unit 31 criteria 1-1
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Unit 31: E-business Operations
Session 3
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Learning Outcomes
1.1 Describe the extendedpurchasing process used
in e-business
1.2 Examine how use ofprofessional buyersaffects the buying process
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Topics
Review of Last session
Group Report
Lecture
The purchase processof b2c (business toconsumer) purchasing transactions
The purchase processof b2b (business to
business) buying transactions
Activities of professional buyers
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Review of Last Session
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Test of Baseline Knowledge -Review
What is E-business?
Types of E-Business Models
What are Purchase Processes?
Name some activities under thepurchase process
Name some activities of a Buyer
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Group 1
the term used to describe the informationsystems and applications that support anddrive business processes, most often usingweb technologies.
E-business allows companies to link theirinternal and external processes moreefficiently and effectively and work moreclosely with suppliers and partners to bettersatisfy the needs and expectations of theircustomers, leading to improvements inoverall business performance.
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Group 2 & 3
is the conduct of business on theInternet, not only buying and sellingbut also servicing customers andcollaborating with business partners
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Group 4
E-business is about utilizing theInternet technologies to providesuperior customer service, streamline
business processes, increase sales,and reduce costs. E-business usestools such as email, online banking
solutions, websites, supply chainmanagement software and web-basedcustomer relationship management.
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E-business
is the conduct of business usingelectronic means whether itsinternet, mobile, intranet, LAN,WAN or other electronic devices,not only buying and selling butalso servicing customers and
collaborating with businesspartners.
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Types of E-Business Group 1,2
Brokerage Model
Advertising Model
Merchant Model
Community Model
Subscription Model
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Types of E-Business Group 3
Storefront Model
Shopping-cartTechnology
Online Shopping Mall
Auction Model
Portal Model
Dynamic Pricing Models
B2B Exchanges B2b Services Providers
Online Trading andLending Models
Getting a Loan Online
Recruiting on the Web
Online News Services
Online Travel Services
Online Entertainment
Online Automotive Sites Energy Online
Selling Brainpower
Online Art Dealers
E-Learning Click and Mortar
Businesses
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Types of E-Business Group 4
E-shops
E-malls
E-auctions
Virtual Communities
Value-chain integrators
Information Brokerage
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Types of E-Business
B2C
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Types of E-Business
B2B
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Types of E-Business
P2P
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Types of E-Business
C2C
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Types of E-Business
Mobile Commerce
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Other types of E-Business
Business to Employee (B2E),
Government to Business (G2B) and
Government to Citizen (G2C)
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Purchase Transactions
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The purchase processof b2c
buying transactions
Needs and Wants
Information search,
comparisons and evaluation of alternatives,
purchase decision and purchase sequences
credit card information,
post-purchase communications
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B2C Information Search
Initial use of search engines to look forthe needs or wants Food
Luxury Items Etc
Think of a 5 commodities you want
now Search the internet for that commodity
with specifics
Submit links via email
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B2C comparisons andevaluation of alternatives,
Compare alternatives using acomparison software in the internet
Search a comparative software inthe internet
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B2C purchase decision andpurchase sequences
Price
Quality
After Sales Service Industry mark
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B2C purchase decision andpurchase sequences
Order Information
Customer Information
Billing address Click what credit card to use
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B2C credit card information,
Name
Credit Card Number
Amount Security Code questions
Security Token
Hard Virtual
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Credit Card Steps
S.E.T.
stands for Secure ElectronicTransactions and is a proposedstandard for performing credit cardtransactions over the Internet.
Used by VISA and Mastercard
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Credit Card Steps
The buyer indicates that they are interested inmaking a credit a card purchase.
The merchant's system generates and sends thebuyer an invoice for the purchase.
The buyer selects a VISA or MasterCard credit cardfor payment
The buyer's software initiates the payment processby sending a request to the merchant's software forboth their encryption public key and the public key ofthe payment gateway
The request indicates the type of credit card thebuyer will use, as a merchant may use differentpayment gateways for different types of cards.
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Credit Card Steps
The merchant's software generates a responseto the request and replies back to the buyer'ssoftware.
The buyer's software then verifies the merchant'sand payment's gateways
The buyer's software generates two packets ofinformation to send back to the merchant, theOrder Information packet (OI), and the Purchase
Instructions (PI) packet
The buyer's software transmits the OI and PI tothe merchant.
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Credit Card Steps
The merchant's software checks the messagefrom the buyer with the OI and PI for anytampering
The merchant's software generates anauthorization request for the credit card paymentrequest.
