Computers in

Management

ADL – 06

05/13/10
Internet & E-Commerce
 What Is the Internet?
• A network of networks, joining many
government, university and private computers
together and providing an infrastructure for the
use of E-mail, bulletin boards, file archives,
hypertext documents, databases and other
computational resources
• The vast collection of computer networks which
form and act as a single huge network for
transport of data and messages across
distances which can be anywhere from the
same office to anywhere in the world.

3
Copyright 2002, William F. Slater, III, Chicago, IL, USA
 What is the Internet?
• The largest network of networks in
the world.
• Uses TCP/IP protocols and packet
switching .

Dr. Vinton Cerf,

Creator of TCP/IP
Internet Growth Trends
 Internet Growth Trends
• 1977: 111 hosts on Internet
• 1981: 213 hosts
• 1983: 562 hosts
• 1984: 1,000 hosts
• 1986: 5,000 hosts
• 1987: 10,000 hosts
• 1989: 100,000 hosts
• 1992: 1,000,000 hosts
• 2001: 150 – 175 million hosts
• 2002: over 200 million hosts
• By 2010, about 80% of the planet will be on the Internet
 Internet: The Present
Scenario
• Today, there are billions of websites
carrying terabytes of information,
which can be accessed at the click of
mouse. Problem is the slow speed of
access. People are using telephone
lines for the same. New technologies
are addressing this problem
 Internet: The Future
• Digital Wallets
• Virtual Tourism
• Internet as Information Warehouse
• Virtual Classrooms
• Web TV
 E-Mail
• Electronic mail
(abbreviated "e-mail" or,
often, "email") is a store
and forward method of
composing, sending,
storing, and receiving
messages over electronic
communication systems.
• Neither snow nor rain nor
heat nor gloom of night
stays these couriers from
the swift completion of
their appointed rounds
 Internet Relay Chat
• Internet Relay Chat (IRC) enables
people all over the world to talk
together over the Internet in real-time
sessions in virtual rooms.
• To join an IRC discussion, you need an
IRC client and Internet access. The IRC
client is a program that runs on your
computer and sends and receives
messages to and from an IRC server.
The IRC server, in turn, is responsible
for making sure that all messages are
broadcast to everyone participating in
a discussion
 Internet Telephony
A category of hardware and
software that enables people
to use the Internet as the
transmission medium for
telephone calls. For users who
have free, or fixed-price
Internet access, Internet
telephony software essentially
provides free telephone calls
anywhere in the world. To
date, however, Internet
telephony does not offer the
same quality of telephone
service as direct telephone
connections.
 Internet Fax
• The user can send a fax
through the Internet to
the fax service provider
from either a fax
machine or a computer,
which automatically
routes the fax to its
destination through the
Internet
 Internet Paging
• Also known as Buddy List
Software
• A Buddy List is a window that
shows all your buddies (friends,
family, coworkers, and others)
who are online. Whenever they
sign on, their screen names
appear in your Buddy List, and
you can communicate with them
instantly.
 File Transfer Protocol
• FTP or file transfer protocol is used to connect two
computers over the Internet so that the user of
one computer can transfer files and perform file
commands on the other computer.
• There are two computers involved in an FTP
transfer: a server and a client. The FTP server,
running FTP server software, listens on the
network for connection requests from other
computers. The client computer, running FTP
client software, initiates a connection to the
server. Once connected, the client can do a
number of file manipulation operations such as
uploading files to the server, download files from
the server, rename or delete files on the server
and so on.
 Usenet
• An Internet-based bulletin
board that consists of a
set of "newsgroups" with
names that are classified
hierarchically by subject.
"Articles" or "messages"
are "posted" to these
newsgroups by people on
computers with the
appropriate software --
these articles are then
broadcast to other
interconnected computer
systems via a wide variety
of networks.
 World Wide Web
• A system of Internet servers that support
specially formatted documents. The
documents are formatted in a markup
language called HTML (Hyper Text Markup
Language) that supports links to other
documents, as well as graphics, audio, and
video files. This means you can jump from
one document to another simply by
clicking on hot spots. Not all Internet
servers are part of the World Wide Web.
 Intranets

What are Intranets?

