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Workshop in Electronic Commerce
Presented by:
Dr. Kelly Burke – UH Hilo School of Business
Dr. Eric Jeschke – UH Hilo Computer Science Department
Funded by:
Department of Business, Economic Development, and Tourism
University of Hawaii Hilo School of Business
Workshop in Electronic Commerce
Objectives The WWW Payment
Business Problem Planning Marketing
EC Models Getting Started Infrastructure
EC Levels Site Design Site Performance
Facts and Forces Security Wrap Up
Kelly Burke
Previous Next University of Hawaii at Hilo
Workshop Objectives
You are planning to establish an eBusiness in the
future
Whether you intend to:
Plan and develop the site yourself
Have an employee plan and develop the site
Plan the site and have an ISP/Host develop it
Have an ISP/Host plan and develop the site
You need to understand
what Electronic Commerce is,
how it works,
how to plan and manage it.
Kelly Burke
Previous Next University of Hawaii at Hilo
Workshop Objectives
What is EC?
What forms can EC take?
How can EC help?
How do I get started?
How do I build a simple web page?
What is involved in building a full web site?
Kelly Burke
Previous Next University of Hawaii at Hilo
Workshop Objectives
What are my options for doing E-Commerce?
What software and hardware do I need?
What makes a good web site?
How do I market my site?
What concerns should I have for security?
How can I settle transaction payment?
What future issues should I be aware of?
Kelly Burke
Previous Next University of Hawaii at Hilo
Defining Electronic Commerce
Use of electronic communications facilities to
conduct any part of a business (internal or
external) transaction.
Kelly Burke
Previous Next University of Hawaii at Hilo
Business Problem
The world is attracted to the possibility of
doing EC
Media frenzy (business publications)
Appears easy (seems like every one has a
computer)
Appears glamorous (look at the tech IPOs)
Everyone is doing it / we can’t afford to miss out!!
Opportunity is SEDUCTIVE
Kelly Burke
Previous Next University of Hawaii at Hilo
Business Problem
Gartner group advises online companies to beware
Within 2 years, 95 % of online dot.coms will fail
e.g., boo.com
e-Toys layoffs
Misuse or misreading of opportunity can be costly
e.g., Nor-Cal EMS experience – long term ―ill will‖
Lesson: opportunity without understanding and
prioritization of objectives = problem
Implementation and Integration with business processes
ARE King
e.g., Northwest and United Airlines fare wars
Kelly Burke
Previous Next University of Hawaii at Hilo
Models and Applications
for E-Commerce
Models of Electronic Commerce
Inter-organizational (B2B)
EDI, supply-chain interaction, etc.
Intra-organizational (B2E or BinB)
E-portals, Lotus notes, etc.
Business-to-consumer (B2C)
Direct marketing, e-malls, etc.
Kelly Burke
Previous Next University of Hawaii at Hilo
Models of Electronic Commerce
Consumer-to-consumer, peer-to-peer (C2C,
P2P)
Auctions, electronic flea markets, etc.
E-marketplaces
Exchanges
Non-business
On-line communities (Geocities), news groups
Kelly Burke
Previous Next University of Hawaii at Hilo
Taxonomy of Applied Business
Models
Brokerage (http://globalsources.com/)
Advertising (http://www.altavista.com/)
Infomediary (http://www.job-search-engine.com/)
Merchant (http://www.etoys.com/)
Manufacturer (http://www.hp.com/)
Affiliate (http://s1.amazon.com/)
Community (http://geocities.yahoo.com/)
Subscription (http://prodigy.com/)
Utility (http://prodigy.com/)
Kelly Burke
Previous Next University of Hawaii at Hilo
E-Business Initiatives
E-Commerce— selling more goods via the Web
E-care for customers— providing all kinds of customer
support on-line
E-care for business partners— dedicated services
providing faster, better information for these important groups
E-care for employees— improving their effectiveness by
making the right information and services available to them
Kelly Burke
Previous Next University of Hawaii at Hilo
E-Business Initiatives
E-procurement— working closely with
customers and suppliers to improve the
tendering process and to better administer
the huge number of transactions involved
E-marketing communications— using
the Internet to better communicate marketing
stance
Kelly Burke
Previous Next University of Hawaii at Hilo
Electronic Commerce:
Planning Framework
Management
Strategy, planning, resources, monitoring
Infrastructure
Business services, information transfer, content, networks,
interfaces
Environmental constituents
People, policies, technical standards, stakeholder
organizations
Business applications
Catalogs, banking, procurement, auctions
Kelly Burke
Previous Next University of Hawaii at Hilo
Planning Your EC Path:
Levels* of E-Commerce Development
Minimal online presence
On-line catalog
On-line transactions
Automated value chain
Market site
Super market site
*Adapted from www.dotcomadvisor.com – 2000 Kelly Burke
Previous Next University of Hawaii at Hilo
Level I E-Commerce Development:
Minimal
Motivation
General pressure to ―get on the net‖
Promote business entity
Information
Financial
HR
Technology issues
Simple,
In-sourced
*Adapted from www.dotcomadvisor.com – 2000 Kelly Burke
Previous Next University of Hawaii at Hilo
Level I E-Commerce Development:
Minimal
Human
Resources
Purchasing - Production - Sales
Finance
*Adapted from www.dotcomadvisor.com – 2000 Kelly Burke
Previous Next University of Hawaii at Hilo
Level II E-Commerce Development:
On-line Catalog
Motivation
