Notesale: Turn your study into money

Document Preview

Extracts from the notes are below, to see the PDF you'll receive please use the links above

---

WEEK 1&2 LECTURE NOTES BUSINESS INFORMATION STRATEGY
1
...

Strategic management: is the dynamic process of formulation, implementation, evaluation and
control of strategies to realize the organizations strategic intent
...
THE STEPS OF BUSINESS STRATEGY FORMULATION










Identify the existing business model
Identify organization Mission, Vision, values and goals
External analysis, opportunities and threats
Internal analysis, strengths and weaknesses
Perform SWOT strategic analysis
Identify functional level strategies
Identify business level strategies
Identify Global strategies
...


3
...
From
multi-national corporations who maintain mainframe systems and databases to small businesses
that own a single computer
...
Email was one of the early drivers of the Internet, providing a simple
and inexpensive means to communicate
...
Voice over internet protocol (VOIP) telephones and smartphones offer even more high-tech ways for employees to communicate
...
Inventory management systems track the
quantity of each item a company maintains, triggering an order of additional stock when the
quantities fall below a pre-determined amount
...
The POS system ensures
that each time an item is sold, one of that item is removed from the inventory count, creating a
closed information loop between all departments
...

Today, most companies store digital versions of documents on servers and storage devices
...
Companies are able to store and maintain a tremendous amount of
historical data economically, and employees benefit from immediate access to the documents
they need
...
Progressive companies use that
data as part of their strategic planning process as well as the tactical execution of that strategy
...
The information can be used to track profitability over time, maximize return
on investment and identify areas of improvement
...

Customer Relationship Management
Companies are using IT to improve the way they design and manage customer relationships
...
If a customer calls a call center
with an issue, the customer support representative will be able to see what the customer has
purchased, view shipping information, call up the training manual for that item and effectively
respond to the issue
...
The customer has a better, more focused experience and the company
benefits from improved productivity
...
It is a medium that permits large volumes of information to be
stored, processed or transferred at lightning speed
...

Secondly, Information Technology is an enabler
...
Most corporations and institutions use
Information Technology to enable functions that drive their core business
...
Whatever the function, digital communication makes the storage, processing or
transfer of information more efficient than ever before
...
It just enables them to function
at a greater scale much more efficiently
...
These categories include function performance, communication through
2

networking, management and enterprise roles
...
These
systems enable businesses to function effectively and efficiently
...
Examples of common IT systems that enhance workplace functions are word
processor applications, spreadsheet applications, statistical analysis software and computer aided
design (CAD) programs
...

Examples range from simple e-mail (electronic mail) to blogs, wiki sites, IM (instant messaging)
and electronic conferencing systems
...

Management IT systems
Management IT systems (MITS) can be defined as planned applications that are designed to
process data and transform the processed data into useful information for management decision
making
...

Enterprise IT Systems
Enterprise IT systems are technologies designed to integrate and manage entire business
processes for large organisations
...
Transmission of information can either be internal or external
...
Another good example of software application
within this category is Customer relationship management software (CRM)
...
Organizational structures
a) Hierarchical structure
A hierarchical business structure is a traditional approach to organizing a business where
emphasis is placed on top-down reporting relationships
...

Also known as a vertical organizational structure is based on the reporting chain from the head of
the company down
...
One disadvantage to this sort of structure is that it tends to be bureaucratic and does not
foster communication between people at different levels
...


Advantages of Hierarchical Structure
• Employees recognize defined levels of leadership within the organization; authority and levels
of responsibility are obvious
...

• Hierarchical structures promote developing employees as specialists
...

• Employees become loyal to their departments and look out for the best interest of their area
...
With an
effective hierarchical structure, reporting relationships are clearly defined and each employee
only has one direct report responsibility
...
In the same way, employees turn to supervisors who
disseminate information within their work group or functional area
...

4

Decision-Making Efficiency
With more formally defined roles and some separation between management and employees,
employees have to consult in all they do
...

