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Management Information Systems,
Sixth Edition
Chapter 8:
The Web-Enabled Enterprise
Objectives
• Describe how the Web and high-speed Internet
connections are changing business operations
• Explain the functionality of various Web
technologies
• Compare and contrast options for Web servers
• Explain basic business-to-business and
business-to-consumer practices on the Web
• Explain the relationship between Web
technologies and supply chain management
Management Information Systems, Sixth Edition 2
Objectives (continued)
• Give examples of features and services that
successful business Web sites offer
• Learn about online annoyances such as spam
and adware, and how to protect against online
identity theft
Management Information Systems, Sixth Edition 3
Web Business: Growing and Changing
• DLA Piper LLP is the second largest law firm in
the world
– 3200 lawyers in 24 countries and 63 offices
around the world
– Uses eRoom, a Web-based collaboration and
document-sharing tool from EMC Corp.
– Saves 15,000 labor hours annually, uses and
mails significantly fewer paper documents, and
reduces redundant work
Management Information Systems, Sixth Edition 4
Web Technologies: A Review
• Several standards and technologies enable the
Web to deliver rich information, including:
– HTTP, HTML, XML
– File Transfer
– RSS
– Blogs
– Wikis
– Podcasting
– IM
– Cookies
Management Information Systems, Sixth Edition 5
HTTP
• Hypertext Transfer Protocol (HTTP): transfer
and download Web information
• HTTPS: HTTP secure for confidential data
exchange
• Uniform Resource Locator (URL): unique
address given to each Web site
– IP address: a special numeric address
• Domain name: unique name for a Web site,
constructed with letters
– URL also refers to the domain name
Management Information Systems, Sixth Edition 6
HTML and XML
• Hypertext Markup Language (HTML): helps
developer create Web pages
– Determines look and location of content
• Extensible Markup Language (XML): enables
creation of various data types
– Conveys the meaning or content of the data
• XHTML: combination of XML and HTML
– Uses opening and closing tags to control format
Management Information Systems, Sixth Edition 7
Management Information Systems, Sixth Edition 8
File Transfer
• File Transfer Protocol (FTP): used to transmit
whole files
– Used in all downloads from Web sites
– Any type of file can be transferred
– Can place files on a server for shared use
– Often used to deliver purchased software
products on Web sites
Management Information Systems, Sixth Edition 9
RSS
• Really Simple Syndication (RSS): family of
XML file formats that allow automatic downloads
of content on a subscription basis
– Helps users check for updates
– Communicates short descriptions of content
– Allows transmittal of new information
– Useful on news Web sites
– Also called Rich Site Summary
Management Information Systems, Sixth Edition 10
Blogs
• Blog: contraction of “Web log”
– Invites surfers to post opinions and art
– Focuses on a topic or set of topics
– Trackback: a tool that notifies bloggers when
their posts have been mentioned elsewhere on
the Web
• Blogs are often used by businesses
• Importance of blogs to commercial organizations
is to find out what blog participants think and say
about the organization
Management Information Systems, Sixth Edition 11
Wikis
• Wiki (from Hawaiian, meaning “quick”): Web
application that enables users to add to and edit
the contents of Web pages
– All the software required to edit the Web pages is
embedded in the pages themselves
• Wikipedia: a popular online encyclopedia
• Wiki technology is a popular ingredient in
groupware (software used for collaboration)
Management Information Systems, Sixth Edition 12
Management Information Systems, Sixth Edition 13
Podcasting
• Podcast: publishing sound and video on the
Web for download
– Usually on a subscription basis
• Uses include:
– “Time-shifted” broadcast of radio station
programs for later listening
– Audio tours in museums
– Lectures in distance learning courses
– Garageband.com
• Allows aspiring musicians to post music tracks
Management Information Systems, Sixth Edition 14
Instant Messaging
• Instant messaging (IM): real-time chat
– Form of synchronized e-mail
– Chat room: communicate with a group
– Free applications for IM include:
• AIM: AOL instant Messenger
• Yahoo Messenger
• MSN Messenger
• ICQ
• Trillian
– Business uses
• Customers can chat with sales or support reps
Management Information Systems, Sixth Edition 15
Management Information Systems, Sixth Edition 16
Cookies
• Cookie: small file that stores information about a
Web site visitor, stored on the visitor’s computer
– Usually records the surfer’s ID
– Often stores the surfer’s preferences
– Provides convenience to consumers
– Can be temporary (single session) or permanent
– Potential for intrusion into surfer privacy
• Clickstream tracking: tracks a surfer’s clicking
activities
• Spyware: traces and reports online behavior
Management Information Systems, Sixth Edition 17
Proprietary Technologies
• Proprietary technology: intellectual property of
developer, not free for all to use
• Examples:
– Local search engine
– Shopping cart applications
– Wish lists
– Video streaming tools
– Tools to analyze and predict Web visitor
behavior, especially shopper behavior
Management Information Systems, Sixth Edition 18
Web-Enabled Business
• Web-enabled business are classified according
