Prentice Hall, 2003 1 Chapter 8 Mobile Commerce. Prentice Hall, 2003 2 Learning Objectives Describe...

Prentice Hall, 2003 1

Chapter 8

Mobile Commerce


Learning Objectives

Describe the characteristics and attributes of m-commerceDescribe the drivers of m-commerceUnderstand the supportive technologies and their capabilitiesDescribe the wireless standards and transmission networks


Learning Objectives (cont.)

Describe applications of m-commerce to finance, marketing, and customer serviceDescribe the applications of m-commerce within organizations

Describe B2B and supply chain applications of m-commerceDescribe consumer and personal applications of m-commerce


Learning Objectives (cont.)

Describe some non-Internet m-commerce applicationsDescribe location-based commerce (l-commerce)Describe the major limitations Describe some implementation issues of m-commerce


NextBus: A Superb Customer Service

The ProblemBuses in San Francisco have difficulty keeping to 20 minute schedule during rush hoursPosted schedule becomes meaningless

The SolutionBus riders carrying Internet-enabled cell phone or PDA helps:

Find estimated arrival time at each stop, digitally in real timeSoon location-based advertisements will pop up—you have time to get a cup of coffee before the bus arrives—Starbuck’s is 200 feet to the right


NextBus (cont.)

The ResultsPassengers in San Francisco are happy with the system

Worries about missing the bus are diminishedMay discover they have time for a cup of coffee before the bus arrives

Bus company can:Schedule betterArrange for extra buses when neededImprove operations


Exhibit 8.1NextBus Operational Model


Mobile Commerce: Overview

Mobile commerce (m-commerce, m-business)—any e-commerce done in a wireless environment, especially via the Internet

Can be done via the Internet, private communication lines, smart cards, etc.Creates opportunity to deliver new services to existing customers and to attract new ones


Exhibit 8.2Classes of M-Commerce Applications


M-Commerce Terminology

Generations1G: 1979-1992 wireless technology2G: current wireless technology; mainly accommodates text2.5G: interim technology accommodates graphics3G: 3rd generation technology (2001-2005) supports rich media (video clips)4G: will provide faster multimedia display (2006-2010)


Terminology and Standards

GPS: Satellite-based Global Positioning SystemPDA: Personal Digital Assistant—handheld wireless computerSMS: Short Message ServiceEMS: Enhanced Messaging ServiceMMS: Multimedia Messaging ServiceWAP: Wireless Application ProtocolSmartphones—Internet-enabled cell phones with attached applications


Specific Attributes of M-Commerce

Attributes of m-commerce and its economic advantages

Mobility—users carry cell phones or other mobile devicesBroad reach—people can be reached at any time


Attributes of M-Commerce (cont.)

Value-added attributes of m-commerceUbiquity—easier information access in real-timeConvenience—devices that store data and have Internet, intranet, extranet connections

Instant connectivity—easy and quick connection to Internet, intranets, other mobile devices, databases

Personalization—preparation of information for individual consumers

Localization of products and services—knowing where the user is located at any given time and match service to them


Exhibit 8.3Characteristics of M-Commerce


The Drivers

Widespread availability of devicesNo need for a PCHandset cultureVendors’ push

Declining pricesImprovement of bandwidthExplosion of EC in general


Mobile Computing Infrastructure

Cellular (mobile) phonesAttachable keyboardPDAsInteractive pagersOther devices

NotebooksHandheldsSmartpads

Screenphones—a telephone equipped with color screen, keyboard, e-mail, and Internet capabilitiesE-mail handheldsWirelined—connected by wires to a network

Hardware


Mobile Computing Infrastructure (cont.)

Unseen infrastructure requirementsSuitably configured wireline or wireless WAN modemWeb server with wireless supportApplication or database serverLarge enterprise application serverGPS locator used to determine the location of mobile computing device carrier



SoftwareMicrobrowserMobile client operating system (OS)Bluetooth—a chip technology and WPAN standard that enables voice and data communications between wireless devices over short-range radio frequency (RF)Mobile application user interfaceBack-end legacy application softwareApplication middlewareWireless middleware



Networks and accessWireless transmission media

MicrowaveSatellitesRadioInfraredCellular radio technology

Wireless systems


Exhibit 8.5 Delta Airlines Wireless System


Wireless Standards and Security

M-commerce supported byStandardsSecurityVoice systems


Wireless Standards

Wireless standardsTime-division Multiple Access (TMDA)General Packet Radio Services (GPRS)Code Division Multiple Access (CDMA)CDMA OneGlobal System of Mobile Communication (GSM)WLAN 802.11 (Wi-Fi)Wideband CDMA


Wireless Standards (cont.)