Pressure from customers and competitors
Information
Product
Service
Technology issues
Searching, maintenance (e.g., changing product information)
Customer personalization
On-line activity tracking
*Adapted from www.dotcomadvisor.com – 2000 Kelly Burke
Previous Next University of Hawaii at Hilo
Level II E-Commerce Development:
On-line Catalog
Human
Resources
Purchasing - Production - Sales Marketing
Finance
*Adapted from www.dotcomadvisor.com – 2000 Kelly Burke
Previous Next University of Hawaii at Hilo
Level III E-Commerce Development:
On-line Transactions
Motivation
Exploit Internet as new channel of distribution
Information
Catalog / order
Technology issues
Interactivity
Integration of core businesses functions (e.g., sales and
accounting)
Business issues
Order fulfillment capacity
Building site traffic
*Adapted from www.dotcomadvisor.com – 2000 Kelly Burke
Previous Next University of Hawaii at Hilo
Level III E-Commerce Development:
On-line Transactions
Human
Resources
Purchasing Production Sales Marketing
Finance
*Adapted from www.dotcomadvisor.com – 2000 Kelly Burke
Previous Next University of Hawaii at Hilo
Level IV E-Commerce Development:
Automated Value Chain
Motivation
Customers and suppliers ―want‖ more info
Reduce cycle times and costs
Information
Manufacturing, purchasing, shipping
Technology issues
Systems integration
Outsourcing
Business issues
Sharing operational information with external entities
*Adapted from www.dotcomadvisor.com – 2000 Kelly Burke
Previous Next University of Hawaii at Hilo
Level IV E-Commerce Development:
Automated Value Chain
Human
Resources
Purchasing Production Sales Marketing
Finance
*Adapted from www.dotcomadvisor.com – 2000 Kelly Burke
Previous Next University of Hawaii at Hilo
Level V E-Commerce Development:
Market Site
Motivation
Product comparisons, e.g., http://www.amazon.com
Information
Competitor’s products/services
Third-party product/service comparisons
Technology issues
Handling traffic loads
Monitoring/mining traffic
Business issues
Corporate identity
Objectivity of product comparisons
*Adapted from www.dotcomadvisor.com – 2000 Kelly Burke
Previous Next University of Hawaii at Hilo
Level V E-Commerce Development:
Market Site
Human
Resources
Reverse
Purchasing Production Sales Marketing
Marketing
Finance
Competitors Kelly Burke
Previous Next University of Hawaii at Hilo
Level VI E-Commerce Development:
Super Market Site
Motivation
Become the ―preferred‖ one-stop shop (i.e., marketplace), e.g.,
http://www.sabre.com/
Information
Complimentary products/services
Technology issues
Integrating associates systems/information
Business issues
Managing customer AND supplier suggestions and requirements
*Adapted from www.dotcomadvisor.com – 2000 Kelly Burke
Previous Next University of Hawaii at Hilo
Level VI E-Commerce Development:
Super Market Site
Complimentors
Human
Resources
Reverse
Purchasing Production Sales Marketing
Marketing
Finance
Competitors Kelly Burke
Previous Next University of Hawaii at Hilo
Facts and Forces
in E-Commerce
Benefits of E-Commerce
Increase sales
Distributed market exposure
Target narrow segments
Create virtual communities which become targets
Reduce costs
Sales inquiries
Price quotes
Product availability
Enhance product value
Benefits work both ways – selling or buying
Kelly Burke
Previous Next University of Hawaii at Hilo
Disadvantages of E-Commerce
High ticket and perishables don’t work
Costs / benefits can be hard to quantify
Difficult to integrate with existing databases
Fast pace of technology change
Potential legal issues
Kelly Burke
Previous Next University of Hawaii at Hilo
Big Business Survey Results
Have a systematic, strategic approach to
internet-based initiatives with top-level
executive involvement (69% )
Have full time units dedicated to e-business
development (47%)
Extent of e-business functionality isn’t beyond
basic ―brochure ware‖ (25%)
Kelly Burke
Previous Next University of Hawaii at Hilo
Big Business Survey Results
E-business accounts for less than 5% of
revenues (79%)
Able to process payments online (25%)
Creation of a convenient buying experience for
customers on the Web is ―extremely important‖
(80%)
Kelly Burke
Previous Next University of Hawaii at Hilo
On-line Transaction Completion
Kelly Burke
Previous Next University of Hawaii at Hilo
Reasons for Abandoning
On-line Purchases
Kelly Burke
Previous Next University of Hawaii at Hilo
Other Common Site Problems
Navigation problem
Finding information
cdw.com
Site too slow
Kelly Burke
Previous Next University of Hawaii at Hilo
Forces Driving Online C2C
Shopping
Convenience (75%)
Cost (38%)
Context – opportunity to buy at right time
and right place (e.g., from work when I am
thinking about that book)
Kelly Burke
Previous Next University of Hawaii at Hilo
The Typical Online Customer
Age: 30-49
Gender: Male
Family status: Married with children
Household annual income: $60,000
Amount spent online per year: $460
Source: Harris Interactive, Nielson Netratings
Kelly Burke
Previous Next University of Hawaii at Hilo
The Typical Online Customer
Completed online transactions: 10
Online sessions per week: 6
Unique sites visited per week: 6
Average surfing session: 31 minutes
Time per site per week: 32 minutes
Time online per week: 3 hours, 8 minutes
Source: Harris Interactive, Nielson Netratings
Kelly Burke
Previous Next University of Hawaii at Hilo
The WWW and How it Works
for E-Commerce
The “Big Picture” In EC
WWW architecture
How the web works
Internet protocol
