INSS737 - Management of Information Systems - Fall 2000

Electronic Commerce Introduction

Lecture notes

Electronic commerce has its roots in three different IT initiatives: Inter Organizational Systems (order entry and purchasing systems), transaction automation (credit card transactions), and electronic funds transfer (financial transactions).

  1. Inter Organizational Systems (IOS).
  2. Read the textbook materials in chapter 4 for an excellent description of IOS concepts and two detailed case studies: American Hospital Supplies and American Airlines. These early initiatives have led to the deployment of EDI - Electronic Data Interchange. As we discussed previously this is the reason behind the success stories of today, like in the case of Wal-Mart. EDI is based on trading partner agreements and the use of standards. To see a detailed description of some of EDI standards and its role in Electronic Commerce visit this site.

  3. Transaction automation (TA)
  4. In our first case - VeriFone - we discussed at length TA and the role that VeriFone played in the development of this area. We also saw that in it is now a part of HP and that the reason for this merge/acquisition was the Internet and particularly the Web and the emergence of Electronic Commerce on the Web.

  5. Electronic funds transfer (EFT)
  6. This is the oldest large-scale electronic commerce root. Banks have been exchanging financial transactions through Automated Clearing House of the Federal Reserve Network for decades. Checks, deposits, payments are processed and funds exchanged between financial institutions automatically every night. The Electronic Funds Act of 1978 has defined and regulated these transactions. Read this article for more details on EFT.

  7. Modern Electronic Commerce (EC)

    Modern Electronic Commerce includes all prior technologies and is migrating to the Internet, particularly the Web. Some references on EC follow:

Case instructions

We will use the same simple framework to analyze the HEB (H.E.Butt Grocery Company) case: (a) what is the problem, (b) what are the alternatives, and (c) what are the recommendations; like we have done before. We will discuss HEB first on the Web and then in class.

1. What is the problem?

Who owns the problem? Why is it a problem? Is there a decision involved? If it is a problem, what are the pros and cons that makes it a problem?

2. What are the alternatives?

What can be done? There is always the do nothing alternative. If everything went well (rosy scenario) what we would like to do? If everything went wrong (doomsday scenario) what should we do? What can we do in between the rosy and the doomsday scenarios? What are pros and cons of each alternative?

3. What is you recommendation?

What criteria should we use to select the most suitable alternative in the case? Why you are recommending one alternative versus the others? How this alternative satisfies your criteria? How to implement the alternative you selected?