Power
A drawback of hierarchy is that it can create too much distance between business leaders and
employees
...
When too much authority lies in the hands
of one leader or a concentrated group of leaders, power can set in
...
At the extreme, it
could lead to corruption if leaders don't feel a sense of internal oversight on their actions
...
A formal hierarchy creates defined vertical
and horizontal division in the company
...
It also goes
against functional or departmental team interaction
...
The flat organization supervises employees less
while promoting their increased involvement in the decision-making process
...
The organizational structure could group those who
work in a specific department together, or the grouping could be based on those who work in a
functional area such as finance or marketing
...

Disadvantages are that as the company grows, there may be a lack of integration across the
different functions or departments
...

• It removes excess layers of managements improves the coordination and speed of
communication between employees
...

• Eliminating the salaries of middle management reduces an organization’s budget costs
...

• Flat organizations tend to produce a lot of generalists but no specialists
...

• Flat structure may limit long-term growth of an organization; management may decide against
new opportunities in an effort to maintain the structure
...

Problems with Digital Communication
A network-based organizational structure depends on clear lines of communication to deliver
project assignments and due dates to employees
...
Work progress
effectively slows to a crawl while IT professionals work to repair digital communication issues
...

Too Many Supervisors
The nebulous nature of a network or matrix organization structure requires an extra layer of
oversight to manage employees operating in many different locations
...
All it takes is for a couple
managers to deliver work orders in different ways to the same employees to create errors in
project development plans and cause delays in completion as employees sort through two
different sets of assignment details
...
Because
of this, sharing skilled workers between departments is a mandatory part of the process for the
organization to function properly
...
Skilled workers in
high demand may have multiple assignments in progress at any given time depending on the
6

company's total client roster
...

Increased Work Stress
The freedom associated with working away from a traditional office environment can disappear
in a network-based or matrix organizational structure
...
Employees and managers may feel unable to associate with
traditionally defined job roles
...
Project development and assignment completion can quickly
break down in this murky environment
...
The matrix type of project
management system involves putting together people from different functional areas, such as
marketing and systems, to work together for the project time frame
...
A disadvantage is that employees are
responsible to their project team as well as to their functional areas
...

Functional Structure
The organization is divided into segments based on the functions when managing
...
As an example, take a
software company
...
This way,
management of this functional group becomes easy and effective
...
The low cost can be achieved by such companies due to the efficiencies
within functional groups
...
In this case, organization may
find it difficult to achieve some organizational objectives at the end
...
In this type of organization, for example, there may be a marketing department, a sales
department and a production department
...
However, one of the drawbacks to a functional structure is that the coordination
and communication between departments can be restricted by the organizational boundaries of
having the various departments working separately
...
Each
division is quipped with its own resources in order to function independently
...

Divisions can be defined based on the geographical basis, products / services basis, or any other
measurement
...
It can have microwave division,
turbine division, etc
...
In
that sense, each division can be considered as a micro-company with the main organization
...
For example, the now-defunct Tecumseh Products Company was
organized divisionally--with a small engine division, a compressor division, a parts division and
divisions for each geographic area to handle specific needs
...
Divisional structure is costly
because of its size and scope
...


Matrix Structure
When it comes to matrix structure, the organization places the employees based on the function
and the product
...
In this type of an organization, the company uses teams to complete tasks
...
This way, there are many teams in this organization such as
software engineers of project A, software engineers of project B, QA engineers of project A, etc
...
Typically used in large multinational companies, the matrix
structure allows for the benefits of functional and divisional structures to exist in one
organization
...


9

CHAPTER FOUR: Organizational strategy and process
Organizational strategy and process
Concept of strategy: The term strategy is derived from a Greek word strategos which means
generalship
...

Definition for strategic management: Strategic Management is defined as the dynamic process
of formulation, implementation, evaluation and control of strategies to realize the organizations
strategic intent
...