URLs / domain names
Internet communication
Kelly Burke
Previous Next University of Hawaii at Hilo
Client
(Browser)
Web Server Static
Pages
Pages
Pages
Pages Commerce Server Dynamic
Secure
Product Shopping
Transaction
Database Cart
Server
Kelly Burke
Previous Next University of Hawaii at Hilo
How the Web Works:
Uniform Resource Locators
Browsers differ in the way they are programmed
But if WWW is to be useful to many – we need standard
way to identify a resource
Example:
http://www.hawaii.edu:2074/~kburke/494/ch_3.ppt
URLs specify:
protocol (e.g. http)
host name (e.g., www.hawaii.edu)
connection port on host (e.g. 2074)
path on host to resource (494/ch_3.ppt)
Kelly Burke
Previous Next University of Hawaii at Hilo
How the Web Works:
The Internet Protocol
TCP / IP protocol for communicating
IP addressing
Network Information Center allocates blocks
Class Address Network part Host part
A 18.155.32.5 18 155.32.5
B 128.171.12.237 128.171 12.237
C 192.66.12.56 192.66.12 56
Kelly Burke
Previous Next University of Hawaii at Hilo
How the Web Works:
Domain Names
IP addresses are unfriendly
Assign a human readable name to IP addresses
Placed in a distributed, hierarchical, lookup
system (DNS)
Domains and Hosts - pahuleka.uhh.hawaii.edu
Host || Domain ||
Host_name Org_name_1 Org_name_2 Org_type
pahuleka uhh hawaii edu
Kelly Burke
Previous Next University of Hawaii at Hilo
How the Web Works:
Protocols and Infrastructure
Messages versus Packets
i.e., connection vs. connectionless
HTTP Message (example: Page) HTTP
TCP Packet 3 Packet 2 Packet 1 TCP
IP Packet Packet Packet IP
Kelly Burke
Previous Next University of Hawaii at Hilo
Client
(Browser)
Web Server Static
Pages
Pages
Pages Commerce Server
Pages
(Storefront)
Dynamic
Secure
Product Shopping
Transaction
Database Cart
Server
Kelly Burke
Previous Next Back to Hosting University of Hawaii at Hilo
Planning for
E-Commerce
Planning Your EC Path
Identify your organizational objectives
Want to increase effectiveness of salesperson’s time
Identify ways EC can help achieve the
objectives
Permit customers to order online / salesperson can
spend time showing new products
Determine what resources are required
Need: website, database, computer to process
orders, trained user to process orders
Sample planning checklist
Kelly Burke
Previous Next University of Hawaii at Hilo
Planning Your EC Path
Plan the implementation
Select implementation strategies - e.g.,
http://strategis.ic.gc.ca/SSG/ir01580e.html#imple
mentation
Outsource web site creation / maintenance, plan
content, train users
Determine how you will monitor EC results /
performance
Require periodic site reports from ISP, measure
increase in new product sales
Kelly Burke
Previous Next University of Hawaii at Hilo
Planning Your EC Path:
Levels of E-Commerce Development
Minimal online presence
On-line catalog
On-line transactions
Automated value chain
Market site
Super market site
Kelly Burke
Previous Next University of Hawaii at Hilo
Getting Started
in E-Commerce
Getting Started
Identify appropriate business model
Make or buy?
Do it in house or use a web site service provider?
Connecting to the internet
DSL, ISDN, Fractional T1
Register a domain name
Domain names are easier than IP addresses
Search on Network Solutions' WhoIs directory
http://www.networksolutions.com/cgi-bin/whois/whois
Kelly Burke
Previous Next University of Hawaii at Hilo
Obtaining a Domain Name
Domain names are handled by DNS
registrars
There are many web-based services for
looking up names and/or registering them
Most of the popular names are taken,
many by ―squatters‖
Registration of a name requires an annual
fee and agreements with third parties for
name service referral
Kelly Burke
Previous Next University of Hawaii at Hilo
Domain Names.
Once you’ve registered a name, you have
first right of renewal, unless…
Disputes are arbitrated by ICANN; most
established trademark names and brands
are recognized
Kelly Burke
Previous Next University of Hawaii at Hilo
Getting Started
Components of the Firm’s Business Model
Customer value
Scope of products/services
Price of value delivered
Revenue sources
Connected activities
Implementation
Capabilities
Sustainability of advantage
Kelly Burke
Previous Next University of Hawaii at Hilo
Getting Started
―Do-it-yourself‖ website services
http://www.bigstep.com/
http://store.yahoo.com/
Hosting
Understanding what ―hosting‖ means and your
alternatives?
Architecture?
Target market?
Market research
Kelly Burke
Previous Next University of Hawaii at Hilo
What is Involved in
Establishing a Web Site?
Web site considerations
The services wanted Training requirements
How much your company can Installation and server
contribute to the site, from maintenance
manpower to electronic content Programming
Time to design your site On corporate site hosting vs.
Time to create and program off-site
your site Secure Server for financial
Extra fees for software transactions
development Your bandwidth needs
Fees for off-the-shelf Your server capacity needs
applications tools Location of your server at the
The size of the site Web company or ISP company
location
Kelly Burke
Previous Next University of Hawaii at Hilo
Getting Started: Web Hosting
Identify what you have resources and time to do
Identify what will be done ―outside‖ the firm
Identify which external parties will be involved
e.g., designer, ISP, web host? commerce provider?
Identify how you will assess their performance
Decision metrics – e.g., are they reliable?