• Intranet is Intra+ Net so an Intranet is
an internal or private Internet used
strictly within the boundaries of a
company, university, or organization.
"Inter" means "between or among,"
hence the difference between the
Internet and an Intranet.
 Intranets
A technical definition
• An Intranet is a network based on
the internet TCP/IP open standard.
An intranet belongs to an
organization, and is designed to be
accessible only by the organization's
members, employees, or others with
authorization. An intranet's Web site
looks and act just like other Web
sites, but has a firewall surrounding
it to protect from unauthorized
access.  
 Extranet
• An extranet is a private network that
uses Internet protocols, network
connectivity, and possibly the public
telecommunication system to securely
share part of an organization's information
or operations with suppliers, vendors,
partners, customers or other businesses.
An extranet can be viewed as part of a
company's Intranet that is extended to
users outside the company (eg: normally
over the Internet).
 Extranet
A private internet over the
Internet".
 Applications
Companies can use an extranet to:
• Exchange large volumes of data using Electronic
Data Interchange (EDI)
• Share product catalogs exclusively with wholesalers
or those "in the trade"
• Collaborate with other companies on joint
development efforts
• Jointly develop and use training programs with other
companies
• Provide or access services provided by one company
to a group of other companies, such as an online
banking application managed by one company on
behalf of affiliated banks
• Share news of common interest exclusively with
partner companies
 VIRTUAL PRIVATE
NETWORKS
 Virtual Private Network is a type of
private network that uses public
telecommunication, such as the
Internet, instead of leased lines to
communicate.

 Became popular as more employees

worked in remote locations.
 Private Networks
vs.
Virtual Private Networks
 Employees can access the network (Intranet) from
remote locations.

 Secured networks.

 The Internet is used as the backbone for VPNs

 Saves cost tremendously from reduction of

equipment and maintenance costs.

 Scalability
Traditional Connectivity
 Advantages: Cost
Savings
• Eliminating the need for expensive
long-distance leased lines
• Reducing the long-distance
telephone charges for remote
access.
• Transferring the support burden to
the service providers
• Operational costs
 Advantages: Scalability
 Flexibility of growth