Wireless Application Protocol (WAP)—a set of communications protocols designed to enable different kinds of wireless devices to talk to a server installed on a mobile network, so users can access the InternetSubscriber Identification Module (SIM)Wireless Markup Language (WML)Voice XML (VXML)Enhanced Data Rates for Global Evaluation (EDGE)Universal Mobile Telecommunications System (UMTS)IPv6


Security Issues

VirusesSmart card security solutions

Voice communication can be intercepted by hackersOne solution is an embedded biometric add-on

Back-end security solutions—public key infrastructure (PKI) and M-CERT (mobile certification)


Voice Systems for M-Commerce

Hands-free and eyes-free operations increase productivity, safety, effectivenessDisabled people can use voice data for various tasksVoice terminals are portable2 ½ times faster than typingFewer errors


Interactive Voice Response

Interactive voice response (IVR)—a computer voice system that enables users to request and receive information and to enter and change data through regular telephone lines or through 1G cell phones

Patients schedule doctors’ appointmentsUsers request pick-up from FedExEmployees find information, select, or change benefits packagesElectric utilities can respond to customers reporting power outages


Voice Portals

Voice portal—a Web site with audio interface, accessed by making a phone call

Request information verbally from system that:Retrieves the informationTranslates it into a computer-generated voice replyTells you what you want to know

Iping.com—reminder and notification serviceHelps businesses find new customers


Mobile Financial Applications

Wireless electronic payment systemsMobile phones become secure, self-contained purchasing tools capable of instantly authorizing payments over the cellular network for goods and services consumed

Micropayments—electronic payments for small-purchase amounts (generally less than $10)


Mobile Financial Applications (cont.)

M-wallet (mobile wallet)—a wireless wallet that enables cardholders to make purchases with a single click from their wireless devicesBill payments directly from cell phone via:

BankCredit cardPrepaid arrangement


Examples of Financial Applications

Swedish Postal BankDagens IndustriCitibankJapanese banks

Hoover’s wireless (hoover.com)ASB Bank (New Zealand)Boston’s Faneuil Hall Marketplace


Exhibit 8.6Bill Payments by Cell Phone


Shopping from Wireless Devices

Buy.com allows shopping from wireless devicesIn 5-10 years most businesses will be wirelessOnline stores will become showrooms

View productsPurchase them using handheld devicesPossibly enhanced by bar code scanners Customization may be possible


Exhibit 8.7Mobile Shopping Supported by CRM


Targeted Advertisement

Personalization of services and enhanced user interface for wireless Web pages from barnesandnoble.com

Knowing user preferences or surfing habits user-specific advertising messages to the location of mobile users Using GPS marketers can send location-sensitive messages can be sent


Targeted Advertisement (cont.)

Get paid to listen to advertisements—listen to a 10–second ad before you dial your cell phone, and get 2 minutes of free long-distance time

Program flopped in the U.S.SingTel of Singapore recouped its initial investment from ad revenues in about a year


Targeted Advertisement (cont.)

Advertisement strategies and guidelines—Wireless Advertising Association (waaglobal.org) is trying to establish wireless ad guidelines

Opt-in ad programs involving mobile message alerts Addressing issues like spamming and unethical strategies:

Confirmed opt-ins Personally identifiable informationPush advertising


Wireless Advertising in Action

GPS helps target users from their locationVindigo.com—places to go and things to do in your areaGeePS.com—location-based start-up sent coupons to customers cell phonesGo2Online.com—locations-based Web domain helps mobile travelers find anything (e.g., the nearest oil change)


Supporting Customers & Business Partners(Consumer Services)

Using voice portals in marketing and customer service

Use vendor’s voice portal to check status of deliveries to a job siteService technicians provided with diagnostic information, enabling them diagnosis of difficult problemsSales people check inventory status during a meeting to help close a sale


Supporting Customers & Business Partners(Consumer Services) [cont.]

Using mobile portalsMobile portal—a customer interaction channel that aggregates content and services for mobile users

Portals charge for their services (per service or monthly fee):

Public mobile portals (e.g., Imode in Japan)Corporate portals

Serve a corporation ’s customers and/or suppliersE.g., major airline portals


Supporting Mobile Employees

Smartphones and hand-held devicesWearable wireless devices—mobile wireless computing devices for employees who work on buildings and other difficult-to-climb places

Cameras ScreenKeyboard Touch-panel display


Wearable Devices for Bell Canada Workers

Wearable technologyPowerful computer for pocket Keyboard attached to the vestFlatpanel display screen at the waistVideo camera attaches to his safety hat Cell phone is attached and connected to the computerBattery pack against the back


Wearable Devices (cont.)