On-going performance metrics – e.g., is their ―uptime‖ what
they claim?
Kelly Burke
Previous Next University of Hawaii at Hilo
Getting Started:
The Marketing Process
Traditional Process
Make Product Sell Product
Design, Price, Distribute,
Procure, Make Sell, Promote Service
Value Creation
Choose Value Provide Value Communicate Value
Segmentation, Develop Product,
Selection, Price, Source, Promote
Value Positioning Distribute, Service
Kelly Burke
Previous Next University of Hawaii at Hilo
Getting Started: Market Research
Define problem / research objectives
Develop research plan
Collect information
Analyze information
Present findings
Kelly Burke
Previous Next University of Hawaii at Hilo
Getting Started:
Market Research Resources
AMA
www.ama.org
CommerceNet
www.commerce.net
National Trade Data Bank
http://www.stat-usa.gov/tradtest.nsf
CIA World Factbook
www.odic.gov/cia/publications
On-line user survey data from Georgia Tech
http://www.gvu.gatech.edu/user_surveys/
Kelly Burke
Previous Next University of Hawaii at Hilo
Getting Started: Resources
Hawaii
State website: http://www.cochawaii.com/
Dept. of commerce : http://www.state.hi.us/dcca/
Registering your business:
http://www.businessregistrations.com/home.html
Chamber of commerce: http://www.cochawaii.com/
Small businesses
SBA: http://www.sba.gov/
SBA PRO-Net (procurement network):
• http://www.pro-net.sba.gov/
Kelly Burke
Previous Next University of Hawaii at Hilo
Getting Started: Resources
Various (legal, articles, research, policies, etc.)
http://www.gtlaw.com.au/ecomm/
Federal government policy
http://www.ecommerce.gov/
Description of eFed (federal govt. interagency
procurement system)
http://www.sewp.nasa.gov/edi/hanson9711.html
Kelly Burke
Previous Next University of Hawaii at Hilo
Web Site Design Issues
in E-Commerce
Web Site Design
Navigation
Intuitive, predictable, consistent
Longer pages - fewer links
Site map - especially smaller sites (VISIBLE - TOP?)
• Category names/descriptions MUST be meaningful
Searchability - perhaps for large sites BUT 50% more likely to find
information if no search - why?
• Searching can be imprecise and frustrating
Easy to ―quit‖
Links and ―tabs‖ on top
• http://www.businessweek.com
Kelly Burke
Previous Next University of Hawaii at Hilo
Web Site Design
Must distinguish between graphics design
and web site design
Graphics design: your business image
Web site design: what’s on your site
Don’t get these confused!
Kelly Burke
Previous Next University of Hawaii at Hilo
Graphic Design
Don’t be tempted to skimp on developing your
online image-your web site is your online
storefront!
Best to hire out the design of the graphics and
layout, even if you are editing the pages yourself
Some graphics design companies do web
design, some do not yet; it may not matter.
Vector graphics allow you to scale images for
your use throughout the business: on and
offline
Kelly Burke
Previous Next University of Hawaii at Hilo
Web Site Design
Planning - layout, mapping
Purpose of site on home page
What’s new section
Content should fit the customer
Style guide
For consistent content design -especially over time
Feedback mechanism(s)
Mailto, forms, request routing, auto responses
Kelly Burke
Previous Next University of Hawaii at Hilo
Designing it Yourself
KISS philosophy rules: make the design
easy to navigate!
Avoid clutter
Avoid lots of graphics
Avoid cutesy clip art
Avoid lots of fonts
Avoid long pages
Provide site navigation tools
Kelly Burke
Previous Next University of Hawaii at Hilo
Web Site Design
Loading time!!!
Pictures of some products but not others
Interactivity
Forms, object manipulation, applet running
Error handling - inform user about
Being able to find out more about a particular
item by a link in the cart
Instructions - ordering, interacting, feedback
Kelly Burke
Previous Next University of Hawaii at Hilo
Web Site Design
Backgrounds - readability and colors
Too much white space perceived as
―complex‖
Be aware of screen resolution and position
ISPs and design gurus use Unix workstations
with monster monitors
Typical users have 15‖ monitors
Design for a ―lowest common denominator‖
monitor
Kelly Burke
Previous Next University of Hawaii at Hilo
Web Site Design
Place items in frame to:
Keep them on-screen and
To make display more effective
• best banners on Netscape got 4% click-throughs
• Placed in frames generated 30% click-throughs
e.g.,
Use of tables can simulate frames
e.g., http://www.businessweek.com
Examples of bad design
e.g., http://www.webpagesthatsuck.com
Kelly Burke
Previous Next University of Hawaii at Hilo
Web Content Design
Content takes many shapes
Will change dramatically
More robust, comprehensive, and usable medium
Challenges in developing a successful online
storefront
Choosing the right software solution for your site
3 options
• build your own software
• purchase a commercial software product
• rent from a Web host
Kelly Burke
Previous Next University of Hawaii at Hilo
Security Issues
in E-Commerce
Security Issues
To maintain a successful online business, you
MUST
Secure your E-Commerce transactions
Secure your servers and data
Formulate, post and follow a customer
privacy policy
Kelly Burke
Previous Next University of Hawaii at Hilo
Securing Transactions
Need to secure communications between client
(customer at a web browser) and server (your web site
and beyond)
What kinds of data need securing?
Credit card data (card number, expiration date, etc.)
Personal data (phone #, address, etc.)
Order data
Etc.
