Business Payments Electronic data interchange (EDI) is a standard format for exchanging business data. One way an organization can use EDI is through a value- added network. A Value-Added Network is a private network, provided by a third part, for exchanging information through a high – capacity connection. Financial EDI (financial electronic data interchange) is a standard electronic process for B2B market purchase payments. Procurement – • Maintenance, repair, and operations (MRO) materials (indirect materials) are materials necessary for running an organization but do not relate to the company’s primary business activities. • E-Procurement is the B2B purchase and sale of supplies and services over the internet. The goal of many e-procurement applications is to link organizations directly to pre- approved supplier catalogues and to process the entire purchasing transaction online. An electronic catalogue presents customers with information about goods and services offered for sale, bid, or auction on the Internet. Customer Service - E-Business enables customers to help themselves by combining the communications capability of a traditional customer response system with the content richness only the Web can provide – all available and operating 24/7. Consumer Protection is an organization that wants to dominate by using superior customer service as a competitive advantage must not only consider how to service its customers, but also how to protect its customers. Issues: Unsolicited goods and communications, Illegal or harmful goods, services, and content, Insufficient information about goods or their suppliers, Invasion of privacy, Cyberfraud. E-Business Security Methods: Encryption scrambles information into an alternative form that requires a key or password to decrypt the information. Encryption is achieved by scrambling letters, replacing letters, replacing letters with numbers and other ways. A secure socket layer (SSL) 1. Creates a secure and private connection between a client and server company 2. Encrypts the information 3. Sends the information over the Internet. SSL is identified by a Web site address that includes an “s” at the end – https A Secure electronic transaction (SET) is a transmission security method that ensures transactions are secure and legitimate. SET encrypts information before sending it over the Internet. However, SET also enables customer authentication for credit card transaction. E-Business Benefits and Challenges Highly Accessible Businesses can operate all year at any time Increased Customer Loyalty Additional channels to contact, respond to, and access customers helps contribute to customer loyalty. Improved Information Content In the past, customers had to order catalogues or travel to a physical facility before they could compare price and product attributes. Increased Convenience E-Business automates and improves many of the activities that make up a buying experience. Increased Global Reach Business, both small and large, can reach new markets Decreased Cost The Cost of conducting business on the Internet is substantially lower than traditional forms of business communications. E-Business Challenges: • Protecting Consumers: Consumers must be protected against unsolicitated goods and communication, illegal or harmful goods, insufficient information about goods or their suppliers, invasion of privacy, and cyberfraud. • Leveraging Existing Systems: Most companies already use information technology to conduct business in non-internet environments suc
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