Accounting information systems controls and process 2nd tunnwe weickgenannt chapter 14

Intranets and extranets to enable e-business 9.. Introduction to E-commerce and E-business Introduction to E-commerce and E-business E-commerce - electronically enabled transactions bet

Prepared by Coby Harmon Prepared by Coby Harmon

SECOND EDITION

Chapter

14-2

E-Commerce and E-Business

1 An introduction to e-commerce and e-business

2 The history of the Internet

3 The physical structure and standards of the Internet

4 E-commerce and its benefits

5 The privacy expectations in e-commerce

6 E-business and the IT enablement

7 E-business enablement examples

8 Intranets and extranets to enable e-business

9 Internal controls for the Internet, intranets, and extranets

10 XML and XBRL as e-business tools

11 The ethical issues in e-business and e-commerce

Study Objectives

Study Objectives

Chapter

14-4

Real World

change in the EDI (Electronic Data Interchange) approach to business transactions Although EDI had been around for many years, the technology had advanced to allow it to be conducted for free over the

business-to-Internet Yet many were concerned about the lack of secure transmission over the Internet By 2002, Wal-Mart felt the new security standards, called AS2, were adequate It announced to its 10,000 small and mid-size suppliers that the suppliers had one year to begin using Internet EDI (EDIINT AS2) This was a tremendous change from its traditional EDI and value-added

networks, and it had a dramatic impact not only on Wal-Mart’s suppliers but

on many other large companies and their suppliers worldwide Some call Wal-Mart the market maker for Internet EDI Its change to EDIINT led to a revolution of adoption of Internet EDI around the world Since the buyer and seller have to use the same EDIINT AS2 protocol, Wal-Mart forced a huge number of companies to switch to EDIINT, and in turn, those suppliers used EDIINT with other business customers.

Introduction to E-commerce and

E-business

Introduction to E-commerce and

E-business

E-commerce - electronically enabled transactions between

a business and its customers

E-business - includes not only electronic trade with

customers, but also

► trading information with customers and vendors, and

► electronic recording and control of internal processes.

Chapter

14-6 SO 1 An introduction to e-commerce and e-business.

Introduction to E-commerce and

The most common method of conducting e-commerce and e-business is

to use the Internet to electronically exchange data.

Introduction to E-commerce and

E-business

Introduction to E-commerce and

E-business

Which of the following statements is true?

a E-business is a subset of e-commerce

b E-commerce is a subset of e-business

c E-business and e-commerce are exactly the same thing

d E-business and e-commerce are not related

Concept Check

Chapter

14-8 SO 2 The history of the Internet.

The History of the Internet

The History of the Internet

connected to a computer in California, using dial-up telephone lines

connected via leased telephone lines

► Purpose was to share military research data among

UCLA, UC Santa Barbara (UCSB), Stanford, and the University of Utah

► Over time, many other universities, NASA, and the Rand

Corporation were connected to this network.

The History of the Internet

The History of the Internet

► developed the use of the @ symbol in e-mail address.

► in the 1970s, helped develop the TCP/IP protocol.

Chapter

The History of the Internet

The History of the Internet

 In 1986, the National Science Foundation (NSF) began to

develop a backbone set of servers, gateways, and networks that eventually became the Internet.

 Internet serves as backbone for World Wide Web

 In 1992, commercial enterprises began offering Internet

access to subscribers.

 In 1993, first graphical user interface (GUI) browser was

developed

 In 1995, the NSF relinquished control of the Internet Since

that time, all Internet traffic has been routed through commercial networks.

The History of the Internet

The History of the Internet

Exhibit 14-2

Chart of the Number

of Web Servers

Chapter

14-12

An electronic hardware device that is located at the

gateway between two or more networks is a

a.packet switch

b.URL

c.router

d.protocol

SO 2 The history of the Internet.

The History of the Internet

The History of the Internet

Concept Check

The Physical Structure and Standards of

Chapter

14-14 SO 3 The physical structure and standards of the Internet.

The Physical Structure and Standards of

The Physical Structure and Standards of

the Internet

The Physical Structure and Standards of

the Internet

The Common Standards of the Internet

► HTML - language to present data on websites

Exhibit 14-4

A Simple Web Page and the HTML Source Code

Chapter

14-16 SO 3 The physical structure and standards of the Internet.

The Physical Structure and Standards of

► URL - uniform resource locater address.

► Domain Name - http://www.google.com

► Common suffix portions of domain names:

The Physical Structure and Standards of

.net - network

.com - commercial edu - educational org - nonprofit

► URL system actually uses IP addresses

The Common Standards of the Internet

Chapter

14-18 SO 3 The physical structure and standards of the Internet.

The Physical Structure and Standards of

the Internet

The Physical Structure and Standards of

the Internet

Concept Check

The type of organization that serves as the main trunk line

of the Internet is called a

a.local ISP

b regional ISP

c global ISP

d backbone provider

E-Commerce and its Benefits

E-Commerce and its Benefits

Benefits of E-commerce for the Customer

►Access to broader market for goods and services

►More convenient times for shopping

►More choices to the customer

►Lower prices

►Exchange information with businesses before, during, and

after the purchase

►Quicker delivery of the product

►Receive targeted marketing from businesses

Chapter

14-20

E-Commerce and its Benefits

E-Commerce and its Benefits

Disadvantages of E-commerce for the Customer

►Opportunity for fraud

►Theft of assets

►Theft of data

►Inability to handle or try out the product

SO 4 E-commerce and its benefits.