to the interacting parties:
– Business-to-business (B2B)
– Business-to-consumer (B2C)
– Government-to-business
– Government-to-consumer
Management Information Systems, Sixth Edition 19
B2B Trading
• Business-to-business (B2B): trading between
businesses only
• B2B forms include advertising through:
– Search advertising: advertisements placed on a
search site result page
– Banners: images placed on Web sites that link to
a company site selling a product or service
• Impression: occurs when a page with a banner
is downloaded
• Reach percentage: the percentage of Web
users who visited a site in the past month
Management Information Systems, Sixth Edition 20
Management Information Systems, Sixth Edition 21
B2B Trading (continued)
• Exchanges and auctions act as online
marketplaces
• Intranet: network used only by employees of an
organization
• Extranet: network shared by employees of
different organizations, usually business partners
• Exchange: extranet for organizations that deal in
products and services of a particular type
– Exchange operator profits from transaction fees
• Auction: sells a great variety of items
Management Information Systems, Sixth Edition 22
Management Information Systems, Sixth Edition 23
B2B Trading (continued)
• Online business alliances: collaboration
between businesses in establishing a Web site
– Site operator works for the allied companies
– Suppliers are invited to sell through the site and
compete among themselves, driving prices down
Management Information Systems, Sixth Edition 24
B2C Trading
• Business-to-consumer (B2C): trading with the
general public
• E-Tailing: online retailing to consumers
• Fulfillment activities: picking, packing, shipping
• Consumer profiling: know customers better by
gathering information about their online activities
– Some consider this a violation of privacy
• Conversion rate: the proportion of site visitors
who make a purchase
Management Information Systems, Sixth Edition 25
Management Information Systems, Sixth Edition 26
Management Information Systems, Sixth Edition 27
B2C Trading (continued)
• Auction sites serve as a hub for consumers to
buy and sell
• Reverse auction: customers name their own
price for desired goods and services
• Content providers: offer information, artistic
work, classified ads, and video
• Electronic bill presentment and payment
(EBBP): provides online bills and payment
options for customers
• Phishing: type of fraud involving a fake Web
site
Management Information Systems, Sixth Edition 28
Management Information Systems, Sixth Edition 29
Management Information Systems, Sixth Edition 30
B2C Trading (continued)
• Extra-organizational workforce:
– Companies purchase labor from a larger pool
• Mobile commerce, or M-commerce:
– Business conducted on mobile devices
• Many experts believe that information delivery is
the main mobile application, not commerce
– Exceptions are Japan and South Korea
– Japan’s DoCoMo’s i-mode service allows users of
smart cell phones to purchase canned soda from
vending machines, fast food
Management Information Systems, Sixth Edition 31
B2C Trading (continued)
• M-commerce also raises privacy concerns
– GPS provides location tracking
• New top-level domain names with .mobi
available for mobile applications
– Sites should use special technologies to optimize
content for easy viewing on mobile devices
• Virtual world: a combination of images, video,
sound, and avatars that resemble the real world
– Accessible for interaction by subscribers
• Avatar: 3D graphical character that represents a
user in a virtual world
Management Information Systems, Sixth Edition 32
Supply Chains on the Web
• Supply chain management (SCM) systems may
be connected to the Web to allow suppliers to
participate directly
– Use of XML allows companies to set standards
for data exchange
• Electronic Data Interchange (EDI): a system
used prior to the Web to exchange documents
electronically
– Set standards for data formats
– EDI networks are owned and managed by value-
added network (VAN) companies
Management Information Systems, Sixth Edition 33
Management Information Systems, Sixth Edition 34
Options in Establishing a Web Site
• Web site: Web pages that make up information
and links
• Internet server: a computer connected to the
Internet backbone
• Businesses have two choices for a Web site:
– Installing and maintaining their own Web servers
– Contracting with a Web hosting service
Management Information Systems, Sixth Edition 35
Owning and Maintaining a Server
• Owning and maintaining Web servers is costly
– Provides the greatest degree of control, but
requires expertise to set up and maintain
– Must obtain a high-speed link to the Web
• Load balancing: transfer data requests from a
busy server to a less busy server
• Mirror servers: servers with duplicated content
• Pure-play: company whose entire business is
online
• Brick-and-mortar: company that owns physical
stores and a Web site
Management Information Systems, Sixth Edition 36
Using a Hosting Service
• Web hosting: Web server managing service
• Several types of Web hosting:
– Shared hosting: stores the client’s Web site on
the same physical server as other clients
– Virtual private hosting: simulates a single server,
allowing a client to have its own domain name
– Dedicated hosting: client has exclusive use of an
entire physical Web server
– Co-location: server owned and managed by a
client is co-located with other clients’ servers in a
secure physical location
