Chapter 2: E-business technology and infrastructure

Introduction to e-business technology

 Exploring technical aspects of e-business technology, including:
o standards (widely accepted norms or requirements that establish
o technical criteria and processes, often set by industry bodies),
o protocols (rules used by computers to communicate across a network),
o platforms (hardware or software frameworks that allow software to run),
o architectures (designs of information systems)
o communications infrastructures (such as computer and mobile phone networks).
 Defining an adequate technology infrastructure is vital to all companies adopting e-business.
 The infrastructure directly affects the quality of service experienced by users of the systems
in terms of speed and responsiveness.
 The e-business services provided through a standardized infrastructure also determine the
capability of an organization to compete through differentiating itself in the marketplace.
 Mcafee and Brynjolfsson (2008) suggest that to use digital technology to support
competition the mantra for the CEO should be: ‘Deploy, innovate, and propagate’:
o First, deploy a consistent technology platform.
o Then separate yourself from the pack by coming up with better ways of working.
o Finally, use the platform to propagate these business innovations widely and
reliably.
 In this regard, deploying IT serves two distinct roles –as a catalyst for innovative ideas and as
an engine for delivering them.
 E-business infrastructure refers to :
o the combination of hardware such as servers and client PCs in an organization,
o the network used to link this hardware
o the software applications used to deliver services to workers within
o the e-business and also to its partners and customers.
 Infrastructure also includes the architecture of the networks, hardware and software where
it is located.
 Finally, infrastructure can also be considered to include the methods for publishing data and
documents accessed through e-business applications.
 A key decision with managing this infrastructure is which elements are located within the
company and which are managed externally as third- party managed applications, data
servers and networks.
 e-business infrastructure and the process of reviewing new technology investments should
be flexible enough to support changes required by the business to compete effectively.
 For example, for the media there are many new technologies being developed which were
described from 2005 onwards as Web 2.0 and IPTV (television delivered over the broadband
Internet).
 Consider the implications for the newspaper publishing industry.
 In a speech to the American Society of Newspaper Editors in April 2005, Rupert Murdoch of
News Corporation said:
o Scarcely a day goes by without some claim that new technologies are fast writing
newsprint’s obituary. Yet, as an industry, many of us have been remarkably,
unaccountably complacent. Certainly, I didn’t do as much as I should have after all
the excitement of the 1990s. I suspect many of you in this room did the same,
quietly hoping that this thing called the digital revolution would just limp along. Well
it hasn’t… it won’t…. And it’s a fast developing reality we should grasp as a huge
opportunity to improve our journalism and expand our reach. (News Corporation,
2005).
 E-business infrastructure components

  Fig 2.1 A five-layer model of e-business infrastructure

 E-business infrastructure components
o Figure 2.1 summarizes how the different components of e-business architecture
which
o need to be managed relate to each other.
o The different components can be conceived of as different layers with defined
interfaces between each layer.
o The different layers can best be understood in relation to a typical task performed
by a user of an e-business system.
o For example, an employee who needs to book a holiday will access a specific human
resources application or program that has been created to enable the holiday to be
booked (Level I in Figure 2.1).
o This application will enable a holiday request to be entered and will forward the
application to their manager and human resources department for approval.
o E-business infrastructure components
o To access the application, the employee will use a web browser such as Microsoft
Internet Explorer, Mozilla Firefox or Google Chrome using an operating system such
as Microsoft Windows, Apple OS X (Level II in Figure 2.1).
 o This systems software will then request transfer of the information about the
holiday request across a network or transport layer (Level III in Figure 2.1).
o The information will then be stored in computer memory (RAM) or in long-term
magnetic storage on a web server (Level IV in Figure 2.1).
o The information itself which makes up the web pages or content viewed by the
employee and the data about their holiday request are shown as a separate layer
(Level V in Figure 2.1), although it could be argued that this is the first or second
level in an e-business architecture.
 Table 2.1 Key management issues of e-business infrastructure

Networks and the Internet

 Individual computers consist of both hardware (input devices, output devices, memory and
central processing units) and software (operating systems, utilities and applications).
 These form the bases of all computing activities.
 Connecting computers together involves forming networks.
 Networks are what make e-business so interesting: they open up exciting opportunities for
communication, collaboration and markets.
 There are several types of networks:
o local area networks (LANs)
o Wireless LANs
o Wide area networks (WANs)
o Virtual private networks (VPNs) – commonly used to secure communications
through the public internet
o Internetworks (e.g. intranets, extranets and the internet).
 Local Area Networks (LANs)
o local area networks (LANs) – a network covering a small physical area, such as a
small office
o LANs have been created on the basis of the locality of reference principle.
o According to Comer :
 “Computer communication follows two distinct patterns. First, a computer is
more likely to communicate with computers that are physically nearby than
with computers that are far away. Second, a computer is more likely to
communicate with the same computers repeatedly.”
o Typically, in a laboratory, computers are connected by some kind of cable to a server
that allows them to share files, print, etc.
o Computers will usually frequently interact with the local server.
o LAN’s promote:
 Resource sharing
 e.g. make use of common printers, data, applications
 Communication
 e.g. allows users and applications to interact
 Management
 e.g. remote setup of applications
 Cost-effectiveness
 shared resources = reduced cost/time/sys requirements
o LANS also make new applications possible – groupware
o Fig 2.2 LAN Topologies

o LAN Topologies
 A star topology is highly fault tolerant, as a break in the network cabling will
only disable one computer
 A bus topology requires less wiring than a star, but it is completely disabled
if the network cable is cut
 A ring topology has the same problem as a bus, but it is easier to coordinate
 Wireless LANs
o The ever-increasing need for mobility (and location freedom through the availability
of mobile computers like laptops, PDAs, etc…) is leading to the proliferation of
wireless networks.
o This is a network linking two or more computers without wires.
o There are various standards governing wireless LANs, although the one enjoying the
most widespread deployment is the IEEE 802.1b standards – commonly known as
WiFi
 Wide area networks (WANs)
o wide area networks (WANs) – a network that covers a broad geographical area
o WANs are designed to allow many LANs or computers to communicate over large
distances at a reasonable level of performance.
o The key issue that separates WANs from LANs is scalability – a WAN must be able to
grow as needed to connect many sites spread across large geographic distances.
o Therefore, a WAN does not only connect computers, it must be able to provide
sufficient capacity to permit computers to communicate simultaneously.
o Most WANs are based on the principle of switching networks
o Switching networks link communication systems called stations.
o A station can be a computer, a terminal or even a complete LAN
o Data in the form of packets are transferred from one station to another via a
network of intermediate systems called switching nodes or switches
o Each switch is essentially a simple computer that is dedicated to sending and
receiving packets
o A link between two switches can be virtually anything – coaxial cable, optical fibre,
satellite channels and microwave links
o A network of switches is referred to as a wide area network.
o Properties for a WAN:
 Switching nodes either pass data to other switching nodes or to an attached
station.
 Connections between switching nodes are typically multiplexed to increase
cost effectiveness
 The network of switching nodes does not have to be fully connected i.e. (a
packet passing from one station to another potentially will pass through
many switching nodes).
 Wide area packet switching systems use the store and forward technique :
packets arriving at a switch are placed in a queue until the switch can
forward them to the destination station
 The technique allows a packet switch to buffer a short burst of packets that
arrive simultaneously
  Fig 2.3 Addresses and Routing in WANs