10

Meaning for Objectives: Objectives are the ends that state specifically how the goals shall be
achieved
...

Role of Objectives:

Appraisal
...


Meaning of vision: A vision statement is sometimes called a picture of your company in the
future
...

Meaning for mission: A mission statement is a brief description of a company‟s fundamental
purpose
...

Corporate Governance: Corporate Governance involves a set of relationships amongst the
company‟s management its board of directors, shareholders and other stakeholders
...

Definition for Business: A company should define its business in terms of three dimensions:
1
...
What is being satisfied (what customer needs)

11

3
...
Stake
holders can support the effective strategic management of an organization
...
The obligation of any
business to protect and serve public interest is known as social responsibility of business
...
Responsibility towards owners: Owners are the persons who own the business
...

Run the business efficiently

Responsibility towards Investors: Investors are those who provide finance by way of
investment in shares, bonds, etc
...
Ensuring safety of their investment Regular payment of interest
...
If the
employees are satisfied and efficient, then the business can be successful
...

12

Responsibility towards customers: No business can survive without the support of customers
...


Responsibility towards suppliers: Suppliers are businessmen who supply raw materials and
other items required by manufacturers and traders
...
Payment of fees, duties and taxes regularly as well as
honestly Conforming to pollution control norms set up by government Not to indulge in
restrictive trade practices
...
They all are the members of the society
...
The environment of any
organization is the aggregate of all conditions events and influences that surround and affect it
...

Environmental scanning is defined as „monitoring, evaluating, and disseminating of information
from external and internal environments to managers in organizations so that long term health of
the organization will be ensured and strategic shocks can be avoided
...

Terms related to organizational environment
Industry: An industry can be defined as a group pf companies offering products services that are
close substitutes for each other that is product or services that satisfy the same basic customer
needs
...

Industry and sector: An important distinction that needs to be made is between an industry and
a sector
...

Industry and market segments: Market segments are distinct groups of customers within a
market that can be differentiated from each other on the basis of their distinct attributes and
specific demands
...
It has a sustained competitive advantage
when it is able to maintain above average profitability over a number of years
...

Resources: Resources are financial, physical, social or human, technological and organizational
factors that allow a company to create value for its customers
...

Generic Strategic Alternatives
Meaning of Corporate Strategy: Corporate strategy helps to exercise the choice of direction
that an organization adopts
...
The corporate
strategy in both these cases would be about the basic direction of the firm as a whole
...
Expansion strategies: The corporate strategy of expansion is followed when an organization
aims at high growth by substantially broadening the scope of one or more of its businesses in
terms of their respective customer groups, customer functions and alternative technologies singly
or jointly in order to improve its overall performance
...
Stability strategies:
The corporate strategy of stability is adopted by an organization when it attempts an incremental
improvement of its performance by marginally changing one or more of its businesses in terms
16

of their respective customer groups, customer functions and alternative technologies
respectively
...
Retrenchment strategies:
The corporate strategy of retrenchment is followed when an organization aims at contraction of
its activities through a substantial reduction or elimination of the scope of one or more of its
businesses in terms of their respective customer groups, customer functions or alternative
technologies either singly or jointly in order to improve its overall performance
...
Combination strategies:
The combination strategy is followed when an organization adopts a mixture of stability,
expansion and retrenchment strategies either at the same time in its different businesses or at
different times in one of its businesses with the aim of improving its performance
5
...


17

CHAPTER SEVEN: STRATEGIC ALLIANCE
Strategic Alliance
Meaning: A strategic alliance is a formal relationship between two or more parties to pursue a
set of agreed upon goals or to meet a critical business need while remaining independent
organizations
...


Disadvantages of strategic Alliance:

locking the possibility of cooperating with competing
companies, thus possibly even denying the company various financing options
...

Gap analysis
Gap Analysis Meaning: In gap Analysis, the strategist examines what the organization wants to
achieve (desired performance) and what it has really achieved (actual performance)
...


