SECOND EDITION Chapter 14-1 Prepared by Coby Harmon Prepared by Coby Harmon UniversityofofCalifornia, California, Santa Santa Barbara University Barbara Westmont College College Westmont E-Commerce and E-Business Chapter 14-2 Study Study Objectives Objectives An introduction to e-commerce and e-business The history of the Internet The physical structure and standards of the Internet E-commerce and its benefits The privacy expectations in e-commerce E-business and the IT enablement E-business enablement examples Intranets and extranets to enable e-business 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 Chapter 14-3 Real Real World World A few years ago, Wal-Mart affected a huge change in the EDI (Electronic Data Interchange) approach to business-tobusiness transactions Although EDI had been around for many years, the technology had advanced to allow it to be conducted for free over the 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 Chapter 14-4 Introduction Introduction to to E-commerce E-commerce and and E-business E-business E-commerce - electronically enabled transactions between a business and its customers E-business - includes not only electronic trade with customers, but also Chapter 14-5 ► servicing customers and vendors, ► trading information with customers and vendors, and ► electronic recording and control of internal processes SO An introduction to e-commerce and e-business Introduction Introduction to to E-commerce E-commerce and and E-business E-business Exhibit 14-1 E-business and E-commerce The most common method of conducting e-commerce and e-business is to use the Internet to electronically exchange data Chapter 14-6 SO An introduction to e-commerce and e-business Introduction Introduction to to E-commerce E-commerce and and E-business E-business Concept Check 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 Chapter 14-7 SO An introduction to e-commerce and e-business The The History History of of the the Internet Internet In 1965, a computer at MIT (Massachusetts) was connected to a computer in California, using dial-up telephone lines In 1969, computers at four major universities were connected via leased telephone lines Chapter 14-8 ► Grew into a network called ARPANET ► 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 SO The history of the Internet The The History History of of the the Internet Internet Two technologies developed for ARPANET: ► Packet switching ► Router E-mail was adapted to ARPANET in 1972 BBN Technologies, Chapter 14-9 ► developed the use of the @ symbol in e-mail address ► developed a communication protocol to use in ARPANET ► in the 1970s, helped develop the TCP/IP protocol SO The history of the Internet The The History History of of the the Internet Internet Chapter 14-10 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 SO The history of the Internet E-Business E-Business and and IT IT Enablement Enablement B2B: A Part of E-Business Chapter 14-30 Exhibit 14-6 E-commerce B2C vs E-Business B2B4 SO E-business and the IT enablement E-Business E-Business and and IT IT Enablement 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 14-31 SO E-business and the IT enablement E-Business E-Business Enablement Enablement Examples Examples Chapter 14-32 SO E-business enablement examples Intranets Intranets and and Extranets Extranets to to Enable Enable E-Business E-Business Three levels of network platforms Chapter 14-33 Exhibit 14-7 Internet, Extranet, and Intranet SO Intranets and extranets to enable e-business Intranets Intranets and and Extranets Extranets to to Enable Enable E-Business E-Business Concept Check Intranets are used for each of the following except a communication and collaboration b business operations and managerial monitoring c Web publishing d customer self-service Chapter 14-34 SO Intranets and extranets to enable e-business Internal Internal Controls Controls for for the the Internet, Internet, Intranets Intranets and and Extranets Extranets Exhibit 14-8 Controls to Limit Access to Intranets and Extranets Chapter 14-35 SO Internal controls for the Internet, intranets, and extranets Internal Internal Controls Controls for for the the Internet, Internet, Intranets Intranets and and Extranets Extranets Exhibit 14-8 Controls to Limit Access to Intranets and Extranets Chapter 14-36 SO Internal controls for the Internet, intranets, and extranets Internal Internal Controls Controls for for the the Internet, Internet, Intranets Intranets and and Extranets Extranets Concept Check Which of the following IT controls would not be important in an extranet? a Encryption b Password c Antivirus software d Penetration testing e All of the above are important IT controls Chapter 14-37 SO Internal controls for the Internet, intranets, and extranets XML XML and and XBRL XBRL as as Tools Tools to to Enable Enable E-Business E-Business Two languages as tools to enable e-business: ► XML (eXtensible Markup Language) ► XBRL (eXtensible Business Reporting Language) XML In Internet EDI ► Internet EDI is alternative to traditional EDI ► Uses the Internet to transmit business information between companies ► XML allows data exchange over Internet in a rich format Chapter 14-38 SO 10 XML and XBRL as e-business tools XML XML and and XBRL XBRL as as Tools Tools to to Enable Enable E-Business E-Business Traditional EDI and VAN versus Internet EDI Chapter 14-39 Exhibit 14-9 SO 10 XML and XBRL as e-business tools XML XML and and XBRL XBRL as as Tools Tools to to Enable Enable EEBusiness Business XBRL for Financial Statement Reporting Major advantages: Easily used in several formats Chapter 14-40 ► Printed in paper format ► Displayed as an HTML web page ► Sent electronically to the SEC ► Transmitted to banks or regulatory agencies ► Computer program can extract pieces of information from the XBRL file SO 10 XML and XBRL as e-business tools XML XML and and XBRL XBRL as as Tools Tools to to Enable Enable EEBusiness Business Concept Check An extensible markup language designed specifically for financial reporting is a Internet EDI b XML c XBRL d XFRL Chapter 14-41 SO 10 XML and XBRL as e-business tools Ethical Ethical Issues Issues Related Related to to E-business E-business and and E-commerce 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 Chapter 14-42 SO 11 The ethical issues in e-business and e-commerce Real Real World World Gateway Learning Corporation, the company 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 14-43 Copyright Copyright 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 Chapter 14-44 ... Exhibit 14- 4 A Simple Web Page and the HTML Source Code Chapter 14- 16 SO The physical structure and standards of the Internet The The Physical Physical Structure Structure and and Standards Standards... Chapter 14- 15 SO The physical structure and standards of the Internet The The Physical Physical Structure Structure and and Standards Standards of of the the Internet Internet The Common Standards... Internet Exhibit 14- 3 Architecture of the Internet Chapter 14- 13 SO The physical structure and standards of the Internet The The Physical Physical Structure Structure and and Standards Standards of