Intranet
 Intranets are used extensively for supporting sell-side e-commerce from within the
marketing function.
 They are also used to support core supply-chain management activities asmdescribed in the
next section on extranets.
 A marketing intranet has the following advantages:
o Reduced product lifecycles – as information on product development and marketing
campaigns is rationalized we can get products to market faster.
o Reduced costs through higher productivity, and savings on hard copy
o Better customer service – responsive and personalized support with staff accessing
customer; over the web
o Distribution of information through remote offices nationally or globally
 Intranets are also used for internal marketing communications since they can include the
following types of information:
o Staff phone directories;
o Staff procedures or quality manuals;
o Information for agents such as product specifications, current list and discounted
prices, competitor information, factory schedules, and stocking levels, all of which
normally have to be updated frequently and can be costly;
o Staff bulletin or newsletter
o Training courses.
 Intranets can be used for much more than publishing information to cut costs.
 This guidance to adopt intranet initiatives is from the Intranet Benchmarking Forum (IBF),
the world’s leading intranet and portal benchmarking group:
o Build bridges with internal customers
o Research users’ needs
o Implement or expand self-service
o Target further design, print and distribution saving
o Improve usability
o Revamp HR content
o Create content for customer-facing staff
 o Create internal helpdesk content
o Enhance the employee directory
o Put senior leaders online.
o Leverage online meetings
o Measure savings.
 Build bridges with internal customers
o The IBF recommend that intranet initiatives are driven from the business units that
will benefit.
o They say: ‘Where intranets are achieving cost-savings, the impetus often comes from
business units or functions, not the central intranet team. From HR and finance to
manufacturing units and customer service operations, it is these business areas that
are best placed to identify inefficient processes and practices in their area, and then
approach the intranet team for help’
 Research users’ needs
o IBF advise: ‘The leaders in the field carry out research with the aim of building a
picture, for each of their main employee groups, of their working patterns, the
processes they follow and where the frustrations, blockages and inefficiencies lie, as
well as finding out in detail about how they currently use the intranet and where
they think it could help them work more efficiently.’
 Implement or expand self-service
o Re-engineering process to enable self-service is the most significant way intranets
cut costs for organizations is by enabling administrative processes to be
reengineered – particularly in the HR area – and migrated online via the intranet.
o This can make processes far more cost-efficient (and effective) for the organization
and individual users.
o The British Airways intranet has achieved some impressive results following its re-
launch 1 as a self-service intranet :
 100 per cent of internal recruitment is now carried out on the intranet
 100 per cent of staff travel is booked on the intranet
 33 per cent of staff training is delivered through the intranet
 80 per cent of employees update their contact details on the intranet
o The most popular self-service application has been the relatively simple e-Pay tool
where employees access their payslip. This alone delivered BA savings of £90,000
per year
 Target further design, print and distribution saving.
o Reduction in physical and distribution costs through moving towards a ‘paperless
office’.
 Improve usability.
o Making it quicker to find information through improving information architecture
and ‘findability’, i.e. better browsing and searching functionality.
 Revamp HR content.
o As indicated by the examples given above, improvements to HR functionality often
give the biggest benefits to the employees and the business.
 Create content for customer-facing staff.
o The example is given of the UK-based insurance group Prudential which has used its
intranet to provide content and tools that help contact centre staff respond to
telephone, e-mail and postal enquiries from customers. It allows advisers to search
 the information there quickly, including by product code which is then integrated
with the Prudential CRM system
 Create internal helpdesk content.
o Costs of internal helpdesks for example, for IT, HR or Finance can be delivered more
efficiently via the intranet. The Intranet Benchmarking Forum (IBF) suggests it costs
about £8 to £10 to respond to each request for help by telephone, and about £5 to
do so by e-mail.
 Enhance the employee directory.
o The IBF say: ‘A good people search can be a killer app: many intranet experts agree
that, more than anything else, staff want to use the intranet to get in touch with one
another.
 Put senior leaders online.
o This is costly in geographically dispersed organizations. But intranets make it easier
and more cost-effective for senior leaders to communicate their ideas and ‘walk the
virtual floor’ – for example through blogs that allow staff to comment on posts, or
through a regular online webcast or chat Q&A sessions.
 Leverage online meetings.
o This is web conferencing which although not directly enabled by the intranet, should
facilitate web conferencing.
 Measure savings.
o The IBF state that: ‘Few organizations have made progress in measuring the cost
savings they can attribute to the intranet, or even to parts of it.’
o This is partly because it is difficult to measure cause and effect.
o But the study does gives some examples:
o Ford estimates that online training delivered via its portal will drive down training
costs to an average of $0.21 per class, down from $300-$2,500 per class.
o Cisco cut the cost of processing employee expense reports from $50.69 with the
previous forms-based system to $1.90 three years later. Total corporate savings by
that third year were $7m. The average elapsed time for processing each expense
report dropped from 21 to 4 days.
o But the study does gives some examples:
o BT’s implementation of e-procurement enabled 95 percent of all its goods including
desktop computing, stationery, clothing, travel and agency staff – so reduced the
average purchasing transaction cost from £56 to £40 inside a year.
o Another example is the introduction of an online room booking service some years
ago. For a total development cost of £150,000, the service initially reduced direct
costs by about £450,000 p.a. The cost savings were achieved through the near
elimination of a call centre that previously handled the bookings
 In addition to these ‘classical’ uses of intranets, intranet developer Odyssey ([Link]-
[Link]) identifies some less common intranet applications which involve internal
communications:
o Employee incentive scheme. Companies reward the best employees according to
anonymous voting by their peers. At the end of each quarter, prizes such as DVD
players and televisions are awarded
o Text messaging. A distribution company keeps in touch with its sales staff and
drivers through enabling staff to contact colleagues who are ‘on the road’ using SMS
text messaging
 o Holiday booking. A workflow system forwards holiday requests to the relevant
manager and informs the applicant automatically. Team managers can also check on
the intranet when people within their group have booked holidays
o In addition to these ‘classical’ uses of intranets, intranet developer Odyssey
([Link]) identifies some less common intranet applications which
involve internal communications:
o Resource booking. Viewing and making bookings of meeting rooms is another simple
application that can save time.
o News screen. Displaying the company’s latest news and most recent achievements
on a dedicated screen can give a focal point to a waiting room or foyer area.
o Integrated external resources. Route planning, mapping or traffic news sites can be
integrated into the intranet to save time for staff. One example of this is a housing
authority that stores its list of properties on the intranet. Each house has a link to a
mapping site (e.g. Multimap [Link]), which will display the location of
the property based on its postcode)