Wearable devices enable workers to access:

Work ordersRepair manuals

This system was developed by Xybernaut (xybernaut.com)Problems with the technology are weather related


Supporting Mobile Employees (cont.)

Job dispatchTransportation (delivery of food, oil, newspapers, cargo, courier services, tow trucks)Taxis (already in use in Korea and Singapore)Utilities (gas, electricity, phone, water)Field service (computer, office equipment, home repair)Health care (visiting nurses, doctors, social services)Security (patrols, alarm installation)


Supporting Mobile Employees (cont.)

Sales force automation (SFA) toolsIntegrate software aimed at m-commerce applicationsEquipped with smartphones providing easy access to customer data at the central office

Contact management informationProduct and spare part availabilityDeal tracking


Non-Internet Intrabusiness Applications

Wireless networking used for item picking in warehousesDelivery and order status updatesOnline dispatching

Online diagnosis support from remote locationsParts ordering/inventory queries


Non-Internet Intrabusiness Applications (cont.)

Mobile shop-floor quality control systems enable

Voice reports by inspectorsData collection from facilitiesTransmission to a central processor

Salespeople connect to corporate networksRemote database queries


Exhibit 8.9Automated Wireless Workflow Applications


Internet-BasedIntrabusiness Applications

Applications implemented inside enterprises, some examples:

Sonera (Finland): electronic funds transfer (EFT) of paychecksChicago’s United Center: inventory can be taken in a matter of hoursFedEx and UPS: access Web, e-mail, databases, intranets, etc.


Internet-BasedIntrabusiness Applications (cont.)

Bertelsmann AG: gives junior-level executives wireless access to a company portal, JuniorNet, accessible from almost anywhereKemper Insurance Company: lets property adjusters report from the scene of an accidentU.S. Internal Revenue Service: equipping field employees with mobile devices that allows audits to be conducted anywhere, anytime


Exhibit 8.10Intelligent Office Connected by Wireless LAN


Mobile B2B and Supply Chain Applications

Both sell-side and buy-side of ERPUnified messaging makes user’s device less of an issue

Telemetry drives supply chain efficiency and productivity through automation of:

Data captureImproved billing timeliness and accuracyReduced overheadIncreased customer satisfaction

Collaboration among members of the supply chain is facilitated by mobile capabilities


Mobile Consumer and Personal Service Applications

Mobile gaming devicesPDAs (Handspring’s Visor) with Flash RAM cardNintendo’s Game Boy AdvanceSony’s PocketStationSega’s portable device connected to Dreamcast

Mobile gamblingGermany’s online lottery company fluxx.com available via mobile terminalsHong Kong, betting on horse races via cell phones is popular


Mobile Consumer and Personal Service Applications (cont.)

Mobile entertainmentMusicVideo—real-time streaming video (packetvideo.com)

Hotels—hotel guests equipped with Bluetooth-enabled mobile devices are instantly recognizedIntelligent homes and appliances


Exhibit 8.13Intelligent Home Connected by Wireless LAN



Wireless telemedicine—use of mobile telecommunications infrastructures and multimedia technologies to provide medical information and deliver health care services remotelyOther services for consumers

Providing news, weather, and sports reportsOnline language translationsInformation bout tourist attractions (hours, prices)Emergency services



Non-Internet consumer applicationsSmart cards used in transportation

“Contactless” cards (proximity cards) used to pay bus and subway fares and road tolls

Amplified remote-sensing cards have an RF (radio frequency) of up to 30 meters used for toll collection


Highway 91 Project (cont.)

Six express toll lanes along a 10–mile stretch in the median of the existing Highway 91

Express lane system has only one entrance and one exit, and it is totally operated with EC technologies



The system works:1. Only prepaid subscribers can drive on

the road2. Large sign over the toll way tells drivers

current fee for cruising the express lanes3. Sensors in the pavement let the toll way

computer know that a car has entered; the car does not need to slow or stop

4. AVI makes radio contact with a transceiver installed above the lane



The transceiver relays the car’s identity to the control center, where a computer calculates the fee for that day’s tripSurveillance cameras record the license numbers of cars without AVIs—can be stopped by police at the exit or fined by mailVideo cameras along the toll way enable managers to keep tabs on trafficSystem accesses the driver’s account and the fare is automatically deducted from the driver’s prepaid account



System saves commuters between 40 and 90 minutes each day, so it is in high demandUse of the same AVIs for other purposes:

Used in paid parking lotsSomeday you may be recognized when you enter the drive-through lane of McDonalds and a voice asks you, “Mr. Smart, do you want your usual meal today?”