18

CHAPTER EIGHT: FORMULATING A BUSINESS MODEL
FORMULATING A BUSINESS MODEL
To create a successful business model, strategic managers must:
1
...

2
...

Competitive positioning and the Business model:
1
...
To craft a successful model a company must first define its business, which entails decisions
about
a
...
Customer groups or what is to be satisfied
c
...

The decision managers make about these three issues determine which set of strategies they
formulate and implement to put a company’s business model into action and create value for
customers
...

Customer needs: are desires, wants that can be satisfies by means of the attributes or
characteristics of a product a good or service
...
Factors determine which
products a customer chooses to satisfy these needs:
customers

offer customers a low prices products and do not engage
in much product differentiation
Companies that seek to create something unique about their product differentiation, their
products to a much greater degree that others so that they satisfy customers needs in ways other
products cannot
...
A company obtains a competitive advantage when it creates makes and sells
a product in a way that better satisfies customer needs than its rivals do
...
Formulating the Business model
3
...
Customer groups
are the sets of people who share a similar need for a particular product
...
In the car market, for example some customers want basic
transportation and others want the thrill of driving a sports car
...

4
...
Within each customer group there are often
subgroups composed of people who have an even more specific need for a product
...

A company searching for a successful business model has to group customers according to the
similarities or differences in their needs to discover what kinds of products to develop for
different kinds of customers
...

Three Approaches to Market Segmentation:
No Market segmentation: First a company might choose not to recognize that different
market segments exist and make a product targeted at the average or typical customer
...

High Market segmentation: Second a company can choose to recognize the differences
between customer groups and make a product targeted toward most or all of the different market
segments
...

Focused Market segmentation: Third a company might choose to target just one or two
market segments and decide its resources to developing products for customers in just these
segments
...

FUNCTIONS OF A BUSINESS MODEL

20

This describes the method or means by which a company tries to capture value from its business
...

The business model concentrates on value creation
...

The model provides the basic template for a business to compete in the market place, it provides
a template on how the firm is going to make money, and how the firm will work with internal
players (firm’s employees and managers) and external players (stakeholders such as customers,
suppliers, and investors)
...
This means that a business
model’s success is reflected in its ability to create returns that are greater than the (opportunity)
cost of capital, invested by its shareholders and bondholders
...

THE PROTERS FIVE FORCES MODEL
The porter’s model provides a simple perspective for assessing and analyzing the competitive
strength and position of a corporation or business organization
...
Since
then it has been widely used by practitioners and academics alike in analyzing hundreds of
organizations
...
It also includes practical guidance and advice for the students to analyze
organizations using this model
...
The McKinsey 7S model was named after a consulting company,
McKinsey and company, which has conducted applied research in business and industry
...
The McKinsey 7S Framework was created as a
recognizable and easily remembered model in business
...

Description of 7Ss:
Strategy: Strategy is the plan of action an organization prepares in response to, or anticipation of
changes in its external environment
...
Organizations are structured in a variety of ways, dependent on
their objectives and culture
...
For example, a company may follow a particular process
for recruitment
...
It
includes the dominant values, beliefs and norms which develop over time and become relatively
enduring features of the organizational life
...
The importance of
human resources has thus got the central position in the strategy of the organization, away from
the traditional model of capital and land
...
This may be to make
money or to achieve excellence in a particular field
...

Information systems
This is a collection of interrelated components that collect, process, store and provide an output
or information needed to complete a business task
...
Transaction processing systems: They automate data about business activates
...

2
...
They are systems used by managerial level of an organization
...
Decision support systems:-systems used for decision making
...
They are systems used at the managerial level of an
organization
...
Executive Information systems: A highly interactive system that provides a flexible access to
information for monitoring results and general business conditions: They are systems used at
strategic level of an organization
...
Basically system software is a collection of programs to provide
service to other programs
...
An example may be software required for weather forecasting
...