Extranet Applications
 Although an extranet may sound complex, from a user point of view it is straightforward.
 You have bought a book or CD online and have been issued with a username and password
to access your account, then you have used an extranet.
 This is a consumer extranet.
 Extranets are also used to provide online services which are restricted to business
customers.
 If you visit the Ifazone ([Link]) extranet of financial services company Standard
Life, which is designed for the independent financial advisers who sell its products, you will
see that the
 The Ifazone extranet is vital to Standard Life since 90 per cent of business is now introduced
through this source.
 Extranet Applications
 Dell Premier is an example of a business customer extranet for a large corporation.
 The system helps Dell encourage customer loyalty to Dell since once integration occurs
customers are less likely to change suppliers due to switching costs.
 Dell also encourages consumers to make suggestions about new products through its
IdeaStorm ([Link]) service for which customers have to be registered
 Dell provides Premier [Link] for its business customers. This is how Dell describes the
service to customers
 Premier. Dell. Com is a secure, customizable procurement and support site designed to save
your organization time and money through all phases of lT product ownership:
o Easy Ordering – A custom online store ensures access to your products at your price.
o Easy Tracking – View real-time order status. Online invoices and purchase history
details.
o Easy Control – Custom access groups define what users can see and do within
Premier.
 It explains how Dell Premier can be used for e-procurement as follows:
o Dell integrates a customized Premier catalog with your Enterprise Resource Planning
(ERP) system to give you more control over your purchasing process and to help
ensure accurate and efficient transactions.
 o Aligning with your Procurement System – Dell can integrate with a variety of ERP
applications, including: Ariba, Commerce One. Lawson, Oracle Purchasing, SAP,
SciQuest and more.
o Dramatic Savings – E-Procurement integration can reduce purchasing overhead and
order processing time. Consolidating purchase records into one system streamlines
administration, while electronic invoicing and payment save employee processing
time.
o The Solution for You – Return your shopping contents to your ERP system
electronically as Dell’s integrated platform is designed to help improve efficiencies
and order accuracy, while reducing product delivery times. Source:
[Link]
 Vlosky et al. (2000) refer to these business benefits of an extranet:
o Information sharing in secure environment.
 Information needed to support business through a range of business
partners can be shared using an extranet.
 Vlosky et al. (2000) give the example of advertising agency Saatchi using an
extranet to allow their advertisers to access draft advertising material during
a project Information for suppliers is often shared by providing a log-in to a
database which shows demand for products.
o Cost reduction.
 Operating processes can be made more efficient through an extranet.
 The example given by these authors is Merisel, a $3.5 billion computer
hardware reseller reducing its order processing costs by 70%. Such cost
reductions are achieved by reducing of people involved in placing orders and
the need to rekey information from paper documents.
o Order processing and distribution.
 The authors refer to an ‘electronic integration effect’.
 For example, an extranet can connect a retailer’s point of sales terminals to
a supplier’s delivery system, ensuring prompt replenishment of goods sold.
 This potentially means less lost sales because of out-of-stock items and a
lower inventory holding is needed.
o Customer service.
 Improving levels of service is one of the main benefits of the Premier
[Link] extranet described above.
o Distributors or agents of companies can also find information such as customized
pricing advertising materials.
o For example, 3M provides open web access to individual customers to find
information about its office products such as Post-it notes and transparent films
([Link]/uk/office).
 Many of the management issues involved with managing extranets are similar to those for
intranets.
 These are five key questions that need to be asked when reviewing an existing extranet or
when creating a new extranet:
o Are the levels of usage sufficient?
o Is it effective and efficient?
o Who has ownership of the extranet?
o What are the levels of service quality?
 o Is the quality of the information adequate?
 Are the levels of usage sufficient?
o Extranets require a substantial investment
o But as with a facing web site, efforts need to be made to encourage usage since we
are asking the users of the service to change their behaviour.
o It is in the organization’s interest to encourage usage, to achieve a return on their
investment and achieve the cost savings and efficiencies intended.
o Many financial advisers may be comfortable with their existing way of selling
products using the phone and post.
o Education will be needed to explain the benefits of the extranet and incentives such
as increased commission may also be used.
 Is it effective and efficient?
o Controls must be put in place to assess how well it is working d improve its
performance.
o Return on investment should be assessed.
 For example, visitor levels can be measured for different types of audiences
and the level of usage for accessing different types of information can be
assessed.
o The direct and indirect cost savings achieved through each extranet transaction can
be calculated to help assess effectiveness.
 For example, 3M, manufacturer of many products including office products
such as Post-it notes, has an extranet to connect to the office supply
retailers (see [Link]/uk/easy).
 Retailers download the latest price lists and promotional information such
as product pictures.
 Each digital download represents a significant saving in comparison to
shipping physical items to the retailer.
 Who has ownership of the extranet?
o Functions with an interest in an extranet include:
 IT (technical infrastructure)
 Finance (setting payments and exchanging purchase orders and invoices)
 Marketing (providing marketing materials and sales data to distributors or
providing services to customers)
 Operations Management (exchanging information about inventory).
 Clearly the needs of these different parties must be resolved and
management controls established.
 What are the levels of service quality?
o Since an extranet will become a vital part of an organization’s operating process, a
problem with the speed or availability of the extranet could cause loss of a lot of
money
o It is arguably more important than the public-facing Internet site.
 Is the quality of the information adequate?
o The most important attributes of information quality is that it is up-to-date and
accurate.
o Vlosky et al. (2000) point out the importance of liability if information is inaccurate
or the extranet crashes
 Extranets are used extensively to support supply chain management as resources are
ordered from suppliers and transformed into products and services to customers.
 At Marshall Industries, for example, when a new customer order is received across the
extranet it automatically triggers a scheduling order for the warehouse [transferred by
intranet), an order acknowledgement for the customer and a shipping status when the order
is shipped (Mougayer, 1998).
 To enable different applications within a company such as a sales ordering system and an
inventory control system to interoperate with each other and databases in other companies,
requires an internal company intranet to be created that can then communicate across an
extranet with applications on another company intranet.
 To enable different applications on the intranet to communicate, middleware is used by
systems integrators to create links between organizational applications or between different
members of a supply chain.
 For example, within a supply chain management system, middleware will translate requests
from external systems such as a sales order so they are understood by internal systems
(relevant fields are updated in the database) and then it will trigger follow-up events to fulfill
the order.
 Middleware
o Software used to facilitate communications between business applications including
data transfer and control.
o This middleware technology that is used to connect together different business
applications
o Their underlying databases across extranets is now also referred to as enterprise
application integration (EAI) (Internet World, 1999).
o Such applications include a sales-order processing system and a warehousing
system.
o It now also includes software programs from different organizations. Enterprise
application Integration (EAI)
o Software used to facilitate communications between business applications including
data transfer and control
 Encouraging use of intranets and extranets
o Although intranets and extranets have many benefits for the business, they often
represent a change to existing methods of working for business people.
o As such, encouraging their usage is often a challenge.
o In many ways, this challenge is similar to encouraging customers to use open- access
web sites.
o A common issue with intranets is that they may be launched to a great fanfare, but,
if their content is neglected, their usage will dwindle.
 Common warning signs that are identified are:
o Staff usage of the intranet is low, and not growing.
o The majority of content is out-of-date, incomplete or inaccurate.
o The intranet is very inconsistent in appearance, particularly across sections managed
by different groups.
o Almost all information on the intranet is reference material, not news or recent
updates.
o Most sections of the intranet are used solely to publicize the existence of the
business groups within the organization.
Firewalls
 A specialized software application mounted on a server at the point which the company is
connected to the internet, its purpose is to prevent unauthorized access into the company
from outsiders.
 Firewalls are necessary when creating an intranet or extranet to ensure that outside access
to confidential information does not occur.
 Firewall software can be configured to only accept links from trusted domains representing
other offices in the company.
 A firewall has implications for e-marketing since staff accessing a web site from work may
not be able to access some content such as graphics plug-ins.
 The use of firewalls within the infrastructure of a company is illustrated in Figure 2.4.
 Fig 2.4: Firewall positions within the e-business infrastructure of the B2B company

  It is evident that multiple firewalls are used to protect information on the company.
 The information made available to third parties over the Internet and extranet is partitioned
by other firewall using what is referred to as the ‘demilitarized zone’ (DMZ).
 Corporate data on the intranet are then mounted on other servers inside the company.