Location-Based Commerce

Location-based commerce (L-commerce)—e-commerce applications provided to customers based on a user’s specific locationLocation-based technologies

Global positioning systems—a wireless system that uses satellites to enable users to determine their position anywhere on the earthGeographical information systems (GIS)—relates longitude and latitude of GPS into place or address (mapinfo.com)GPS on handsets—stand-alone units for tracking applications


Exhibit 8.14Location-Based Services Involving Maps


Exhibit 8.15GPS System


L-Commerce Applications (cont.)

E-911—Calls from cellular phones to providers of emergency services

Wireless carriers must provide feature that allows them to identify number and location of the user

Mobile 911 calls must be forwarded immediately to the appropriate agency

Automatic crash notification (ACN)—device (now experimental) that will automatically notify police of a vehicular accident


Telematics and Telemetry Applications

Telematics—integration of computers and wireless communications to improve information flow using the principles of telemetry

GM OnStar system—cellular phone and PDA are integrated to provide personal information management, mobile Internet services, entertainment on the vehicle vehicle dashboard Sophisticated text-to-speech and voice recognition capabilities minimize driver distraction


Telematics and Telemetry Applications (cont.)

Use as a remote vehicle self-diagnostics toolDaimler-Chrysler and Volvo experimented with installation of GSM chip sets in cars

Monitor performance and to provide an early warning system for potential problemsChip sends a message to the manufacturer indicating what the problem is Manufacturer’s system analyzes various data and provides a fix (via a software tool)

Developing faults found before they become critical and continuous operation of the car can be ensured


Barriers to L-Commerce

The accuracy of some of the location technologiesThe cost-benefit justificationM-spamThe bandwidth of GSM networks


Limitations of M-Commerce

Usability problemUsability of a site is critical to attract attention and retain user stickinessEffectiveness, efficiency, satisfactionSome mobile devices are found to be ineffectiveCustomers want to find exactly what they are looking for, easily and quickly, not possible in the 2G text-based environmentMore and faster multimedia will be available as 3G spreads


Technical Limitations

Lack of standardized security protocol

Security methodology needs to be incorporated in mobileCustomer confidence is low

Insufficient bandwidthLimits the extent to which mobility can be viewed commodity

3G licensesAuctioned by governmentsCertain countries cannot be served by these devices

Transmission & power consumption limitations

Multipath interferenceWeather and terrain problemsDistance-limited connections


Technical Limitations (cont.)

WAP limitationsSpeed—in 2002 connections to WAP sites are still too slowCost—fees for mobile phone users are still too highAccessibility—as of spring 2002, fewer than 50,000 WAP-accessible sites worldwide (must be written in WML)


Technical Limitations (cont.)

Potential health hazardsFear of radiationUnsafe to drive and use wireless phoneCell phones may interfere with sensitive medical devices (pacemakers)Lawsuits relating to the potential health hazards of wireless devices have already been filed—public is advised to adopt a precautionary approach in using mobile phones (earphone device)


Implementing M-Commerce

Basic (fixed) feesPoint-of-traffic feesTransaction feesContent and service charges

Payment clearingHosting feesCertification (PKI) fees

Revenue models


Implementing M-Commerce (cont.)

Consumer confidence and trustCustomers love free or inexpensive services like those offered by iModeCustomers not willing to pay large amounts of money for services unless they trust the product/vendorConfidence should increase with reliable payment mechanismsResearch is being conducted in this area


Implementing M-Commerce (cont.)

M-commerce value chainInvolves many partnersSuccess depends on

Coordination among participantsSufficient compensation for all

Use ASP to deliver m-commerce orLarge companies contract other vendors to complement their services


Managerial Issues

What is our timetable?Which applications first?Is it real or just a buzzword?Which system to use?


Summary

Characteristics and attributes of m-commerceDrivers of m-commerceSupporting technologiesWireless standards and technologiesFinance and marketing applications

Intrabusiness applicationsB2B applicationsConsumer applicationsNon-Internet applicationsL-commerceLimitations of m-commerce

Prentice Hall, 2003 1 Chapter 8 Mobile Commerce. Prentice Hall, 2003 2 Learning Objectives Describe...

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