 Efficiency with broadband technology

 Electronic
communication tools
• Electronic communication tools send
messages, files, data, or documents
between people and hence facilitate the
sharing of information. Examples include:
• synchronous conferencing
• e-mail
• Instant Messaging
• faxing
• voice mail
• Wikis
• Web publishing
 Fundamentals of E-
commerce
• Electronic commerce (also referred
to as EC, e-commerce or
ecommerce) consists primarily of
the distributing, buying, selling,
marketing, and servicing of products
or services over electronic systems
such as the Internet and other
computer networks
 Major Categories
• Business-to-Consumer(B2C)
• Business to Consumer commerce, “applies
to any business or organization that sells
its products or services to consumers over
the Internet for their own use.” In other
words, it provides a direct sale between
the supplier and in the individual
consumer.
 Major Categories
• Business-to-Business (B2B)
• Business-to-Business involves online
transactions between businesses.
Examples of B2B include online
companies that specialize in
marketing strategies, advertising,
email companies, internet
consultants, website development
etc.
 WWW & E-Commerce
• WWW is a system of Internet servers
that support specially formatted
documents. The documents are
formatted in a markup language
called HTML (Hyper Text Markup
Language) that supports links to
other documents, as well as
graphics, audio, and video files.
 WWW & E-Commerce
• Hypertext is text which contains links
to other texts.
• Hypermedia is a term used for
hypertext which is not constrained to
be text: it can include graphics, video
and sound
What is E-Commerce Contd.
• In summary, e-commerce is the
– use of electronic communication to do business
• Specifically, the transfer of information
(transactions), over the Internet
• Some people use the term e-business to
refer to all the categories of e-commerce
– E.g. IBM defines e-business as:
• The transformation of key business processes
through the use of internet technologies
Business Processes Well-
suited to Particular Type
of Commerce
• E-commerce
– Sale/purchase of books & CDs, travel
services, investments and insurance
services
– Online delivery of software
– Online shipment tracking
Business Processes Well-
suited to Particular Type
of Commerce
• E-commerce + Traditional
– Sale/purchase of automobiles and
residential real estate (e.g. do research
online then buy from a dealer or real
estate agent)
– Online banking
– Roommate matching service
Advantages of E-commerce
• Increases sales, decreases cost
– Allows small businesses to have global
customer base
– Reduced cost through electronic sales
enquires, price quotes and order taking
• Provides purchasing opportunities for
buyers (businesses can identify new
suppliers and partners)
• Increase speed and accuracy for
exchanged information, thus reducing cost
 Advantages of E-commerce
Contd.
• Business can be transacted 24hrs a day
• The level of detail of purchase information
is selected by user
• Digital products can be delivered instantly
• Tax refunds, public retirement and welfare
support costs less when distributed over
the Internet
• Allows products and services to be
available in remote areas, e.g. remote
learning
 Disadvantages of E-
commerce
• Inability to sell some products (e.g. high
cost jewelry and perishable foods,
although supermarkets like
www.Tesco.com delivers to your home)
• The newness and evolution of the
current technology
• Many products require a large number of
people to purchase to be viable
• High capital investment
 Disadvantages of E-
commerce Contd.
• Difficulty in integrating current databases
and transaction processing systems into e-
commerce solutions
• Cultural and legal obstacles
– Transmission of credit card details
– Some consumers resistant to change
– Laws are unclear
• Shipping profile: Products with a low value-
to-weight ratio that can not be efficiently
packed and shipped are unsuitable (use
traditional commerce)
 E-commerce Categories
• There are five general e-commerce categories:
Business to Consumer (or B2C) e-commerce
Business to Business (or B2B) e-commerce (sometimes called
e-procurement)
Business processes that support buying and selling activities
Consumer-to-consumer (or C2C) e-commerce
Business-to-government (or B2G) e-commerce
 B2C e-commerce
• Description
– Businesses sell products or services to
individual customers (consumers)
• Example
– Walmart.com sells merchandise to
consumers through its Web site
• Web site
– www.walmart.com
 B2B E-commerce
• Description
– Businesses sell products or services to
other businesses
• Example
– Grainger.com sells industrial supplies to
large and small businesses through its
Web site
• Web site
– www.grainger.com
 Business Processes
• Description
– Businesses and other organisations maintain and
use information to identify and evaluate
customers, suppliers and employees (and to
support buying, selling hiring, planning and other
activities). More and more this information is
being shared
• Example
– Dell Computer uses secure internet connections