E-Commerce and its Benefits

E-Commerce and its Benefits

Benefits of E-commerce for the Business

►Access to broader market

►Reduced marketing costs

►Potential for much richer marketing concepts

►Quickly react to changes in market conditions

►Likely to experience reduced order-processing and

distribution costs

►Customer convenience likely to result in higher sales

►Higher sales with reduced marketing, order processing, and

distribution costs can lead to higher profits

Chapter

14-22

E-Commerce and its Benefits

E-Commerce and its Benefits

Disadvantages of E-commerce for the Business

►IT system usually more complex and costly

►World Wide Web opens a business to:

 chances for fraud,

 hackers, and

 compromised customer privacy.

SO 4 E-commerce and its benefits.

E-Commerce and its Benefits

E-Commerce and its Benefits

E-commerce and Traditional Commerce

►Brick and mortar

►E-tailers

►Clicks and mortar (bricks and clicks)

Chapter

14-24

E-Commerce and its Benefits

E-Commerce and its Benefits

SO 4 E-commerce and its benefits.

Concept Check

Which of the following is not a direct advantage for the

consumer from e-commerce?

a Access to a broader market

b More shopping convenience

c Reduced order-processing cost

d Information sharing from the company

E-Commerce and its Benefits

E-Commerce and its Benefits

Chapter

14-26 SO 5 The privacy expectations in e-commerce.

Personal information to be protected:

► Name, address, Social Security number, or other

government ID numbers

► Personal or family health conditions.

► Personal or family financial information.

► History of purchases or other transactions.

Ten privacy practices to ensure adequate customer

confidence regarding privacy of information:

1 Management.

2 Notice.

3 Choice and consent.

4 Collection.

5 Use and retention.

Privacy Expectations of Business in

E-commerce

Privacy Expectations of Business in

E-commerce

6 Access.

7 Disclosure to third parties.

8 Security for privacy.

9 Quality.

10 Monitoring and enforcement.

Chapter

14-28 SO 5 The privacy expectations in e-commerce.

Privacy Expectations of Business in

E-Business and IT Enablement

E-Business and IT Enablement

The supply chain is the set of linked processes that take

place from the,

► acquisition and delivery of raw materials,

► through the manufacturing,

► distribution,

► delivery of the product

to the customer.

Chapter

14-30 SO 6 E-business and the IT enablement.

E-Business and IT Enablement

E-Business and IT Enablement

B2B: A Part of E-Business Exhibit 14-6

E-commerce B2C vs

E-Business B2B4

E-Business and IT Enablement

E-Business and IT Enablement

Concept Check

Which of the following processes within a supply chain can

benefit from IT enablement?

a All processes throughout the supply chain

b Only internal processes within the supply chain

c Only external processes within the supply chain

d Exchange processes between a company and its

suppliers

Chapter

E-Business Enablement Examples

E-Business Enablement Examples

Intranets and Extranets to Enable

Three levels of network platforms

Chapter

14-34 SO 8 Intranets and extranets to enable e-business.

Intranets and Extranets to Enable

E-Business

Intranets and Extranets to Enable

E-Business

Concept Check

Intranets are used for each of the following except

a communication and collaboration

b business operations and managerial monitoring

d customer self-service

Internal Controls for the Internet, Intranets

Chapter

14-36 SO 9 Internal controls for the Internet, intranets, and extranets.

Internal Controls for the Internet, Intranets

Internal Controls for the Internet, Intranets

Chapter

14-38 SO 10 XML and XBRL as e-business tools.

XML and XBRL as Tools to Enable

E-Business

XML and XBRL as Tools to Enable

E-Business

Two languages as tools to enable e-business:

XML In Internet EDI

► Internet EDI is alternative to traditional EDI

► Uses the Internet to transmit business information

between companies

XML and XBRL as Tools to Enable

Chapter

14-40 SO 10 XML and XBRL as e-business tools.

XML and XBRL as Tools to Enable

Easily used in several formats

► Printed in paper format.

► Sent electronically to the SEC.

► Transmitted to banks or regulatory agencies.

► Computer program can extract pieces of information from

the XBRL file.

An extensible markup language designed specifically for

Chapter

14-42 SO 11 The ethical issues in e-business and e-commerce.

Ethical Issues Related to E-business and

E-commerce

Ethical Issues Related to E-business and

E-commerce

Online privacy policies of the AICPA Trust services

Principles represent ethical obligations to customers

Ethical obligations would dictate that companies take

adequate care to guard the security and privacy of data

collected through e-commerce

Real World

behind Hooked on Phonics®, was charged by the Federal Trade Commission with deceptive and unfair practices Starting in the year 2000, Gateway disclosed a privacy policy on its www.hop.com Website stating that it would not share customers’

personal information with any third parties without explicit consent from the customer.

In April 2003, Gateway allegedly began violating this policy by renting to telemarketers customer information such as name,

address, phone number, age, and gender of children A retroactive change was posted to the company’s privacy statement on its

Website

To settle this charge out of court, Gateway was required to pay a fine, was restricted from using deceptive claims regarding its privacy policy, and cannot materially change its privacy policy without

customers’ consent.

Chapter

14-44

Copyright © 2013 John Wiley & Sons, Inc All rights reserved

Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United States Copyright Act without the express written permission of the copyright owner is unlawful

Request for further information should be addressed to the

Permissions Department, John Wiley & Sons, Inc The purchaser may make back-up copies for his/her own use only and not for distribution or resale The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these

programs or from the use of the information contained herein.

Copyright

Copyright