(iii) Embedded software: This type of software is placed in “Read-Only-Memory (ROM)” of
the product and control the various functions of the product
...
The embedded
software handles hardware components and is also termed as intelligent software
...
The software designed to process
business applications is called business software
...
It may also be a data
24

warehousing tool which helps us to take decisions based on available data
...

(v) Personal computer software: The software used in personal computers is covered in this
category
...
Examples are expert systems, artificial neural network, signal processing
software etc
...

Examples are CGI, HTML, Java, Perl, DHTML etc
...
Huge computing is normally required to process data
...

FIRST CONTINOUS ASSESSMENT TEST (C
...
T) ON 27TH JUNE 2013

25

CHAPTER TEN: OVERVIEW OF INFORMATION TECHNOLOGIES
FOR BUSINESS
1
...
Telecommunication has taken the form of cell phones and wireless
telephones, Internet networks, fax machines and computers
...
Communication is a crucial aspect of any business, and the
availability of telecommunication assists a business in operating efficiently
...
Paperless
offices in which email messages are the primary mode of communication cut the cost of
purchasing paper, printing, disposing and recycling
...

Email technologies can play a key role in ensuring that telephone calls are made less
often, thus lowering the cost of business communication
...
Compared to older modes of communication such
as handwritten letters, information is exchanged more effectively within a shorter period
of time
...
In contrast, a written complaint would take a longer time
to both reach the company and for the complaint to be addressed
...
This means businesses
have the opportunity to reach out to more customers in a shorter time
...

Improved Communication Logistics
Businesses spend a substantial amount of money and time in training, traveling and
communicating with customers
...
Teleconferencing involves
the use of Internet connection and a phone line to communicate with people who are far
away
...

Teleconferencing enables businesses to make decisions more quickly, especially if these
businesses have overseas partnerships, because customers and business partners involved
have instant face-to-face communication to exchange information without having to
travel far or wait too long for correspondence from the other side
...

Marketing and Advertising
26

Marketing and advertising campaigns are important for most businesses
...
These types of campaigns expose a business' services and
products to a wider audience
...

Efficient Customer Service
The application of telecommunications systems allows the business to improve its
customer service
...
Online payment systems improve the process of cash transactions and
reduce the costs incurred -- for example, reduction in interest charges and bank fees
...
The business can tailor the marketing process to suit a
variety of clients who visit the website
...
Telecommunication systems also allow the business to expand its services to the
national or global market, which in turn may lead to an increase in sales and profits
...
COMPUTER NETWORKS
A computer network is defined to be an interconnection of two or more computers via a network
cable with an aim of exchanging information and sharing resources such as printers or faxes
...
(The term also implies the security policy
that is used with the programs
...
The classification includes the following:
There are three categories of computer networks

LAN - Local Area Network
A LAN connects network devices over a relatively short distance
...
In TCP/IP networking, a LAN is often but not always implemented as a single IP
subnet
...
They also tend to use certain connectivity
technologies, primarily Ethernet and Token Ring
...
A MAN is typically owned an operated by a single entity
such as a government body or large corporation
...
The Internet is the largest WAN,
spanning the Earth
...
A network device
called a router connects LANs to a WAN
...
A WAN differs from a LAN in several important ways
...


Wireless Local Area Network - a LAN based on WiFi wireless network technology

Campus Area Network - a network spanning multiple LANs but smaller than a MAN,
such as on a university or local business campus
...


System Area Network - links high-performance computers with high-speed connections
in a cluster configuration
...

NETWORK ARCHITECTURES
Although every device on a LAN is connected to every other device, they do not necessarily
communicate with each other
...

Client/Server Networks
On a client/server network, every computer has a distinct role: that of either a client or a server
...
Typically,
servers are located in secured areas, such as locked closets or data centers (server rooms), because
they hold an organization’s most valuable data and do not have to be accessed by operators on a
continuous basis
...