to share current sales and forecasts with suppliers
who use it to plan their production, therefore they
deliver the right quantities of components at the
right time
 C2C e-commerce
• Description
– Participants in an online marketplace can buy
and sell goods with each other
• Example
– Consumers and businesses trade with each
other on eBay.com
• Web site
– www.ebay.com
 B2G e-commerce
• Description
– Business sell goods or services to
governments and government agencies
• Example
– Cal-Buy portal for businesses that want
to sell online to the State of California
• Web site
– www.pd.dgs.ca.gov/calbuy/default.htm
 E-commerce Categories
Example
• You are a computer manufacturing
company who performs the following
activities on the Internet:
– Sells computers to individuals (B2C)
– Purchases parts (e.g. hard drives, power
supplies etc.) from a supplier (B2B)
– Hires staff, manage customer accounts,
advertise, etc. (Business processes)
– Sells computers to the Government to be used
in schools (B2G)
– On eBay.com individuals buy and sell this brand
of computers (C2C)
Payment Systems
• Credit cards
• Debit cards
• Charge cards
• Other payment
methods
– Paypal
– Metered payments
 Payment Systems: The
Basics
• Payment systems are still evolving
• Electronic payments are far cheaper
than mailing paper checks
• Cost of billing a person by mail
ranges from US$1 to US$1.50
• Billing a person electronically cost
about US$0.50
• Replacing paper bills also saves on
trees
 Primary Payment Methods
• There are currently four primary payment
methods:
– Cash
– Checks
– Credit cards (most popular method online)
• Accounts for more than 85% worldwide
consumer transactions
– Debit cards
• In the US electronic transfer is also a
growing payment method
 Payment Cards
• The main categories of payment cards
are:
– Credit cards (e.g. Visa)
• Spending limit based on credit history
• Interest is charged on outstanding balances not
paid off within a given time
• Accepted worldwide
• User protection facilitated by a 30-day period
that a purchase may be disputed
• Merchant account (that accepts credit card
payments) required by the business
 Payment Cards Contd.
– Debit cards
• The sale amount is removed from user’s
account and transfers to the sellers account
• Limited by funds in account plus overdraft (if
present)
– Charge cards (e.g. American Express)
• Has no spending limit
• The amount due on the card is due at the
end of the billing period
• They do not accumulate interest payments
 Payment Cards Contd.
• Some vendors provide single-use-
cards which are valid for a single
transaction
– A unique card number is issued
– This helps with card details security
– Eg. MINT & OXYGEN
 Payment Cards Contd.
• Advantages of Payment Cards
– In the US card holder’s liability is limited to
US$50 when used fraudulently
– Accepted worldwide
• Currency conversion handled by card issuer
– Ease of use, no special hardware required
 Payment Cards Contd.
• Disadvantages of Payment Cards
– Service companies charge merchants
per-transaction and monthly processing
fees
– Price of goods for the consumer might
be slightly higher as a result
• A limit is placed on the minimum amount
allowed to spend (e.g. 5 pounds in the UK)
 Payment Acceptances and
Processing
• The merchant authenticates the payment card
to ensure it is valid and not stolen
• The merchant checks with the payment card
issuer to ensure that credit or funds are
available and puts a hold on the credit line or
the funds needed to cover the charge
• Settlement occurs, usually a few days after the
purchase, which means that funds travel
between banks and are placed into the
merchant’s account
Payment Acceptance Process in E-Commerce site using Merchant AC
 THIRD PARTY
AUTHENTICATION
• Ensures two way authentication
• Ensures that the person making the
payment has legal right to make that
particular payment & also that the site
receiving the payment has the legal right
to receive that payment
• Two Competing Algorithms use by TPA are
• SSL [ Secured Socket Level]
• SET [Secured Electronic Transaction]
 SSL [Secured Socket Layer]
• Ensure genuineness of Website & Ensure the
User Authentication ID.
• Once the parties are involved, it creates a secure
pipe for further communication.
• Uses both e-commerce transaction as well as
secure pipe of further communication.
• Minimum in cost.
• Best suited for B2C
 SET [Secured Electronic
Transaction]
• Secured Transaction is prompted
jointly by IBM & Visa card.
• Used strictly for E-commerce
Transaction.
• SET is rigorous and hence secured.
• High Setup cost.[ $50,000]
• Feasible for B2B.
• “SETlite” is new version of SET.
 Tax Effects
• Two types of good delivery methods after
customer put an order via e-commerce
transaction.
1. Mail/Courier
2. Online Itself (Download)
“If payment & delivery is done online, NO
Tax for buyer.”
e.g. Buying Win Vista online & Download it online.
“Tax is payable, when a transaction involves
identifiable party (Physical Location)”
e.g.. If Buyer wants delivery of DVD in his postal address
from US.
 Computers in
Management