Management Information Systems, Sixth Edition 37
Considerations in Selecting
a Web Host
• Compare host vendors using a point system
• Dynamic Web pages: enable communication
between browser and database
• Factors to consider when selecting Web host:
– Allows use of database management system
– Storage space capacity
– Technical and Web site design support
– Scalability
– Security: physical and virtual
Management Information Systems, Sixth Edition 38
Considerations in Selecting
a Web Host (continued)
• Factors to consider when selecting Web host
(continued):
– Availability: minimize downtime
– Costs, including:
• Setup fees
• Traffic-based fees
• Monthly fees
Management Information Systems, Sixth Edition 39
Management Information Systems, Sixth Edition 40
More Than Meets the Eye
• Several elements are essential to conducting
business on the Web:
– Inquiry interface: connects to database to allow
user to search a catalog of products or services
– Order processing application, including:
• Credit-card verification application
– Order-fulfillment system: picks, packs, and ships
Management Information Systems, Sixth Edition 41
Management Information Systems, Sixth Edition 42
Rules for Successful
Web-Based Business
• Business success depends on availability and
use of software
• Elements needed to support B2C commerce:
– Targeting customers
– Capturing the customer’s complete experience
– Personalizing the service
– Shortening the business cycle
– Let customers help themselves
– Be proactive and de-commoditize
Management Information Systems, Sixth Edition 43
Target the Right Customers
• Target customers needing your products and
services
– Most important effort of marketing
• Involves identifying the sites that your audience
frequently visits
• Consider blogs and podcasting sites for
advertisement placement
Management Information Systems, Sixth Edition 44
Capture the Customer’s Total
Experience
• Use cookies to record shopper’s movements
within the site
• Use CRM software to create consumer profiles
• Shopper experience becomes an asset of
business, allowing:
– Fine-tuning of the product portfolio
– Tailoring of Web pages to individual customers
– Individual e-mails to shopper offering products of
interest
Management Information Systems, Sixth Edition 45
Personalize the Service
• CRM software and Web page customization
software can be combined to:
– Personalize Web pages shown to a customer
– Allow the customer to select the type of e-mail
content desired
– Respect visitor privacy by offering opt-in rather
than opt-out
– Allow the customer to tailor products to be
purchased
Management Information Systems, Sixth Edition 46
Shorten the Business Cycle
• Business on the Web saves time for customers
• Fulfillment is a major challenge for businesses
– Activities after customer places order
• Fast shipping is desired because:
– It produces higher customer satisfaction
– Business collects payments faster
• Can outsource the entire fulfillment task to
fulfillment organizations such as:
– UPS’s e-Logistics
– FedEx’s Supply Chain Services
Management Information Systems, Sixth Edition 47
Let Customers Help Themselves
• Customers need information from organization:
– Status of order
– Status of shipped item
– Installation instructions
– Troubleshooting
• E-mail messages sent to customers with
information about orders and how to track them
• FAQs online allow customers to find answers to
common questions
Management Information Systems, Sixth Edition 48
Be Proactive and De-Commoditize
• Prompt e-mail replies expected
• Proactive alerts expected for changes in orders
or services, or product recalls
• Automatic reordering features are desirable
• Must take initiatives to de-commoditize products
– Commodity: a product sold at roughly the same
price by many vendors (no differentiation)
– Addition of features or services prevents a
product from becoming a commodity by creating
differentiation
Management Information Systems, Sixth Edition 49
E-Commerce is Every Commerce
• Web technologies have been highly integrated
into the business world
– Difficult to identify which business activities are
on the Internet and which are not
• Web has been highly integrated into daily
activities of customers also
• Commerce and e-commerce generally have the
same meaning today
Management Information Systems, Sixth Edition 50
Summary
• Some industries have changed drastically
because of the Web
• HTTP is an Internet standard controlling Web
server addresses
• HTTPS is a security version of HTTP
• XML is a standard for description of data
• Blogs enable people to create discussion Web
pages
Management Information Systems, Sixth Edition 51
Summary (continued)
• Cookies help Web sites personalize the visitor’s
experience
• Many Web technologies are proprietary
• A business can maintain its own Web server or
use a Web hosting service
• Organizations should consider several factors
when selecting a Web host
• Web-enabled commerce is classified into B2B
and B2C
Management Information Systems, Sixth Edition 52
Summary (continued)
• B2B trading relies on electronic data interchange
(EDI) and XML
• Wireless handheld computers allow mobile
commerce, called m-commerce
• Online businesses must adhere to several factors
to be successful
• Virtual worlds provide a means to meet and
conduct business and social activities on the Web
• Spam and spyware are online annoyances
• Phishing is a pervasive fraud crime
Management Information Systems, Sixth Edition 53