28

A dedicated server computer often has faster processors, more memory, and more storage space
than a client because it might have to service dozens or even hundreds of users at the same time
...
Peers are equally privileged, equipotent participants in the
application
...


Peers make a portion of their resources, such as processing power, disk storage or network bandwidth,
directly available to other network participants, without the need for central coordination by servers or
stable hosts
...

Essentially, every computer on a peer-to-peer network can function as both a server and a client; any
computer on a peer-to-peer network is considered a server if it shares a printer, a folder, a drive, or some
other resource with the rest of the network
...

Comparing Client/Server and Peer-to-Peer Networking

Item

Client/Server

Peer-to-Peer

Access

Via user/group lists of
permissions Via user/group lists

Resources are managed by each system with shared
resources
...


becontrolled by separate passwords for each shared
resource or by a user list stored on each system with
shared resources
...


Security

Varies; if password protection is employed, anyone
who knows the password can access a shared
High; access is controlled by user resource
...

access the workgroup can access shared resources
...


Performance

High; the server is dedicated and
Low; servers often act as workstations
...


Hardware
Cost

High; specialized highperformance server hardware
with redundancy features
...

part of the cost of the server OS
...
Backup by device
and media only required at
server
...


Decentralized; managed by users
...


Yes; duplicate power supplies,
hot-swappable drive arrays, and
No true redundancy among peer “servers” or clients;
even redundant servers are
Redundancy
failures require manual intervention to correct, with
common; network OS normally is
a high possibility of data loss
...


NETWORK TOPOLOGIES

In computer networking, topology refers to the layout of connected devices
...
Think of a topology as a network's virtual
Mesh topology
30

Nodes are connected to each other to form a complete network
...


NodeA

NodeD

NodeB

NodeC

Bus Topology – This topology consists of a Backbone cable connecting all nodes on a network without
intervening connectivity devices
...
On a Bus Topology network,
devices share the responsibility for getting data from one point to another
...
In a ring network, all the communication messages are transmitted
clockwise in one direction, around the ring
...
Each
workstation just acts as a repeater for the transmission, in other words, all workstations
participate in delivery makes the ring topology an active topology
...
Twisted-pair or fiber-optic cabling is
commonly used as the physical medium
...
Each node is separately connected to a central connectivity device, they
are more fault-tolerant
...
A
failure in the central connectivity device can take down a local area networking segment
...


Tree Topology
Tree topologies integrate multiple star topologies together onto a bus
...

A tree topology integrates the star and bus topologies in a hybrid approach to improve network
scalability
...

ii
...

iv
...







File sharing
Sharing of printers and faxes
Data protection
Remote access rights
Communication and collaborations

 Share resources such as printer
...

Communicate via e-mail
...

Allow all staff access to the Internet
...


MULTI-MEDIA TECHNOLOGIES

Multi-media is a field concerned with the computer-controlled integration of text, graphics, drawings,
still and moving images (video), animation, audio, and any other media where every type of information
can be represented, stored, transmitted and processed digitally
...
g
...


Entertainment
33

The entertainment industry has used this technology the most to create real life like games
...
The special technologies such as virtual reality have made this game just like experiences
of real life
...

ii
...
The
business communications such as employee related communications, product promotions,
customer information and reports for investors can be presented in multimedia form
...


Knowledge Transfer
This kind of application involve transmission of a piece of information with the
maximum impact, that is, the transfer of information in such a fashion that it
facilitates the retention
...
It gives lot of flexibility in providing training
...


Public Access
Multi-media systems are applicable in tourism where a person who wants to go for a sight
seeing trip may have the glimpse of places he has selected for visiting
...


CHAPTER ELEVEN: DATA INFORMATION MANAGEMENT
DATA INFORMATION MANAGEMENT
Data management is the development, execution, and supervision of plans, policies, programs, and
practices that control, protect, deliver, and enhance the value of data and information assets
...

1
...
Information such as population growth, trends in financial
investment and human resources changes would be of interest to top company officials who are
responsible for developing policies and determining long-range goals
...