Network Standards
 The internet and similar networks are based on a set of technical communications protocols
 A ‘protocol’ is a highly-restricted form of language shared by computers which enables them
to communicate with each other.
 You are not expected to learn the detail of the technical side of e-business
 A basic understanding of certain protocols is necessary in order to appreciate what makes e-
business possible and how it is changing.
 The most important of these protocols are the Transmission Control Protocol (TCP) and the
Internet Protocol (IP).
 These are usually written together as TCP/IP as they operate very closely together.
 The Transmission Control Protocol is a transport layer protocol that moves data between
applications.
 The Internet Protocol is a network-layer protocol that moves data between host computers.
 The data transmissions standards of the Internet such as TCP/IP are part of a larger set of
standards known as the Open Systems Interconnection (OSI) model.
 This defines a layered model that enables servers to communicate with other servers and
clients.
 When implemented in software, the combined layers are referred to as a ‘protocol stack’.
 Fig: 2.5 The 7-layer Reference model

 The seven layers of the OSI model are:

o Application. The program such as a web browser that creates and receives
messages.
o Presentation. These protocols are usually part of the operating system.
o Session. This includes data-transfer protocols such as SMTP, HTTP and FTP.
o Transport. This layer ensures the integrity of data transmitted.
 Examples include the Internet TCP and Novell SPX.
o Network. Defines protocols for opening and maintaining links between servers. The
best known are the Internet protocol IP and Novell IPX.
o Data link. Defines the rules for sending and receiving information.
o Physical. Low-level description of physical transmission methods
 The 7-layer reference model has been adopted into a more effective form.
 This is called the Transmission Control Protocol/Internet Protocol. Fig 2.6 The five layers of
the TCP-IP reference model
 The Transmission Control Protocol layer of TCP/IP breaks files into efficiently sized chunks of
data, known as packets.
 Packets are units of data that are routed between an origin (often a server) and a
destination (such as a client) on the internet.
 The Internet Protocol communicates these chunks of data using a technique known as
packet-switching.
 Once they all arrive at their destination they are re-assembled into the original file (by the
Transmission Control Protocol).
 Some important applications of TCP are email, file transfer and the web.
 The postal service is a good analogy for the transmission of data around the
 Internet using the TCP/IP protocol.
 Before we send mail, we always need to add a destination address.
 Likewise the IP acts as an addressed envelope that is used to address a message to the
appropriate IP address of the receiver (Figure 2.7)
 Fig: 2.7 TCP/IP Protocol
  The Internet is a packet-switched network that uses TCP/IP as its protocol.
 As messages or packets of data are sent, there is no part of the network that is dedicated
them.
 This is like the fact that when your letters and parcels are sent by post they are mixed with
letters and parcels from other people.
 The alternative type of network is the circuit- switched network such as phone systems
where the line is dedicated to the user for the duration of the call.
 Taking the analogy further, the transmission media of the Internet such is telephone lines,
satellite links and optical cables are the equivalent of the vans, trains and planes that are
used to carry post.
 Transmission media for the Internet include analogue media such as phone lines and faster,
digital media such as Integrated Service Digital Network technology (ISDN) and more
recently the Asynchronous Digital Subscriber Line (ADSL
 In addition to the transmission media, components of the network are also required to
direct or route the packets or messages via the most efficient route.
 On the Internet these are referred to as ‘routers’ or ‘hubs’, and are manufactured by
companies such as Cisco and 3Com.
 The routers are the equivalent of postal sorting offices which decide the best route for mail
to take.
 They do not plan the entire route of the message
 Rather they direct it to the next router that seems most appropriate given the destination
and current network traffic.

The Web
 It is important to understand that the internet and the web are not the same thing. The web
is part of the internet – a very important part – but there’s more to the internet than just the
web.
 The web is based on the Hypertext Markup Language (HTML) standard, which is how we
publish information on web pages.
 HTML has many different functions, including hyperlinks, which allow users to move easily
from one document or web page to the next.
 For users to experience the web, they must have what is known as a web browser installed
on their computer.
 This is a software application that permits them to connect to servers to access and view
content online.
 Fig 2.8 Information Exchange between a web browser and a web server
 Figure 2.8 indicates the process by which web browsers communicate with web servers.
 A request from the client PC is executed when the user types in a web address, clicks on a
hyperlink or fills in an online form such as a search.
 This request is then sent to the ISP and routed across the Internet to the destination server
using the mechanism described in the section on protocols in networking standards, above.
 The server then returns the requested web page if it is a static (fixed) web page, or, if it
requires reference to a database, such as a request for product information, it will pass the
query on to a database server and will then return this to the customer as a dynamically
created web page.
 The Web - Cloud Computing
o In the past, web browsers were just one of many different software applications,
including word processors and media players.
o The move towards what has been termed cloud computing means that activities
such as word processing or the creation of databases are done through the browser,
on servers in the ‘cloud’.
o Cloud computing
 The use of distributed storage and processing on servers connected by the
Internet, typically provided as software or data storage as a subscription
service provided by other companies.
 In descriptions of web services you may hear confusingly, that they access
‘the cloud’ or the term ‘cloud computing’, where the cloud referred to is the
Internet (networks are often denoted as clouds on diagrams of network
topology).
 If you are accessing Google Docs, then they will be stored somewhere ‘in the
cloud’ without any knowledge of where it is managed since Google stores
data on many servers.
 And of course, you can access the document from any location.
 But there are issues to consider about data stored and served from the
cloud: ‘is it secure, is it backed up, is it always available?’.
 The size of Google’s cloud is indicated by Pandia (2007) which estimated
that Google has over 1 million servers running the open-source Linux
software.
 Cloud computing enables users to access and use web applications that
reside in vast data centres located around the world instead of on their own
personal computers.
 It is called ‘cloud computing’ because most network diagrams denote the
internet as a cloud (see Figure 2.9).
 These applications based in the cloud are supposed to benefit from massive
on- demand scalability and can be dynamically provisioned to achieve
economies of scale, saving businesses money.
 Importantly, these resources are provided as a service over the internet and
are often billed like utilities.
 Figure 2.9: Cloud computing
  Cloud computing is similar to the client/server architecture in that the
‘cloud’ consists of a series of high-performance servers that offer content.
 The difference between client/server models and the cloud computing
model is that the software and the data reside on the servers in the cloud,
and not on the client machines, as is the case with traditional client/server
architectures.
 The reason for this is that companies offering cloud services believe that
users want their information to be accessible from anywhere and available
on multiple platforms:
 mobile phones
 across computers at home and at work; and shared with friends,
family and colleagues.
 Think of examples of web services that you or businesses use, and you will
soon see how important they are for both personal and business
applications.
 Examples include:
 Web mail readers
 E-commerce account and purchasing management facilities such as
 [Link]
 Many services from Google such as Google Maps, Gmail, Picasa and
Google
 Analytics
 Customer relationship management applications from
[Link] and
 Sieble/Oracle
 Supply chain management solutions from SAP, Oracle and Covisint
 E-mail and web security management from companies like MessageLabs.
 The idea is to store everything ‘out there’ so that an employee or work
team, for example, can access it whenever and from wherever it is needed.
 With the move to the cloud comes a new set of concerns :
 the possibility of network disruption and data not being available,
 the security of data that are stored in the cloud, user privacy and
others.