Kelly Burke
Previous Next University of Hawaii at Hilo
Secure Communications Mean
Authentication: want to make sure that each side
is actually dealing with the right host and not
some impostor or "man-in-the-middle"
Integrity: want to make sure that data is not
altered during transit in any way
Privacy: want to ensure that data is not snooped
by a third party in transit
Problem: how to achieve this on the insecure
Internet?
Kelly Burke
Previous Next University of Hawaii at Hilo
Encryption
A secret "key" is used to encrypt ("scramble")
and decrypt ("unscramble") any data passed
between browser and server.
The encryption technique and key are chosen
so that it would be computationally infeasible to
decipher the data without the key (i.e. break
the code).
Kelly Burke
Previous Next University of Hawaii at Hilo
Encryption
If the key is kept secret, the "right" encrypted
data can only be generated by the browser or
the server. Encrypted data is meaningless to
snoopers and cannot be altered without
detection.
This provides authentication, integrity and
privacy.
Kelly Burke
Previous Next University of Hawaii at Hilo
Public Key Cryptography
Public Keyreceiver Private Keyreceiver
Original Scrambled Scrambled Original
Message Internet
Message Message Message Message
Sender Receiver
Private Keysender Public Keysender
Digital Original Scrambled Scrambled Original
Internet
Signature Message Message Message Message
Sender Receiver
Kelly Burke
Previous Next University of Hawaii at Hilo
Key Distribution Problem
Problem: how to get the key to the other party
over an insecure network like the Internet?
Answer: public key encryption
PKE uses two keys: whichever one is used to
encrypt, the other one must be used to decrypt
Typically, one key is made public, the other is
kept secret.
How does this help?
Kelly Burke
Previous Next University of Hawaii at Hilo
Session Keys
If the browser can get the public key of the
merchant, it could encrypt a one-time session key
and send it over.
Then the two sides could use the shared session key
to encrypt and communicate securely.
To get the merchant's public key, the server could
send it over to the browser when it first connects.
Problem: how does the browser know if it has the
real public key and not a fraudulent one?
Kelly Burke
Previous Next University of Hawaii at Hilo
Digital Signatures
A merchant's public key can be digitally signed.
A digital signature is a token (a little bit of data)
attached to the end of the key.
Using encryption technology, it is possible to verify
the authenticity of the key by examining the
"signature".
If you trust the key signer, you can trust that the
key is valid.
Who can be trusted to sign (vouch for) a merchant's
public key?
Kelly Burke
Previous Next University of Hawaii at Hilo
Certificate Authority
A certificate authority is a trusted third party that is
in the business of signing public keys. A key signed
by a CA is called a digital certificate.
A merchant purchases a certificate and puts it on his
server.
When a browser makes a connection the certificate
is downloaded. The browser verifies the signature on
the certificate and extracts the public key.
The browser encrypts a session key and sends it to
the server. Both sides can now securely
communicate. Kelly Burke
Previous Next University of Hawaii at Hilo
Digital Certificates
Certificates are available from a number of
certificate authorities. One of the first, and biggest,
is Verisign (www.verisign.com)
Certificates start at about $150 and go up from
there, depending on the expected use of the
certificate.
A certificate is dated and is only good for a certain
time period. After that date a browser will reject it.
To keep current, a merchant will need to purchase
new certificates just before the old ones expire.
Kelly Burke
Previous Next University of Hawaii at Hilo
Certificate
Identifying the holder of a public key (Key-Exchange)
Issued by a trusted certificate authority (CA)
Name : “Richard”
key-Exchange Key :
Signature Key :
Serial # : 29483756
Other Data : 10236283025273
Expires : 6/18/96
Signed : CA’s Signature
Kelly Burke
Previous Next University of Hawaii at Hilo
Securing Your Site
Disable all nonessential services, programs and
user accounts
Use complex passwords and change them
reasonably often
Keep up with the latest security bulletins
(CERT) and software updates
Kelly Burke
Previous Next University of Hawaii at Hilo
Securing Your Site
Monitor logs for suspicious activity
Consider installing a firewall, monitoring
software and/or secure communications
software
Have a periodic professional security audit
Does your “Host” provide all of this?
Kelly Burke
Previous Next University of Hawaii at Hilo
Customer Privacy
What does your company do with the data it collects
from customers?
Does not release customer data outside the company, under
any circumstances, except to legal authorities
makes names, addresses, etc. available to selected partners
and third parties
sells customer data to marketers
These are all valid policies!
Need to be up front: formulate a privacy policy, post
it on your web site and follow it !
Kelly Burke
Previous Next University of Hawaii at Hilo
Payments
in E-Commerce
Electronic Payment Protection
Secure Sockets layer (SSL) or Secure
Electronic Transaction (SET) protocols
Certification Authority (e.g.,
http://www.verisign.com)
Kelly Burke
Previous Next University of Hawaii at Hilo
Secure Electronic Transaction
(SET) Protocol
Cardholder, merchant, CA, payment
gateway
All entities have certificates
Cardholder keeps a security certificate with
them
Either in their computer - not mobile - or
In the form of an ―electronic wallet‖
Kelly Burke
Previous Next University of Hawaii at Hilo
Secure Electronic Transaction
(SET) Protocol
Cardholder requests purchase from merchant
Merchant requests from payment gateway:
Payment authorization
Payment capture
Payment gateway obtains
Authorization from card issuer
Payment capture information
Kelly Burke
Previous Next University of Hawaii at Hilo
IC Card
Reader Customer y
Customer x
With Digital Wallets
Certificate
Authority
Electronic Shopping Mall
Merchant A Merchant B Payment Gateway
Protocol
X.25
Credit Card
Brand
Entities of SET Protocol in Cyber Shopping
95
Secure Electronic Transaction
(SET) Protocol
Merchant sends payment capture request
to CA
CA verifies information with acquiring
(merchant’s) bank
Merchant receives settlement from
acquiring bank
Kelly Burke
Previous Next University of Hawaii at Hilo
SET vs. SSL
Secure Electronic Transaction (SET) Secure Socket Layer (SSL)
Complex Simple
SET is tailored to the credit card SSL is a protocol for general-
payment to the merchants. purpose secure message
exchanges (encryption).