2
...
It is of direct use to
middle management and department heads for implementation and control
...
This information is
of use in short – and intermediate -range planning – that is months rather than years
...

3
...
Examples are daily employee absent sheets, overdue purchase orders and
current stocks available
...

Characteristics of Information:
1
...
For
effective decision-making, information must reach the decision-maker at the right time, i
...
recipients
must get information when they need it
...
The characteristic of
timeliness, to be effective, should also include up-to-date, i
...
current information
...
Accuracy: Information should be accurate
...

Wrong information given to management would result in wrong decisions
...
Relevance: Information is said to be relevant if it answers especially for the recipient what, why,
where, when, who and why? In other words, the MIS should serve reports to managers which are useful
and the information helps them to make decisions
...
Adequacy: Means information must be sufficient in quantity, i
...
MIS must provide reports containing
information which is required in the deciding processes of decision-making
...

5
...
Incomplete information may result in wrong decisions and thus may prove costly to the
organization
...
Explicitness: A report is said to be of good quality if it does not require further analysis by the
recipients for decision making
...

ii
...


iv
...


vi
...


Financial losses: poor data management may lead to a finical loss especially loosing costumer
files, financial details, this may result to the organization closing down
Litigation risk: Hackers may access your customer database, which includes addresses and
credit card numbers
...

Excess data storage costs: organizations which have no process for data cleansing – replacing
or deleting inaccurate, incomplete, or outdated information keeps on adding more storage
space and IT resource which is expensive
...

Missed opportunities: Your sales reps struggle to access the inventory database, which
informs them of product availability and delivery dates
...

Brand/reputation loss: Customers are frustrated, because departments can't communicate
effectively with one another
...

Negative press/publicity: One of your team members loses their laptop, which contains
information about a well-known client
...

35

steps of improving information management in an organization
i
...

iii
...


Create Business Cases for Systems Improvements
Streamline Processes and Systems
Review Security
Identify Frustrations

36

CHAPTER TWELVE: E-COMMERCE
E-COMMERCE
What is E-Commerce? Sharing business information, maintaining business relationships and conducting
business transactions using computers connected to a telecommunication network is called E-Commerce
BSINESS TO BUSINESS E-COMMERCE
Purchase order entered by business1 in its PC and electronically dispatched
to vendor (by e-mail)
• Vendor acknowledges electronically the order
• Vendor dispatches goods (physically) and delivery note electronically to
business1
•Business 1 can compare delivery note against order -both are in computer
readable form
•Discrepancy note(if any) can be immediately sent to the vendor(business 2)
•Business 1 can carry out all local transactions using its LAN
•Local transactions are inventory update by stores - advice to accounts to
pay for goods taken into stock
• Accounts can make payment electronically to Vendor
Implementing B2B E-commerce-requirements
1
...

Standard known as EDI (Electronic DataInterchange Standard) is used to
send documents electronically
...
Each Business must have corporate intranet and the two nets are connected
by PSTN or leased line
...
Transactions must be secure -particularly if PSTN is used
...
Secure electronic payment methods are required
...
Customer uses a browser and locates vendor or he has vendor's web
page address
2
...
Customer selects item and places order
...
Vendor checks with credit card company customer’s credit
5
...
Vendor acknowledges Customers order and gives details of delivery
date, mode of transport, cost etc
7
...
Customer's credit card company debits his account, credits vendor's
account and sends bill to customer for payment
...
Buying/selling a variety of goods and services from one's home or
business
2
...
Can look for lowest cost for specific goods or service
4
...
Order processing cost reduced
6
...
Supply chain management is simpler, faster, and cheaper using ecommerce
- Can order from several vendors and monitor supplies
...

Disadvantages Of E-commerce
1
...
Security of internet is not very good - viruses, hacker attacks can paralyze
e-commerce
3
...
E-commerce de-personalizes shopping

---