 From the point of view of managing IT infrastructure these changes are

dramatic since traditionally companies have employed their own
information systems support staff to manage different types of business
applications such as e-mail.
 A web service provider offers an alternative where the application is hosted
remotely or off-site on a server operated by an Application Service Provider
(ASP).
 Costs associated with upgrading and configuring new software on users’
client computers and servers are dramatically decreased.
 The Web – Hypertext Transfer Protocol
o The Hypertext Transfer Protocol (HTTP) is a standard for transferring requests for
the delivery of web pages from servers to browsers.
o The transfer involves sending and receiving packets of data.
 o When you click on a link while viewing a web site, your web browser will request
information from the server computer hosting the web site using HTTP.
o You will probably be familiar with HTTP from your experiences of surfing online, as
all web addresses start with ‘[Link]
o The technical name for web addresses is a Uniform (or universal) Resource Locator
(URL). What follows the ‘[Link] is known as a domain name.
 The Web – Domain Name
o The domain name refers to the name of the web server.
o It is usually selected to be the same as the name of the company, and the extension
will indicate its type.
o The extension is also commonly known as the generic top-level domain (gTLD).
o Note that gTLDs are currently under discussion and there are proposals for adding
new types such as .store and .firm.
o Common gTLDs are:
 .com represents an international or American company such as
[Link].
 .org are not-for-profit organizations (e.g. [Link])
 .mobi – introduced in 2006 for sites configured for mobile phones
 .net is a network provider such as [Link]
o There are also specific country-code top-level domains (ccTLDs):
 .[Link] represents a company based in the UK such as
[Link].
 .au, .ca, .de, ,es, fi, .fr, .it, nl, etc. represents other countries
 .[Link] is a UK-based university or other higher education institution (e.g.
[Link]).
 .[Link] is for an organization focusing on a single country (e.g.
[Link]).
o For example, the domain name for the London School of Economics and Political
Science is ‘[Link]’.
o Domain names are important because they provide a shortcut to websites online.
o All domain names map onto what are known as Internet Protocol (IP) addresses.
o For example, LSE has the following attributes :
 URL: [Link]
 Domain name: [Link]
 IP address: [Link].
o The inventor of HTTP, Tim Berners-Lee, describes its purpose as follows (Berners-
Lee, 1999):
 HTTP rules define things like which computer speaks first, and how they
speak in turn. When two computers agree they can talk, they have to find a
common way to represent their data so they can share it
 It is much easier to remember your favourite sites’ domain names than it is
to memorise the numerous IP addresses, which is what makes domain name
mapping so important.
 This mapping takes place as part of the Domain Name System (DNS) and is
fundamental to the internet’s architecture.
 Domain names are also important for companies from a marketing point of
view.
  Many companies view their portfolios of domain names as brand assets.
 Imagine how many domain names Coca-Cola, a global company with a very
recognisable brand, must register in all the different countries in which it
operates (e.g. [Link] [Link]
o [Link] [Link] and so on).

Web Technology
 Definitions
o World Wide Web (WWW)
 The most common technique for publishing information on the Internet. It is
accessed through web browsers which display web pages of embedded
graphics HTML/XML-encoded text.
o Hyperlink
 A method of moving between one web site page and another, indicated to
the user by an image or text highlighted by underlining and/or a different
colour
o Browser plug
 An add-on program to a web browser, providing extra functionality such as
animation.
o Browser extensions
 The capability of a browser to add new services through new add-ons or
plug- ins or customizing through different visual themes, particularly used in
Mozilla Firefox browser.
 The World Wide Web, or ‘web’ for short, has proved so successful since it provides a
standard method for exchanging and publishing information on the Internet.
 The main standard document format is HTML (Hypertext Markup Language), which can be
thought of as similar to a word-processing format such as that used for Microsoft Word
documents.
 This standard has been widely adopted since:
o it offers hyperlinks which allow users to move readily from one document or web
site to another – the process known as ‘surfing’;
o HTML supports a wide range of formatting, making documents easy to read on
different access devices
 It is the combination of web browsers and HTML that has proved so successful in
establishing widespread business use of the Internet.
 The use of these tools provides a range of benefits including:
o It is easy to use since navigation between documents is enabled by clicking on
hyperlinks or images.
o This soon becomes a very intuitive way of navigation which is similar across all web
sites and applications;
o Interactivity is supported by web forms which enable discussions through social
networks and purchase on e-commerce sites
o It can provide a graphical environment supporting multimedia which is popular the
users and gives a visual medium for advertising;
o The standardization of tools and growth in demand means information can be
exchanged with many businesses and consumers
 o Flexibility in the style of designs and tailoring them for using on different access
devices from desktop computers to wireless devices
 Browser capabilities are extensible through the use of browser plug-ins, extensions and
toolbars which enable users to access standard services
 Browser extensions and toolbars can be useful for site owners to add value through new
functionality and encourage continued usage of their services. Think of examples such as the
Google Toolbar ([Link]
 Web browsers are software such as Microsoft Internet Explorer and Mozilla Firefox which
we use to access the information on the WWW that is stored on web servers.
 Web servers are used to store, manage and supply the information on the WWW.
 The main web browsers are Microsoft Internet Explorer and Mozilla Firefox with the Apple
Safari browser and Google Chrome having relatively small market share. Browsers display
the text and graphics accessed from web sites and provide the interactions.
 Fig 2.8 Information Exchange between a web browser and a web server

 Figure 2.8 indicates the process by which web browsers communicate with web servers.
 A request from the client PC is executed when the user types in a web address, clicks on a
hyperlink or fills in an online form such as a search.
 This request is then sent to the ISP and routed across the Internet to the destination server
using the mechanism described in the section on protocols in networking standards, above.
 The server then returns the requested web page if it is a static (fixed) web page, or, if it
requires reference to a database, such as a request for product information, it will pass the
query on to a database server and will then return this to the customer as a dynamically
created web page.
 Dynamic web sites with e-commerce facilities are not created simply using static HTML
 They are implemented through additional functions defined in a web application framework
which use standard programming conventions or application programming interfaces (APIs)
in combination with data storage to achieve different tasks such as simply adding a user to a
system or rendering the different page elements of a site.
 They provide standard functions in libraries to make it quicker to develop functionality than
starting from lower-level coding.
 Functions in the web application framework are executed by a web application server which
comprises software processes running on the server which accepts requests via the principal
web server software (e.g. Apache or Microsoft Information Server).
 Information on each page request is stored in a transaction log file or web analytics system
which records the page requested, potential errors and the time it was made and the source
of the referral or originating site.
 The data collection method has significant management implications since it enables
analysis of the performance of e-business systems.
 This Transaction logs also contain information on errors which should be assessed to
determine problems with a service.
 The main management implication for changes in browser usage is ensuring sites have
appropriate browser compatibility.
 Browser compatibility
o Cross-browser compatibility is the capability of a site to render and deliver
interactivity correctly in different versions of web browsers, in particular the mot
popular browsers: Microsoft internet explorer, Mozilla Firefox, Apple Safari and
Google Chrome.
 Internet-access software applications
o Over its lifetime, many software tools have been developed to help find, send and
receive information across the Internet.
o Web browsers used to access the World Wide Web are the latest of these
applications
 These are summarized in Table 2.2.
Web2.0

