ISM 50 - Business Information SystemsLecture 9Instructor: John MusacchioUC Santa CruzOctober 21, 2010Class announcementsAssignment 3 due ThursdayReading for next classMesserschmitt Ch 5, Sun Case Suggestion: Read Messerschmitt Ch5 first.MIDTERM NEXT WEEK!!!10/28Student PresentationsE-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 DiscriminationInter-Consumer (E-commerce)Prime ExampleE-BayOther examples?What value does something like E-bay add over a simple classifieds listing like craigslist?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 called Supply Chain Management (SCM)SCMMemoryManufacturerHard DriveManufacturerCase ManufacturerPower SupplyManufacturerCPU ManufacturerMotherboard 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 FurnitureAlibrisWhy did Interloc succeed so early on?AlibrisIf Interloc is so successful, why change it?What will change as Interloc becomes Alibris?AlibrisWhy did Manley feel they needed the Sparks facility?How does the Sparks facility keep them from becoming disintermediated?AlibrisShould Alibris actually buy books and fill up the Sparks facility?AlibrisWhat problems is Alibris having with its e-commerce capabilities?Why is Alibris having so much trouble setting up simple e-commerce capabilities?Is this really that hard??Is it rare for a new-software product from an established, reputable vendor not to work properly?AlibrisShould Alibris stick with Oracle? Or switch back to Thunderstone?AlibrisShould Manley take the white knights offer and fire the whole IT staff??!AlibrisRejects white knight offerManley secures another bridge loanGoes Live 1998Thunderstones software works ok1 million books at Sparks warehouse by 2000Originally all on consignment from dealersLater, purchases books2002  Revenue $31 million, loss $7.2 million2003  Revenue $45.5 million, loss $4.8 millionMarch 2004 files for auction based IPOMay 2004, withdraws IPO after price too lowStill Relying on Private FinancingData and informationbyDavid G. MesserschmittCopyright notice©Copyright David G. Messerschmitt, 2000. This material may be used, copied, and distributed freely for educational purposes as long as this copyright notice remains attached. It cannot be used for any commercial purpose without the written permission of the author.Key conceptThe key commodity manipulated by information technology is informationTo be manipulated in a computing/networking environment, information must be represented by dataWhat is information?InformationFrom a user (human) perspective.recognizable patterns that influence you in some way (perspective, understanding, behavior)In the computing infrastructure, information has a somewhat different connotation as structure and interpretation added to dataDataA bit is 0 or 1  the atom of the information economyData is a collection of bits, like01011101110101100000011111011101011010110101111011011010Note: the terms data and information are not always used consistently!RepresentationTake the place of the originalEquivalent to, in the sense that the original can be reconstructed from its representationOften the original can only be approximately reconstructed, although it may be indistinguishable to the usere.g. audio or videoASCII Alphabet Hex Binary<7> /x37 00110111<8> /x38 00111000<9> /x39 00111001<:> /x3A 00111010<;> /x3B 00111011<<> /x3C 00111100<=> /x3D 00111101</>> /x3E 00111110<?> /x3F 00111111<At> /x40 01000000<A> /x41 01000001<B> /x42 01000010<C> /x43 01000011<D> /x44 01000100Note that this representation isnot unique.this one happens to be a standard (ANSI X3.110-1983)StructureInterpretationA pictureThis picture conveysinformationThis information is represented in this computer, but how?Representation of picture: imageExpanding a small portion of thepicture, we see that it is representedby square pixels..300 tall by 200 wide...with a range of 256 intensities per pixel300  200  8 bits = 480,000 bits (but it can be compressed)Anapproximation!StructureInterpretationColor pictureA color picture can berepresented by threemonochrome imagesAt the expense of threetimes as many bitsTerminologyInformationDataInformationDataCommunicate data toanother user or organizationRepresentationDataprocessingSlide adapted from slides for Understanding Networked ApplicationsBy David G Messerschmitt. Copyright 2000. See copyright