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UCSC ISM 50 - Lecture Slides

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ISM 50 - Business Information SystemsLecture 8Instructors: Mary Doyle, Geoff RyderUC Santa CruzApril 22, 2009Class announcementsAssignment 3 due Monday 4/27 (on web site)Project Proposal due TodayReading for next classMesserschmitt Ch 4  Student Presentations Monday 4/27(News) Thomas RowleyOne more slot availableToday is your last chance to sign up for presentation vs. news folios (see signup sheet)Today News presentation Final review of Cisco ECommerce Alibris presentation Alibris CaseCisco Review Team of people from all types of departments“cross-functional team” Was this necessary?Cisco Review Vendor SelectionKPMG consultantsOracle ERPGood selection? Why were they “hungry?”Cisco Review Top Management made it a priorityWhat effect did this have?Cisco Review Rapid Iterative Prototyping?What was this?Was it a good strategy?Was aggressive pace good, or reckless?Cisco review Project justificationDid they do a RoR or NPV analysis to justify the project?Cisco SummarySuccess FactorsCross-Functional Team of top people People from across the company involvedHungry Vendors Oracle and KPMG needed this to succeedStrong Support from Top ManagementFavorable Hardware ContractRapid PrototypingAggressive paceGood management or luck?Challenges Poor testing Strategy Inadequate Hardware Software required more modifications than originally hoped.Cisco SummaryChallenges Poor testing Strategy Inadequate Hardware Software required more modifications than originally hoped.Cisco SummaryWhat did it cost?Costs Beyond original budget:Non-IT Personnel In Project 80 personnel X 8 months X 160 hours / month X 100 hour = $10 millionIT-Personnel beyond original 20 80 personnel X 4.5 months X 160 hours / month X 100 hour =$5.7 millionActually cost more than $15 million more than theoriginal budget of $15 million!Was this really a success?!E-Commerce Major CategoriesConsumer (B2C)Example: Amazon.com sells books to consumers.Inter-consumer (C2C)Example: e-bayInter-enterprise (B2B)Example: online brokerage to bankingE-Commerce Principal StepsMatching buyers and sellersNegotiating termsConsummationCustomer serviceMatching Buyers and Sellers CatalogSeller publishes a catalog of goods and servicesWilling buyers access at their initiative AdvertisingAttach advertisements to other publications or web pagesExample: Spam Intermediary RecommenderExamples?Intermediaries? What rolls should intermediaries play in the networked age? What intermediary rolls may change or even be eliminated?Travel Agents?Others?Negotiating Terms Fixed price Price based on buyer characteristicsHistoryDemographicsBehaviorSequential versioningExamples?(Airlines, Hotwire, TurboTax) AuctionsConsummation Order FulfillmentSeller conveys goods to buyer PaymentBuyer conveys payment to seller Security?Need to ensure both fulfillment and Payment occur.Payment options(Topic of Chapter 14)Account transfer authorizationCredit/debit cardDigital cashMicropaymentsLow transaction costsConsolidationExamples (toll roads, dining hall charges)Customer Support Often need to provide post-sales service to the customerIn personOver telephoneVia NetworkEmailRemote conferencingFAQ boardAutomatic distribution of new versions or patchesCustomer Relationship ManagementThe challenge of maintaining the relationship with a customer is called Customer Relationship Management(CRM)CRM software applications seek to provide customer facing employees a complete view of each customer.What they’ve bought and returned.What problems they’ve reported.What other agents they’ve talked to in the past.An opportunity to add value.E-Commerce Major CategoriesConsumer (B2C)Inter-consumer (C2C)Inter-enterprise (B2B)Consumer e-commerce (B2C) What have you bought on the Internet, or what do you buy most often? What are the advantages and disadvantages compared to a retail store or direct mail catalog?Some Advantages For the ConsumerCheck prices at many vendors with minimal effortPrice many optionsAnonymityOrder tracking For the BusinessGlobal reachAutomate order taking (cost savings)Price DiscriminationSome cautions Security of transactions (https://) Shipping/handling/return costs and policies Stability of sellerInter-Consumer (E-commerce)Prime Example E-BayOther examples?What value does something like E-bay add over a simple classifieds listing like craigslist?And - how does craigslist make money?Inter-Enterprise E-Commerce (B2B)Procurement One enterprise purchases goods or services from anotherDirect Procurement Ongoing, consistent, and scheduled procurementThe relationship between firms involved in direct procurement often called a Supply ChainThe set of problems associated with managing a supply chain is calledSupply Chain Management(SCM)Source:MIT Engineering Systems DeptSCMNeed to manage the procurement of parts  Don’t run out of any one Don’t order too many Order far enough in advanceIdeally Know in advance# carsfeaturesTireManufacturerSteelMfg.CoalMineIron OreMineWindow Mfg…Car PlantSCMMemoryManufacturerHard DriveManufacturerCase ManufacturerPowerSupplyManufacturerCPUManufacturerMotherboard ManufacturerFinal AssemblyManufacturerThousands of orders per day, each with different requirements!Adjusting orders from suppliers constantly according to demandMinimal inventories Cut costsMuch more sensitive to errors or disruptionsmass customization requires sophisticated SCMNetworked Computing in direct Procurement History predates InternetElectronic Data Interchange(EDI) Exchange order information between firms involved in direct procurementUsually large firms who could who afford proprietary communication linksInitially order and invoiceExisted since 70’sFinancial EDI(FEDI) later added EFT payment capabilityNetworked Computing in direct Procurement XML (Extensible Markup Language) is another data interchange format making an impact on inter-enterprise commerce We will talk more about this later in the quarter.Indirect Procurement Sporadic purchase of goods and services to support organizational objectivesExample: Office FurnitureStudent


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