 Recently there has been much discussion about the emergence of a new version of the web
– web 2.0.
 Proponents argue that there are important differences between the original web, first
popularised in the 1990s, and web 2.0.
 The original web was typically composed of static pages, written by a site’s owners or
administrators, and infrequently updated.
 In contrast, web 2.0 is said to run on dynamic, user-generated content. It is supposedly more
interactive and participatory than the old web, although critics continue to debate these
distinctions.
 The popular site Wikipedia, where users participate and collaborate to generate content, is a
notable example of the new wave of websites that rely on user- generated content and
governance.
 Other examples of web 2.0 type technologies include web logs (popularly known as ‘blogs’)
and social networking sites.
 These technologies present interesting opportunities and challenges for business and
society, we devote Chapter 8 of this subject guide to a more comprehensive discussion of
web 2.0.
 At this point, we will just consider the key technical issues
 Blogs and blogging
o ‘Blogs’ (web logs) give an easy method of regularly publishing web pages which are
best described as online journals, diaries or news or events listings.
o Many blogs provide commentary or news on a particular subject; others function as
more personal online diaries.
o A typical blog combines text, images, and links to other blogs, web pages, and other
media related to its topic.
o The capability for readers to leave comments in an interactive format is an
important part of many blogs.
o Feedback comments from other sites are also sometimes incorporated.
o Frequency can be hourly, daily, weekly or less frequently, but several updates daily
is typical.
o An example of a useful blog which can keep marketing professionals up-to-date
about business developments is the E-consultancy blog
([Link]/news-blog).
o Business blogs are created by people within an organization.
o They can be useful in showing the expertise of those within the organization, but
need to be carefully controlled to avoid releasing damaging information.
o An example of a business blog used to showcase the expertise of its analysts is the
Jupiter Research Analyst Weblogs ([Link]
o Services to enable blogging
o There are many free services which enable anyone to blog (for example
[Link] which was purchased by Google in 2003). Blogs were traditionally
accessed through online tools (e.g. [Link], [Link])
o From the technical perspective, web 2.0 is different in terms of the extent to which it
relies on certain new scripts and technologies.
o There are two in particular − Javascript and Ajax − which we note here. (Note that
you will not need to know how to use these for this unit.)
 Javascript
o Javascript is a scripting language used in web design to write functions that enhance
user interfaces and the dynamics of web pages.
o Javascript makes pages more interactive by permitting, for example, a web form to
validate that the information a user has entered into forms is acceptable before
submitting it to a server.
o Javascript is behind most of the pop-up boxes that we encounter online.
 AJAX
o Ajax stands for ‘asynchronous JavaScript and XML’ (don’t worry about remembering
that) and is a new approach to designing web applications.
o Ajax is actually a set of technologies, not a single technology, that work together to
retrieve data from servers ‘asynchronously’ (that is, with no timing requirements for
the transmission of data).
o It runs in the background and does not interfere with the display and behaviour of a
web page.
o Whereas a typical web 1.0 page would require you to click a link or submit a form
and then wait for a new page to load, Ajax allows users to update content on pages
without leaving the page.
o To give you an idea of how these technologies are being used, web applications such
as Googlemail and the photo-sharing site Flicker use Ajax, as does Amazon’s user-
rating system.
 Widgets
o Another web 2.0 technology that you should be aware of is the widget: a block of
executable code that is installed within web pages.
o Importantly, this code is reusable, often written by third parties, and its content is
‘live’ and dynamic.
o Widgets are what make on-screen tools such as clocks, stock market tickers and
flight arrival schedules possible.
o Widgets are different forms of tools made available on a web site or on a user’s
desktop.
o They are a relatively new concept associated with Web 2.0.
o They either provide some functionality, like a calculator or they provide real-time
information, for example on news or weather.
o Owners can encourage partners to place them on their sites and this will help
educate people about your brand.
o Widgets offer partner sites the opportunity to add value to their visitors through the
gadget functionality or content, or to add to their brand through association with
you (co-branding).
o Widgets are often placed in the left or right sidebar, or in the body of an article.
o They are relatively easy for site owners to implement, usually a couple of lines of
Javascript, but this does depend on the content management system.
o The main types of widgets are
 Web widgets. Web widgets have been used for a long time as part of
affiliate marketing, but they are getting more sophisticated, enabling
searches on a site, real-time price updates or even streaming video.
 Google gadgets. Different content can be incorporated onto a personalized
Google ‘iiGoogle’ home page.
  Desktop and operating system gadgets. Vista or Windows7 Microsoft
operating system makes it easier to create and enable subscription to these
widgets and place them into sidebars.
 Social media widgets. These encourage site visitors to subscribe to Really
Simple Syndication (RSS) or to bookmark the page on their favourite social
media site like Delicious, Digg or Technorati.
 RSS stands for Really Simple Syndication.
o Also called web feeds, RSS is a content delivery vehicle. It is the format used when
you want to syndicate news and other web content.
o When it distributes the content it is called a feed. You could think of RSS as your own
personal wire service.
o Examples: A TV show is created by one network (Law and Order) and then it is
shown on many other cable stations.
o A columnist writes one column and it is published in many newspapers.
o The benefit of syndication is that you get a much wider audience for your content.
 On the Web you create content for your website or newsletter
 With an RSS feed you can syndicate it to news aggregator websites or other sites that
publish similar content
 RSS Feeds are an excellent delivery vehicle for news content.
 "Even if it is something as simple as putting your press releases in an RSS feed, marketers will
benefit from early exposure to distributing information via RSS feeds." Forrester Research
 Visit [Link] for more information on RSS feeds

Peer-to-Peer Networks
 The traditional internet architecture is the client/server relationship, whereby user clients
rely on servers to transfer data across networks.
 However, there are other ways to configure network relationships online.
 One such innovative architecture is known as peer-to-peer (P2P) networking.
 P2P networks are composed of users, known as peers, who share their computing resources
with other peers, without the involvement of intermediaries such as network hosts or
servers.
 Peers are thus both suppliers and consumers of resources.
 P2P networks are ad-hoc networks in the sense that new nodes (peers) can be added or
existing ones removed without a significant impact on the performance of the network.
 These architectures are dynamic and distributed.
 Their distributed nature means that they are more robust than client/server configurations
as there is no single point of failure in the system.
 Figure 2.9 below shows the basic difference between the client/server and peer- to-peer
architectures.
 How do you think each model affects how organisations communicate, operate and
coordinate work?

