Lec 01 Electronic Commerce Systems - Part 1 Student

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Chapter 12

Electronic

Commerce

Systems



Objectives for Chapter 12 Topologies that are employed to achieve connectivity across the

Internet

Protocols and understand the specific purposes served by several

Internet protocols

Business benefits associated with Internet commerce and be

aware of several Internet business models

Risks associated with intranet and Internet electronic commerce

Issues of security, assurance, and trust pertaining to electronic

commerce

Electronic commerce implications for the accounting profession



What is E-Commerce?

Electronic Commerce is the electronicprocessing and transmission of data.

Possible applications include:

± the buying and selling of goods and services,

± the delivery of digital products,

± the transfer of funds (electronic funds transfer

(EFT), ± the trading of stocks, and

± direct consumer marketing.



This chapter deals with three aspects

of electronic commerce:

Intranets within a corporation that utilizes

distributed data processing,

EDI business-to-business transactionprocessing, and

Internet business-to-business (B2B) and

business-to-consumer (B2C).



Intranet

There's one ma jor distinction between an

intranet and the Internet:

The Internet is an open, public space, while anintranet is designed to be a private space.

An intranet may be accessible from the

Internet, but as a rule it's protected by a

password and accessible only to employees or

other authorized users.



Intranet Risks

Intercepting network messages ± sniffing: interception of user IDs, passwords, confidential e-

mails, and financial data files

Accessing corporate databases ± connections to central databases increase the risk that data will

be accessible by employees Privileged employees

± override privileges may allow unauthorized access to mission-critical data

Reluctance to prosecute ± fear of negative publicity leads to such reluctance but

encourages criminal behavior



What is Electronic Data

Interchange?

The exchange of business transaction

information:

±

between companies ± in a standard format (ANSI X.12 or EDIFACT)

± via a computerized information system

In pure EDI systems, human involvements is

not necessary to approve transactions.



Communications Links

Companies may have internal EDI

translation/communication software and

hardware.

OR

They may subscribe to VANs to perform this

function without having to invest in personnel,

software, and hardware.



EDI System

Purchases

System

EDI

TranslationSoftware

EDI

TranslationSoftware

Communications

Software

Communications

Software

OtherMailbox

Other

Mailbox

Company

As mailbox

Company

Bs mailbox

Sales Order

System

Application

Software

Application

Software

Direct Connection

VAN

Company A Company B



Advantages of EDI

Reduction or elimination of data entry

Reduction of errors

Reduction of paper

Reduction of paper processing and postage

Reduction of inventories (via JIT systems)



EDI (Electronic Data Interchange)

Electronic data interchange (EDI) is the structured

transmission of data between organizations by

electronic means. It is used to transfer electronic

documents or business data from one computersystem to another computer system, i.e. from one

trading partner to another trading partner without

human intervention.

It is more than mere e-mail; for instance,

organizations might replace bills of lading and even

cheques with appropriate EDI messages.



A business engaged in electronic

commerce is exposed to many specificnew risks: Hardware failures

Software errors

Unauthorized access

Transactions lost in transit

Transactions never processed

Transactions altered or rearranged to change theirfinancial effects

Other fraudulent activities



Internet Technologies Packet switching

± messages are divided into small packets

± each packet of the message takes a different routes

Virtual private network (VPN) ± a private network within a public network

Extranets ± a password controlled network for private users

WorldWideWeb ± an Internet facility that links users locally and around the world

Internet addresses ± e-mail address

± URL address

± IP address



Packet Switching



Virtual Private Network (VPN)

A virtual private network (VPN) is a computer

network that uses a public telecommunication

infrastructure such as the Internet to provide

remote offices or individual users with secure

access to their organization's network. It aims

to avoid an expensive system of owned or

leased lines that can be used by only oneorganization.



Virtual Private Network (VPN)



Difference Between Intranet and

Extranet

An intranet is an information portal designed specifically forthe internal communications of small, medium or largebusinesses, enterprises, governments, industries or financialinstitutions of any size or complexity. Intranets can be custom-

designed to fit the exact needs of businesses no matter wherethey are situated. Users of intranets consists mainly of:

Members of the executive team.Accounting and order billing.Managers and directors.

Sales people and support staff.Customer service, help desk, etc..