SET protocol hides the customer’s SSL protocol may use a
credit card information from certificate, but there is no
merchants, and also hides the payment gateway. So, the
order information to banks, to merchants need to receive both
protect privacy. This scheme is the ordering information and
called dual signature. credit card information, because
the capturing process should be
initiated by the merchants.
Kelly Burke
Previous Next University of Hawaii at Hilo
Electronic Payment
Debit cards
Used in B2C
Electronic funds transfer (EFT) / E-checks
Electronic version of paper checking
Combines certificates and signatures with payment
Used in B2B
ePay by Visa, SafeCheck (see www.echeck.org)
Kelly Burke
Previous Next University of Hawaii at Hilo
eCheck Process Flow
Kelly Burke
Previous Next University of Hawaii at Hilo
Electronic Payment
Stored-value cards, e-cash (e.g., Mondex,
CyberCoin, VisaCash)
permit cost-effective ―micropayments‖
mondex smart cards
• battery operated card readers
• swipe card
• value transferred to retailer’s terminal
• no authorization required
Kelly Burke
Previous Next University of Hawaii at Hilo
Electronic Payment
Electronic wallet (Fujitsu, Mondex)
can be used for Internet transaction settlement
handheld terminal
values are transferred from customer’s account to
customer’s card or
to merchant’s account via either the card or a Web
connection
can store values for different currencies
http://www.mondex.com/
Kelly Burke
Previous Next University of Hawaii at Hilo
Electronic Payment
Closed e-cash system
Values recharged (transferred) only by bank
VisaCash
Open e-cash system
Values can be transferred between cards
Mondex
eMail-grams
Pay money to or receive money from anyone with email
e.g., www.Paypal.com
Kelly Burke
Previous Next University of Hawaii at Hilo
Marketing Issues
in E-Commerce
Marketing Your Web Site
One-to-one marketing
Customer service
Banner ads
Search engines
Kelly Burke
Previous Next University of Hawaii at Hilo
One-to-One Marketing
Relationship marketing
―Overt attempt of exchange partners to build a
long term association, characterized by
purposeful cooperation and mutual dependence
on the development of social, as well as structural,
bonds‖
―Treat different customers differently‖
Able to change the manner its products are
configured or its service is delivered, based on the
individual needs of individual customers
Kelly Burke
Previous Next University of Hawaii at Hilo
One-to-One Marketing
Customer loyalty
Purchase behavior
One of the most significant contributors to
profitability
Increase profits; strengthen market position; become
less sensitive to price competition; increase cross-
selling success; save cost, etc.
Real world examples
• 1-800-FLOWERS
• Amazon.com
• Federal Express (FedEx)
Kelly Burke
Previous Next University of Hawaii at Hilo
One-to-One Marketing
Building and maintaining customer loyalty
Maintain continuous interactions between
consumers and business
Make a commitment to provide all aspects of the
business online
Build different sites for different levels of
customers
Willing to invest capital, both human and financial,
in the information systems, to insure continuous
improvement in the supporting technology as it
becomes available
Kelly Burke
Previous Next University of Hawaii at Hilo
One-to-One Marketing
Building and maintaining customer loyalty
Make a commitment to use the information collected
about customers in an ethical manner
Realistic managerial expectations in the payback
period and cost recovery
Set acceptable standards for response time in
customer service (24-48 hours); Use intelligent
agents to expedite and standardize responses
whenever possible
Ability to change and customize information and
services quickly and inexpensively is a must
Kelly Burke
Previous Next University of Hawaii at Hilo
One-to-One Marketing
Customer service
A new look and feel
Install Web servers
Put the burden on the which allow each
customer to treat a customer to create
problem or inquiry and individual web pages
receive information that can be customized
bit by bit to record purchases
and preferences
Kelly Burke
Previous Next University of Hawaii at Hilo
One-to-One Marketing
Customer service
Information can be directed to the customer efficiently
Creation of a database which records purchases,
problems, and requests is facilitated
Information can now be traced and analyzed for
immediate response
If customer service options and solutions do not
maintain the same level of excitement and interaction
as the advertising and sales presentations, the level of
intensity declines and the vendor runs the risk of losing
customers
Kelly Burke
Previous Next University of Hawaii at Hilo
Implementing Customer Service
in Cyberspace
Product Life Cycle
Phase 1. Requirements : assisting the customer
to determine needs
Phase 2. Acquisition : helping the customer to
acquire a product or
service
Phase 3. Ownership : supporting the customer on
an ongoing basis
Phase 4. Retirement : helping the client to
dispose of a service or
product
Kelly Burke
Previous Next University of Hawaii at Hilo
Implementing Customer Service
in Cyberspace
Types of Customer Service Functions
Answering customer inquires
Providing technical and other information
Letting customers track accounts or order
status
Allowing customers to customize and order
online
Kelly Burke
Previous Next University of Hawaii at Hilo
Implementing Customer Service
in Cyberspace
Companies
understand their
customers’ needs
and buying habits
better