 Fig 2.9 Client/Server and Peer-To-Peer Architecture

 A peer- to-peer
network allows two or more PCs to pool their resources together.
 Individual resources like disk drives, CD-ROM drives, and even printers are transformed into
shared, collective resources that are accessible from every PC.
 Unlike client-server networks, where network information is stored on a centralized file
server PC and made available to tens, hundreds, or thousands client PCs, the information
stored across peer-to-peer networks is uniquely decentralized.
 Because peer-to-peer PCs have their own hard disk drives that are accessible by all
computers, each PC acts as both a client (information requestor) and a server (information
provider).
 P2P networking was first popularised during the Napster1 period, when file- sharing first
took off, and has yet to lose pace.
 History shows us that these new internet architectures arguably revolutionised the
entertainment industry.
 While the use of peer-to-peer technology as a platform for distributing content such as
music and video is very significant to e-business, we must also consider the other business
models and technology applications that can take advantage of peer-to-peer architectures.
 For example, Skype, the successful start-up company providing a free software application to
make voice calls over the internet, runs on a P2P model.
 It uses P2P networks to transfer its Voice over Internet Protocol (VoIP) data from caller to
caller.
Mobile Computing and M-Commerce
 So far we have focused on information technologies in terms of personal computers.
 We typically think of computers as the machines that sit on our desks.
 However, recent developments in mobile phone technology mean that today’s mobile
phones are effectively computers.
 This is interesting because it means that most of us have computers with us wherever we
are.
 This realisation has led analysts to begin exploring the idea of mobile commerce, or m-
commerce.
 Mobile commerce or m-commerce – definition
o Electronic transactions and communications conducted using mobile devices such as
laptops, PDAs and mobile phones, and typically with a wireless connection.
o Mobile commerce (m-commerce) refers to the use of wireless devices such as
mobile phones for both informational and monetary transactions.
 Adoption and potential for mobile commerce around the world :
o More than 1 billion mobile phones were sold in 2007
o It took 12 years to get to 1 billion GSM connections and just 30 months to get to 2
billion
o There are 1.2 million new GSM connections every day
o Nearly 7 billion text messages are sent every day.
 Popularity of mobile applications
o Mobile technologies have been touted for many years as the future for Internet
access.
o They are widely used, but primarily for text messaging within Europe and the US.
Mobile phones are important in terms of paid content services due to their
popularity in some countries such as Japan.
o They distribute more content ($31 billion) than the total global content on the
Internet ($25 billion led by pornography and gambling) and more than Hollywood
Box Office’s annual $30 billion (Ahonen and Moore, 2007).
o The benefits that mobile or wireless connections offer to their users are ubiquity
(can be accessed from anywhere), reachability (their users can be reached when not
in their normal location) and convenience (it is not necessary to have access to a
power supply or fixed-line connection).
o Popularity of mobile applications
o In addition to these obvious benefits, there are additional benefits that are less
obvious:
 they provide security – each user can be authenticated since each wireless
device has a unique identification code;
 their location can be used to tailor content;
 and they provide a degree of privacy compared with a desktop PC – looking
for jobs on a wireless device might be better than under the gaze of a boss.
o An additional advantage is that of instant access or being ‘always-on’ ; here there is
no need to dial up a wireless connection.
o There are considerable advantages in comparison to PC-based Internet access, but it
is still limited by the display limitations such as small screen size and limited
graphics.
 o There are a wide range of products and services that open up when we begin to
treat the mobile phone as a networked computer:
 Mobile ticketing – the replacement of paper tickets with electronic tickets
that can be sent to a mobile phone or personal data assistant(PDA) via a text
message or short message service (SMS).
 Mobile vouchers – offering discounts to customers directly through their
mobile phones. When combined with location-based services, mobile
vouchers can be sent to customers as they pass certain retail areas.
 Location-based services – mobile phone service providers constantly
triangulate a user’s location in a certain area and this location data can be
used for marketing purposes (e.g. directing customers to a particular
restaurant nearby).
 Mobile banking – using mobile phones to conduct basic banking activities
such as transfers, balance checks and payments.
 Mobile marketing and advertising – marketing directly to customers
through their mobile phones.

Technologies for supply chain management

 As well as general-purpose technologies and architectures, e-business technologies are also
applied in more specific situations; for example, in supply chain management.
 When extranets are used to coordinate and manage supply chains, they often involve
electronic data interchange (EDI).
 EDI is a generic term that refers to the structured exchange of data or documents between
organisations using information technology.
 It is a format that pre-dates the internet, with various international technical standards.
 Despite the current use of innovation that has taken place in e-business over the past couple
of decades, the EDI format is still widely used by many companies in their supply chain
activities.
 Radio frequency identification (RFID) is a so-called ‘automatic identification’ technology,
which permits the identification of items without direct human intervention.
 Its predecessor, bar coding technology, relied on line-of-sight transmission of data along the
supply chain and often required human beings to intervene in the process.
 By using radio signals, RFID can automate the product identification process
 RFID promises many benefits to supply chain management.
 RFID offers many potential advantages over previous supply chain technologies.
 By automating the process, it can reduce labour costs.
 The RFID tags themselves allow significantly larger amounts of data to be stored on the
products (e.g. serial number, colour, size, price), leading to better intelligence along the
supply chain.
 The tags increase inventory visibility for partners and improve response times to customer
demands and market trends.
 RFID also permits asset tracking, which can help reduce shrinkage and, in the case of a
product being recalled, allows partners to locate and remove faulty goods quickly.
 Depending on how it is implemented, RFID can help facilitate item-level tracking, whereby
tags are stored in each individual product (as opposed to pallet or case-level tracking).
 Item-level tracking opens up many opportunities for increased intelligence along the supply
chain, for example in terms of theft detection, stock monitoring and product customisation.
 However, a decision to implement RFID at the item-level must be carefully considered.
 RFID tags can be expensive, although prices are decreasing as the technology matures.
 Consider that at any given time, there are thousands − if not millions − of products moving
along the typical supply chain, and you will see that the technology costs can accumulate
quickly.
 The reliability of RFID is also a concern, as certain metals interfere with the radio frequencies
used by RFID.
 Thus, managers in some industries need to understand these technical limitations before
choosing RFID for managing supply chains.
 For example, motorcycles are built with various metal components, and so item- level RFID
may prove problematic for their supply chains.
 To read more about RFID, please refer to Angeles (2005).
 Angeles, R. ‘RFID technologies: supply chain applications and implementation issues’,
Information Systems Management, 22 (1) (2005), pp.51−65.
 Rubee is a similar technology to RFID, with some important differences.
 Whereas RFID relies on radio signals to transmit data, Rubee uses magnetic signals, enabling
it to transmit data through both metal and liquid.
 This makes Rubee useful for the harsh environments where RFID often fails, for example in
warehouses where there are lots of metal structures.
 However, despite this major advantage, there are disadvantages to using the technology,
including slow data transmission speeds and small packet sizes.
 Its relatively slow speeds make Rubee unsuitable for the warehouse environment where
many products are moving rapidly through the building.
 Nonetheless, it is a technology that businesses are closely watching as a potential supply
chain game-changer.
 The advantages and disadvantages of using RFID or Rubee will always depend on the
particular implementation.
 Organisations have different business objectives which affect their supply chain strategy.
 If speed or quality of product information is a concern, then perhaps RFID is a good option
for supply chain managers.
 If keeping costs low or minimising information technology investment is a priority, then
perhaps RFID is not the best way forward.
 In such a case, sticking with legacy bar code systems, for example, might make the best
business sense.
 Or perhaps an older EDI-based system is best.
 In 2011, RFID is being introduced into various industries, such as fashion, clothing and fast-
moving consumer goods (FMCG)
 But it is not in general use yet as, for example, some industries are still developing
appropriate standards that are essential for communication.
 Managing e-business applications infrastructure
o A software technology that is particularly important to large organisations, both
internally and for communicating along the supply chain, is that of enterprise
resource planning (ERP) systems.
o These are large, complex suites of software that serve to integrate the various
common functions (e.g. accounting, production, human resources) and data of an
organisation.
o Considered as internal systems, these are of limited interest to e-business, which is
fundamentally inter-organisational.
o However, using EDI protocols and extranets, the ERP systems of the companies
along the supply chain can be connected together and hence can ‘talk to each other’
in order to provide seamless communication between the various departments of
different companies.
o Cisco’s supply chain, for example, depends upon interconnected ERPs.
o Management of the e-business applications infrastructure concerns delivering the
right applications to all users of e-business services.
o The issue involved is one that has long been a concern of IS managers, namely to
deliver access to integrated applications and data that are available across the whole
company.
o Traditionally businesses have developed applications silos or islands of information,
as depicted in Figure 2.10(a).
o Figure 2.10(a) Fragmented Applications Infrastructure