The merchant sends to the payment gateway oftheir acquiring bank a message encrypted using
the payment gateway's public key. :
The payment gateway then decrypts themessage and its various
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Credit Card Steps
The payment gateway then sends a request forpayment authorization to the buyer's credit cardissuer through customary bankcard channels
The issuing bank sends back an approval ordenial response and code to the paymentgateway in response to the authorizationrequest.
The payment gateway generates an
authorization response message to be sent backto the merchant.
The payment gateway encrypts and sends theauthorization response message back to the
merchant's software.
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Credit Card Steps
The merchant's software decrypts the authorization notice fromthe payment gateway
If the transaction is approved, the merchant's software thencreates a purchase response message which is sent to the
buyer's software. The buyer's software processes the purchase response
message and informs the buyer that payment was accepted.
At a later time, the merchant's software generates a capturerequest message to send to the payment gateway. This request
includes the capture token (optional), transaction ID, andauthorization information. The sequence of events surroundingthe capture are very similar to steps 13 - 15 of the authorizationprocess.
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B2C post-purchasecommunications
Customer Support
Sales returns
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B2C Purchase Diagram
informa
tion
search,
comparisons and
evaluation of
alternatives,
purchase
decisionand
purchase
sequences
credit card
information,
post-purchase
communications
Existence of
Need / Want
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The purchase processof b2bbuying transactions
Problem/ Need Recognition requisition from person who needs the items,
review quotations from alternative suppliers,
negotiate contract,
place purchase order,
allow leadtime for supply (often longer for non-standard items), delivery,
goods receiving,
check quality,
receive invoice,
buyer approves payment, payment authorised by accounts,
often by credit transfer through banking system
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B2B Problem Recognition
Needs Assessment Capital Expenditure
Operational Expense Marketing Incentives
Other needs
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B2B Requisition
Items Required
Specifications
Number of Items needed
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B2B supplier search
Via current suppliers
Via referrals
Via yellow pages Via internet
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B2B review of quotations
Company being chosen
Amount
Specifications given After sales support
Warranty
Payment Terms available
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B2B negotiate contract
Contracting Parties
Product
Qty
Unit Price
Amount Total
Payment Terms
Date Due
Details
Amount Due Inspection Terms
Delivery Terms
Other Terms
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B2B place purchase order
Placement of order
Detail of product/ Services
Placement of terms and conditionsplaced on the contract
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B2B delivery
Physical Delivery
Online Delivery
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B2B goods receiving
Warehouse
Office
Computer Other Protocol
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B2B quality check
Compare products withspecifications
Detailed quality check as prescribedby system
Quality Check system varies percompany
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B2B Invoicing
Accept invoice from Suppliers
Check Invoice based on paymentterms
Revision of Invoice (if needed)
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B2B buyer approves payment
Authorization of buyer to pay
Agreement of contract
Sign with digital Signature
B2B payment authorized by
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B2B payment authorized byaccounts
Single signatory
Dual Signatory
Documentations by other officeunits
B2B payment made via
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B2B payment made viaElectronic Fund Transfer (EFT)
Electronic Fund Transfer
Bank Account to bank account
E-check
Electronic Wallet
Credit/ Cash Card
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B2B Purchase Diagram
problemrecognition
requisition
supplier
search
review ofquotations,
negotiate
contract,
place purchase
order,
delivery,
goods receiving,
quality check,
receive invoice,buyer approves
payment,
payment
authorised by
accounts
payment made via
Electronic Fund
Transfer (EFT)
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Activity
Experience the whole cycle of boththe b2c and b2b transactions viaresearch of related materials
Submit via Email Links of yourresearch
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Professional Buyer
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Activities of professional buyers
Contracts
High proportion of business costs,
Negotiation of contract includes Products and services,
Quantities,
Delivery dates,
Prices and payment terms
B
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Buyer
Plans and directs procurement activities of theorganization.
Creates, assesses and consents to improvedadministrative, clerical and purchasing procedures;and ensures that the economy and efficiency ofoperation is maintained in the organization.
Responsible for approving bid proposals together withspecifications.
Recommends for purchases that need approval;
Liaises with purchasing officers, contractors, vendorsas well as city department officials; and
Carries out research on commodity areas
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Contracts
Request for Quotes
Terms and Conditions acceptable toboth parties
Preparation of Contract
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High proportion of business costs
Virtue of procurement
Capital Expenditure
Operational Expense Special Procurement
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Negotiation of contract
Products and services,
Quantities,
Delivery dates, Prices and payment terms
top related