Companies
Doing
customize their
business
future marketing
via Web
efforts
Kelly Burke
Previous Next University of Hawaii at Hilo
Tools of Customer Service
Personalized Web Pages
Used to record purchases and preference
Direct customized information to customers efficiently
Chat Room
Discuss issues with company experts; with other
customers
E-mail
Disseminate product information, conduct customer
inquiry correspondence
FAQs
Not customized, no personalized feeling, no contribution to
relationship marketing
Kelly Burke
Previous Next University of Hawaii at Hilo
Tools of Customer Service
Help Desks and Call Centers
A comprehensive customer service entity
EC vendors take care of customer service issues
communicated through various contact channels
Telewebs
• combines Web channels, such as automated e-mail reply,
Web knowledge bases and portal-like self service with call
center agents or field service personnel
Internet
• a medium of instant gratification
• demand for both prompt replies and proactive alerts
Kelly Burke
Previous Next University of Hawaii at Hilo
Marketing Your Web Site:
Banner Ads
People don’t scroll sideways
Get everything on one screen width
Studies find the lower right corner to be most
effective location for an ad
http://www.webreference.com/dev/banners/
Placing banners last is more effective than
first
Placing banners top and bottom is more
effective than just top
Kelly Burke
Previous Next University of Hawaii at Hilo
Marketing Your Web Site
Web malls
Host sites and provide shopping ―portals‖
e.g., http://store.yahoo.com/
Search engines
Passive strategy – ―meta‖ tags
• e.g., www.sba.gov
Active strategy – submit site to search engines
• e.g., http://www.submitit.com/
E-mail list rental
Opt-in mailing lists (direct marketing)
e.g., http://www.netcreations.com/main?page=welcome
Kelly Burke
Previous Next University of Hawaii at Hilo
Publicizing your site
Simply registering your domain name will not
bring people to your ―door‖
The ugly reality of search engines: pay to play
How to get found in a billion web pages? Get
mentioned on TV
Use your ―bricks‖ to promote your ―clicks‖
Develop relationships with other online sites
Kelly Burke
Previous Next University of Hawaii at Hilo
Infrastructure Issues
in E-Commerce
Infrastructure Requirements
Internet service
Site content
Site Design
Site / Commerce functionality
Database
Kelly Burke
Previous Next University of Hawaii at Hilo
Client
(Browser)
Web Server Static
Pages
Pages
Pages Commerce Server
Pages
(Storefront)
Dynamic
Secure
Product Shopping
Transaction
Database Cart
Server
Kelly Burke
Previous Next Back to Hosting
University of Hawaii at Hilo
Web Hosting Issues
Bandwidth
Capabilities and specifications
Firewall system
Wireless delivery
Buy, rent, or lease
Maintenance, upgrade, and service of the equipment
Kelly Burke
Previous Next University of Hawaii at Hilo
Developing E-Commerce
Infrastructure
Hosting the site
Obtaining a domain name
Graphics design and web site design
Web site programming
Secure transactions and purchasing
Kelly Burke
Previous Next University of Hawaii at Hilo
Hosting
Where will the site be hosted?
Your premises
Leased space at an ISP
Rack mounted server at a professional hosting
company
Managed host at a hosting co.
Custom outsourced site
―Template‖ outsourced site (e.g. Yahoo
storefront)
Kelly Burke
Previous Next University of Hawaii at Hilo
Hosting: Doing it Yourself
Buy servers and network equipment and lease
bandwidth (―pipes‖) from Telco
Advantages:
Complete control over all aspects of site, including
security, functionality, integration with existing business
systems
Cost savings once level of online commerce reaches a
certain threshold
Disadvantages:
IT costs to manage equipment, systems
Initial capital investment
Physical infrastructure impact
Kelly Burke
Previous Next University of Hawaii at Hilo
Hosting: Lease Space at an ISP
Rent space for your equipment to be hosted at an ISP
Pay bulk bandwidth charges to ISP
Advantages:
Complete control over site
Smaller start up expenses
Disadvantages:
Must manage your own systems, usually remotely
Cost of purchasing equipment
Harder to integrate with existing business systems
Kelly Burke
Previous Next University of Hawaii at Hilo
Hosting:
Lease Equipment at Hosting Vendor
Rent equipment at a professional hosting
company
Pay bulk bandwidth charges (sometimes rolled
into hosting package)
Advantages:
Aging equipment is not your problem
Smaller start up costs
Disadvantages:
Must manage your own system
Kelly Burke
Previous Next University of Hawaii at Hilo
Hosting:
Managed Host at Hosting Vendor
Rent use of a system at a hosting vendor
System is managed for you
Can mix and match services (web, email,
ordering, etc.)
You are responsible for site content
Advantages:
System is managed for you
You maintain control over site design, functionality
Disadvantages:
Ongoing expenses
Kelly Burke
Previous Next University of Hawaii at Hilo
Hosting:
Custom Outsourced Site
Outsource the development of the web site
May be a different entity than hosting co.
(e.g. consultant)
Advantages:
Custom designed site
No web development or system management
required on your part
Disadvantages:
Less control over costs
Kelly Burke
Previous Next University of Hawaii at Hilo
Hosting:
Template Outsourced Site
Use pre-designed ―templates‖ for
building site from dot-coms catering to
small business owners
Advantages:
Very low cost (some free!)
Disadvantages:
Cookie-cutter feel to sites
Little control over site or design
Customer service?