o This shows that these silos may develop at three different levels:
 there may be different technology architectures used in different functional
areas
 there will also be different applications and separate databases in different
areas
 processes or activities followed in the different functional areas may also be
different.
o These applications silos are often a result of decentralization or poorly controlled
investment in information systems, with different departmental managers selecting
different systems from different vendors.
o This is inefficient in that it will often cost more to purchase applications from
separate vendors
o It will be more costly to support and upgrade.
o Even worse is that such a fragmented approach stifles decision making and leads to
isolation between functional units.
o An operational example of the problems this may cause is if a customer phones a
B2B company for the status of a bespoke item they have ordered, where the person
in customer support may have access to their personal details but not the status of
their job, which is stored on a separate information system in the manufacturing
unit.
o Problems can also occur at tactical and strategic levels.
o For example, if a company is trying to analyse the financial contribution of
customers, perhaps to calculate lifetime values, some information about customers’
purchases may be stored in a marketing information system, the payments data will
be stored in a separate system within the finance department.
o It may prove difficult or impossible to reconcile these different data sets.
o To avoid the problems of a fragmented applications infrastructure, companies
attempted throughout the 1990s to achieve the more integrated position shown in
Figure 2.10(b).
o Here the technology architecture, applications, data architecture and process
architecture are uniform and integrated across the organization.
o To achieve this many companies turned to enterprise resource planning (ERP)
vendors such as SAP, Baan, PeopleSoft and Oracle. Refer to Fig 2.11.
o Figure 2.10(b) Integrated Applications Infrastructure
 o Fig 2.11. Oracle’s ERP Package

  The approach of integrating different applications through ERP is entirely consistent

with the principle of e-business
 E-business applications must facilitate the integration of the whole supply chain and value
chain.
 Many of the ERP vendors such as SAP have repositioned themselves as suppliers of e-
business solutions!
 The difficulty for those managing e-business infrastructure is that there is not, and probably
never can be, a single solution of components from a single supplier.
 For example, to gain competitive edge , companies may need to turn to solutions from
innovators who, for example, support new channels such as Wireless Application Protocol
(WAP), or provide knowledge management solutions or sales management solutions.
 If these are not available from their favoured current supplier, do they wait until these
components become available or do they attempt to integrate new software into the
application?
 Thus managers are faced with a precarious balancing act between standardization or core
product and integrating innovative systems where applicable.
 Figure 2.12 illustrates this dilemma.
 Figure 2.12 Differing Use of applications at levels of management within companies
 It shows how different types of applications tend to have strengths in different areas.
 ERP systems were originally focused on achieving integration at the operational level of an
organization.
 Solutions for other applications such as business intelligence in the form of data
warehousing and data mining tended to focus on tactical decision making based on
accessing the operational data from within ERP systems.
 Knowledge management software also tends to cut across different levels of management.
 Figure 2.12 only shows some types of applications, but it shows the trial of strength between
the monolithic ERP applications and more specialist applications looking to provide the same
functionality.

 Figure 2.13 summarizes some of the management issues with applications infrastructure at
the top and technology infrastructure towards the bottom.
Security Technologies for e-business
 Security is one of the most important considerations in modern networked systems
 This is because the exchange of sensitive information is on the increase
 Therefore measures need to be taken to mitigate this risk so as to keep this information
confidential
 In order to achieve this we use cryptography – a way of encoding data such that it appears
meaningless to unauthorised persons reading it
 Secrecy (or confidentiality) ensures that information flow between the sender and the
receiver is unintelligible to outsiders
 This can be achieved by using cryptography
 Cryptography deals with the design of algorithms, protocols and systems which are used to
protect information against specific threats
 An encryption algorithm takes a piece of information (the message or plaintext) and
translates it into a cryptogram (or ciphertext) using a secret cryptographic key
 Decryption is the reverse operation to encryption
 The receiver who holds the correct secret key can recover the message (plaintext) from the
cryptogram (ciphertext)
 Private-key or symmetric cryptosystems use the same key for encryption and decryption
 The key must therefore be kept secret by both parties
 Public-key or asymmetric cryptosystems use different keys for encryption and decryption
 The knowledge of one key does not compromise the other
 Authentication
o Authentication is the process of proving one’s identity to someone else.
o It is different from digital signatures
o This includes proving that this is a ‘live’ identity (and not a replay of a past session)
o To prove the latter, we need to use a unique value for each session.
o This means that a previous session’s authentication is useless for re-use in a new
session.
o This is done by passing a nonce which is a number uniquely generated by an
authentication protocol once in the lifetime of authentication.
o Encrypting the nonce does the trick!
 Message Integrity
o Signatures are used for message integrity.
o These are:
 Verifiable (i.e. can prove who signed message)
 Non-forgeable
 Non-repudiable (i.e. person who signed the message cannot later say that
s(he) did not)
 In the digital world, their equivalent is given by digital signatures which are
easy to implement using public key cryptography
o Data security is a top concern for organisations, especially as they continue to invest
in new e-business technologies.
o One important way to secure data is by encrypting it.
o Based on cryptography, encryption is the process of using algorithms (detailed sets
of instructions) to make information unreadable to anyone except those who have
special knowledge in the form of a ‘key’.
 o This key makes information readable again, through a process called decryption.
o Encryption can be used to protect data as it moves around networks or while it sits
on storage devices.
o Businesses can use encryption in different ways.
o We’ve already mentioned VPNs, which often use encryption techniques.
o VPNs work by sending data through ‘tunnels’ over a shared public infrastructure,
such as the internet.
o Other data cannot enter these tunnels unless they are also appropriately encrypted.
o VPNs are commonly used by employees of firms who are temporarily away from
their home office, for example consultants at a client’s site, to gain access to the
company’s internal networks.
o Another business application that uses encryption is the digital signature.
o These are not actually signatures in the normal sense, but rather a way of using
mathematical techniques to secure digital messages or documents.
o Digital signatures provide assurances to the recipient that a message is from a
known sender, and that it has not been tampered with.
o These can be used in financial transactions or other environments where protection
against fraud and forgery is important.
o Transport layer security (TLS) and secure sockets layer (SSL) are protocols for
transmitting information privately over the internet.
o These protocols have many important B2C applications.
o For example, many websites use them to collect sensitive information such as credit
card numbers during online transactions.
o TLS and SLS use cryptographic techniques to allow client/server applications to
communicate data so that the data are impossible to eavesdrop on or tamper with.
o You might be familiar with these protocols.
o If you’ve ever noticed how certain URLs start with ‘[Link] then you have
experienced SSL in action.
o We pick up on these security technologies again in Chapter 10 of this subject guide,
where we elaborate on them and also consider how organisational, social, legal and
institutional aspects of information security complicate e- business.

Conclusion
 This chapter provides an overview of the main technological architectures for e-business.
 It describes the basic technological infrastructures which enable network technologies and
explains how different protocols enable and support these architectures.
 Specific emphasis is given to the discussion of supply chain management technologies and to
emerging phenomena, such as web 2.0.
 Security challenges and problems are introduced.
 Most of the aspects discussed in this chapter will be complemented by additional material
presented in the following chapters.
 This chapter provides an introduction to the background technological knowledge needed to
understand more specific aspects of e-business discussed elsewhere in the subject guide.