ADL – 06
Session III

05/13/10
 DBMS

• A Database Management System

(DBMS) is a set of
computer programs that controls the
creation, maintenance, and the use
of the database of an organization
and its end users.
 What is a Database?
A collection of related facts

Filing Cabinet
Hard disk full of data

Diary

Library
 What is a DBMS?
• DBMS - DataBase Management System
• Multiple Billion dollar market for DBMS
products and services !
• A software system for defining,
constructing and manipulating databases
for various applications
• DBMS may be general purpose (business
applications) or special purpose (biological
databases, geographic information, ...)
 The DBMS facilitates ...
• Defining a database
– Specifying the types, structures, and
constraints for the data
• Constructing a database
– Storing the data on a storage medium
• Manipulating a database
– Querying and updating the database
What is a Database System?
Users/Programmers

DATABASE SYSTEM

Application
Programs/Queries
DBMS DBMS SOFTWARE
+
Software to
Database Process
= Queries/Progra
ms to
Software
Database System Access
Stored Data

Stored
Database Stored
Definition Database
(Meta-Data)
 Database System
Components
• The Stored Database
– A collection of related facts
• The DBMS
– The software that defines, constructs and
manipulatesa database
• The Applications
– The programs (in specific languages) that
manipulate the database
• The Users
– People who use the database system, through
the DBMS interface or through application
programs
 Users of the Database
System
• Database Administrators
• Database Designers and Application
Programmers
• End Users
– Casual End Users
– Parametric End Users
– Sophisticated End Users
 Why use a Database
System?
• The database approach provides a central
store of data and meta-data, and thus
– Is not internal to an application program, as in
traditional file processing environments
– Provides shared access for multiple users
– Relieves the application programmer from
various tedious book keeping tasks
– Provides the facility to change the data
without affecting the applications
 The DBMS Software
Application Programmers
Parametric
DBA Staff Casual Users Users
Application
Programs
DDL PRIVILEGED Interactive Host
Statements COMMANDS Query Language
Precompiler
Compiler
DDL Query DML
Compiler o o Compiler Statements
System
Catalog Execution DML Canned
o
Compiler Transactions
o
Runtime
Database Execution
Execution Processor

Stored Data Concurrency Control

o Backup/ Recovery/Subsystems
Manager

Stored Database
 Typical Functions of the
DBMS
• Controlling redundancy
• Restricting unauthorized access
• Providing multi-user interfaces
• Representing complex relationships
• Enforcing integrity constraints
• Providing backup and recovery
 Controlling redundancy
• Users of traditional file
processing systems, each had a
“copy” of relevant data, causing
– Duplication of effort
– Wastage of storage space Stud-No Name Degree Subject Grade
– Inconsistent data 90
87
Smith
Brown
BA
BA
CS182 7
CS182 7
• However, redundancy 98 James BSc CS181 6
90 Smith BIT CS181 6
sometimes enhances
performance - DBMS provides an Stud-No Name Degree Finance-Type
environment where redundancy 90
87
Smith
Brown
BIT
BA
Self
UQ Scholar
can be controlled 98 Harrison BSc Self
 Restricting unauthorized
access
Different user groups may have different access privileges
(Create/Alter, Update, and Retrieve), which are controlled
through DBMS security sub-system, through the use of
Accounts & Passwords
• Casual users may not have access to confidential data, e.g
medical records, salary packages, police reports
• Parametric users may be given update access, but are
generally not allowed to change the structure of data
• Database administrators (DBAs) generally have highest
privileges, create user accounts and enforce restrictions
 Providing multi-user
interfaces
• Query Languages for Casual End Users
• Programming Language Interfaces for
Application Programmers
• Forms and Commands for Parametric
Users
- Graphical User Interfaces (GUI)
- Interface for Web Enabling
- Natural Language Interfaces
 Complex relationships
DBMS has ability to represent complex
relationships among the data
Stud-No Name Degree Subject Grade
90 Smith BA CS182 7 James is doing BSc
87 Brown BA CS182 7
98 James BSc CS181 6 CS181 is the code for
90 Smith BIT CS181 6 Software Engineering

Sub-Code Title Credit Department

CS181 Software Eng 12 CSEE
CS182 Intro to Info Sys 12 CSEE CO362 is offered by the
CO362 Business Info Sys 10 Commerce Commerce Department
 Enforcing integrity
constraints
• The DBMS has the capability to define and enforce integrity
constraints which are restrictions placed on the data, based on
the semantics or meaning of the data
– Every Subject must have a unique Code
– A student cannot have 2 different grades for the same
subject
– A student cannot enroll in more than four 12-credit
subjects in a semester
– Student No must be a 9 digit integer
• DBMS cannot check spelling or typing errors, for example, if 5
was entered as the grade of a student getting 7 - DBMS will not
identify the error!
 Providing backup and
recovery
DBMS provides facility to recover from
hardware and software failures
through its backup and recovery Deposit $200 into ATM
sub-system
• An update program is executing
• Computer System fails in the middle system fails
of the update
• DBMS restores the database to a
state prior to the update and restarts
the update program Deposit not recorded in
your a/c
 Module 1 - Review
Key definitions:
• Database
• DBMS (Many Functions)
• Database System = DBMS +
Database
 Enterprise Resource
Planning (ERP)
• Enterprise Resource Planning (ERP) is a
term usually used in conjunction with ERP
software or an ERP system which is intended to
manage all the information and functions of a
business or company from shared data stores.
[1]
• An ERP system typically has modular hardware
and software units and "services" that
communicate on a local area network. The
modular design allows a business to add or
reconfigure modules (perhaps from different
vendors) while preserving data integrity in one
shared database that may be centralized or
distributed