CHAPTER 4
COMMON BUSINESS APPLICATIONS OF
INFORMATION TECHNOLOGY
by; Walelign G.
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INTRODUCTION
• As a manager, you will want to know how
your firm can benefit from e-business and e-
commerce.
• In this chapter you will learn
– how the Internet is creating a universal technology
platform for
• buying and selling goods and
• driving important business processes inside the firm.
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4.1 ELECTRONIC COMMERCE
• Electronic commerce (e-commerce) describes
the process of buying, selling, transferring, or
exchanging products, services, and/or
information via computer networks, including
the Internet.
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Categories of e-commerce
• Based on the nature of the participants in the
electronic commerce transaction:
1. business-to-consumer (B2C) e-commerce,
2. business-to-business (B2B) e-commerce, and
3. consumer-to-consumer (C2C) e-commerce
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Categories of e-commerce…..
1. Business-to-consumer (B2C) involves retailing
products and services to individual shoppers.
2. Business-to-business (B2B) involves sales of
goods and services among businesses..
3. Consumer-to-consumer (C2C) involves
consumers selling directly to consumers.
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Customer-Centered Retailing
• The Internet provides companies with new
channels of communication and interaction
with customers in sales, marketing, and
customer support.
• Companies can use the Web to provide
ongoing information, service, and support,
creating positive interactions with customers
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DIRECT SALES OVER THE WEB
• Manufacturers can sell their products and services
directly to retail customers, bypassing
intermediaries such as distributors or retail outlets.
• Eliminating intermediaries in the distribution
channel can significantly lower purchase transaction
costs.
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FIGURE 4-2
The benefits of disintermediation to the consumer
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INTERACTIVE MARKETING AND
PERSONALIZATION
• Marketers are using the interactive features of
Web pages to hold consumers’ attention or to
capture detailed information about consumer
tastes and interests.
• Then the company can use it to tailor
promotions, products, services, and pricing.
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Business-to-Business E- Commerce:
• Today, about 80 percent of B2B e-commerce is based
electronic data interchange (EDI).
• EDI enables the computer-to-computer exchange
between two organizations of standard transactions,
such as invoices, bills of lading, shipment schedules,
or purchase orders.
• Transactions are automatically transmitted from one
information system to another through a network,
eliminating the printing and handling of paper at one
end and the inputting of data at the other.
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E- Commerce Payment Systems
• Electronic payment systems for the Internet
include systems for
– credit card payments,
– digital cash,
– accumulated balance digital payment systems,
– stored value payment systems,
– peer-to-peer payment systems,
– electronic checks, and
– electronic billing presentment and payment
systems.
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4.2. ELECTRONIC BUSINESS
• E-business refers to a broader definition of E-
Commerce, not just the buying and selling of
goods and services, but also servicing
customers, collaborating with business partners,
conducting e-learning, and conducting
electronic transactions within an organization.
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E-BUSINESS …..
• Although companies have used internal
networks for many years to manage and
coordinate their business processes, intranets
quickly are becoming the technology of choice
for electronic business.
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How Intranets Support E-Business
• intranets provide instant connectivity, uniting all computers into
a single, virtually seamless, network system.
• Web software presents a uniform interface, which can be used
to integrate many different processes and systems throughout
the company.
• Companies can connect their intranets to internal company
transaction systems, enabling employees to take actions central
to a company’s operations.
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INTRANETS AND GROUP COLLABORATION
• Intranets provide a rich set of tools for creating
collaborative environments in which members of an
organization can exchange ideas, share information, and
work together on common projects and assignments
regardless of their physical location.
• Information from many different sources can be displayed,
shared, and accessed across an enterprise through a simple
common interface
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