Kelly Burke
Previous Next University of Hawaii at Hilo
Web Programming: Implementing
the Software Infrastructure
Most E-Commerce sites are not a static
collection of web pages, but dynamic
interactive systems
Need to develop the software infrastructure
that drives the site: databases, business
rules, secure ordering, web user interfaces,
etc.
Q: Do you need to interface your site to
your existing IT infrastructure? Database?
Kelly Burke
Previous Next University of Hawaii at Hilo
Web Programming: Implementing
the Software Infrastructure
There are ―turnkey‖ solutions for implementing
some of this software infrastructure
Unless you have a simple business, these probably
won’t be satisfactory
Reality check: custom software development takes
time and money
Programmers are not artists, and vice versa! Don’t
hire programmers to write web pages and don’t hire
webmasters to write sophisticated software.
Don’t hire either one to design your corporate
image!
Kelly Burke
Previous Next University of Hawaii at Hilo
Web Programming: Implementing
the Software Infrastructure
Electronic storefront must contain:
A merchant system or storefront that provides
the merchant’s catalog with products, prices
and promotions
A transaction system for processing orders
and payments and other aspects of the
transaction
A payment gateway that routes payments
through existing financial systems primarily
for the purpose of credit card authorization
and settlement
Kelly Burke
Previous Next University of Hawaii at Hilo
Web Programming: Implementing
the Software Infrastructure
Purchase a suite of software that claims to integrate
storefront functions into a single box
iCat Corp.’s Electronic Commerce Suite and Commerce
Publisher
Open Market’s Transact and LiveCommerce
http://www.openmarket.com
Microsoft Corp.’s Site Server Commerce Edition
IBM Corp.’s Net. Commerce Pro
Saqqara Systems’ StepSearch Professional
Kelly Burke
Previous Next University of Hawaii at Hilo
Web Programming: Implementing
the Software Infrastructure
Electronic Commerce Suites
• Offer merchants greater
flexibility, specialization,
Catalog Catalog
customization and integration in Application Database
supporting complete front and Customer
back-office functionality Management, Customer
Registration, Database
Profiles, Service Order
Database
Internet Order Capture,
Fulfillment
Completion
Web Systems
Browser Web Payment
Processing Payment
Server Database
(SET & Purchase
Order) Financial
Open Market E-Commerce Server Architecture Network
Kelly Burke
Previous Next University of Hawaii at Hilo
Web Programming: Implementing
the Software Infrastructure
Making a Web catalog into a multimedia
extravaganza
Not easy and expensive
Lower end systems : begin at $25,000
High end systems : $250,000 to $2
million
Kelly Burke
Previous Next University of Hawaii at Hilo
Secure Transactions and Ordering
Payment handling: one of the easiest things to
outsource
To handle it on your own web server, you need to
obtain a certificate from a Certificate Authority (CA)
Certificates allow authenticated, encrypted, trusted
connections
Certificates expire and must be renewed for an
annual fee
You probably should be concerned about secure
transactions even if payment handling is
outsourced
Kelly Burke
Previous Next University of Hawaii at Hilo
Review of
E-Commerce Infrastructure
Hosting the site
Obtaining a domain name
Graphics design and web site design
Web site programming
Secure transactions and purchasing
Kelly Burke
Previous Next University of Hawaii at Hilo
Review of
E-Commerce Infrastructure
Putting together a successful E-Commerce
web site requires different skills from
different people:
Graphics designer
Webmaster
Programmer(s)
Other business entities: marketing, etc.
Few people have all these effective skills
Kelly Burke
Previous Next University of Hawaii at Hilo
Review of
E-Commerce Infrastructure
The good news:
there are many choices for hosting and
outsourcing the infrastructure development
Your choices will depend on:
How central is the E-Commerce aspect of your business
to the core focus of your business?
What is your current investment in IT and existing
infrastructure?
What are your available resources for capital
investment?
Kelly Burke
Previous Next University of Hawaii at Hilo
Outsourcing: Pros and Cons
Pros
Faster
Resources readily available
Competitive - many alternatives
You can focus on what you do best
You’ll learn as you go
Cons
Can be costly
Always risky – need to do research before and
monitor performance during and after
Kelly Burke
Previous Next University of Hawaii at Hilo
Monitoring Website Performance
Log details
Server log
Access log
Visit details
Hits
What pages do they visit?
How long do they spend on a page?
What ―areas‖ of a page did they scan?
Relationship of hits/pages visited/orders
Feedback survey
Kelly Burke
Previous Next University of Hawaii at Hilo
Future Developments to Watch
For in E-Commerce
Future Developments in EC
Public portals
Content
Community
Commerce
e.g., http://www.ivillage.com
Exchanges
Industry sponsored
Private
Public
Kelly Burke
Previous Next University of Hawaii at Hilo
Future Developments in EC
Enterprise E-Portals
E-Commerce systems and legacy systems focus
on transactions,
Auctions focus on bringing together buyers and
sellers
Operational systems track orders and inventory.
E-Portals tie together all of these disparate
systems
Enabling the flow of information to employees,
customers and partners
Kelly Burke
Previous Next University of Hawaii at Hilo
Future Developments in EC
Wireless / Mobile Web Access
Technologies
• handhelds (e.g., http://www.palm.com/)
Applications
• CRM, commerce
Implications
• customer may shop your physical store, see long lines, order
online for delivery to home (another state?)
• have to cross market EC capability (e.g., in store marketing)
Kelly Burke
Previous Next University of Hawaii at Hilo