Difference Between Intranet and

Extranet

An extranet is somewhat very similar to an

intranet. Extranets are designed specifically to

give external , limited access to certain files of

your computer systems to:

Certain large or priviledged customers.

Selected industry partners.

Suppliers and subcontractors... etc.



WorldWideWeb

World Wide Web is the part of the Internet that

allows HTML (and variations) formats to be sent and

received. HTML is a formatting language that creates

aWeb page format. To be able to access and readthese HTML pages, a Web browser is needed

(Netscape Navigator or MS Internet Explorer). Web

pages are stored on Web servers, typically dedicated

to the Web interface.

TheWeb interface requires HTTP (Hypertext Transfer

Protocol) for hyper-linking between pages.



WorldWideWeb The World Wide Web, abbreviated as WWW

and commonly known as the Web, is a system

of interlinked hypertext documents accessed

via the Internet. With a web browser, one can view web pages

that may contain text, images, videos, and

other multimedia and navigate between them

by using hyperlinks.



A hyperlink (or link ) is a reference to a

document that the reader can directly follow,

or that is followed automatically.

A hyperlink points to a whole document or to

a specific element within a document.

Hypertext is text with hyperlinks, and is

commonly viewed with a computer.



Hypertext is text displayed on a computer or other

electronic device with references (hyperlinks) to

other text that the reader can immediately access,

usually by a mouse click or keypress sequence. Apartfrom running text, hypertext may contain tables,

images and other presentational devices. Hypertext

is the underlying concept defining the structure of

theWorldWideWeb, making it an easy-to-use andflexible format to share information over the

Internet.



A web browser or Internet browser is asoftware application for retrieving, presenting,and traversing information resources on the

WorldWide Web. An information resource isidentified by a Uniform Resource Identifier(URI) and may be a web page, image, video, orother piece of content.[1] Hyperlinks present

in resources enable users to easily navigatetheir browsers to related resources.



A web page or webpage is a document or

information resource that is suitable for the World

WideWeb and can be accessed through a web

browser and displayed on a monitor or mobiledevice.

This information is usually in HTML or XHTML format,

and may provide navigation to other webpages via

hypertext links.Web pages frequently subsumeother resources such as style sheets, scripts and

images into their final presentation.



Web site refers to a set of connected,

hierarchical pages concerning the same topic

or entity.

Web sites may be one page or thousands of

pages. The point of entry to the site is typically

called the Web sites home page.



Internet Addresses

The Internet utilizes three types of addresses

for communication:

E-mail addresses, Web site addresses (URLs), and

Individual computer addresses (IPs)



E-mail Address

E-mail addresses have a user name @ domain name,without any spaces. The domain name requires atop-level domain (TLD) or suffix to the address thatindicates the type of Web page being accessed:

.com commercial .net Internet network provider

.orgnon-profit organization

.edu education and research

.gov government .mil military agency

.int international intergovernmental



URL Address URL (Uniform Resource Locator) refers to the address thatprovides access to the Web pages

Once in a browser, a user types in the Web site URL, and thecomputer retrieves the Web site.

The URL address defines a path to a facility or file on theWeb. URLs are typed into Web browsers for access to the Web site(s). Also, URLs can be embedded into Web pages toprovide hypertext links to other pages. The general format forURLs are:

Protocol prefix, such as http://

Domain name, typically the company/individual/topic name

Subdirectory name(s), there may be many levels of subdirectories separated by /

Document name, the actual Web page (HTML format text file)



IP Address

Each individual user has a separate and

unique IP address. Currently, IP addresses are

represented by a 32-bit data packet, which has

4 segments. Exactly how those 32 bits are

divided into segments depends upon the class

of the computer in the network (Class A is the

smallest number of nodes; Class C has thehighest number of nodes). These segments

are separated by periods.



IP Address

An Internet Protocol address (IP address) is a numerical labelthat is assigned to any device participating in a computernetwork that uses the Internet Protocol for communicationbetween its nodes. An IP address serves two principal

functions; host or network interface identification andlocation addressing. Its role has been characterized as follows:"A name indicates what we seek. An address indicates whereit is. A route indicates how to get there.

Exam ple: 128.180.94.109 (host, location, whois)

128.180 Lehigh University

94 Business Department faculty server

109 a faculty members office computer (node)

Lec 01 Electronic Commerce Systems - Part 1 Student

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