CHAPTER 4

BUSINESS INTEGRATION AND E-BUSINESS

Learning Objectives:
• Definition and functioning of Electronic Data Interchange (EDI) — benefits, limitations
and its security aspects.
• Enterprise Resource Planning (ERP) — Evolution, definition, characteristics and the
enterprise model.
• Objectives, functioning of Data Warehousing (DW) and role of Data Mining.
• Understanding Corporate Information Management System (CIMS).
• Evolution of the concept of e-business; E-commerce — procedure, elements, models,
security aspects and benefits.
• Inter-relation between e-commerce and Internet — development and management of
Web-sites and functioning of related technologies.
• Mobile-Commerce or M-Commerce, a technology boon for modern life.
• Application of electronic technology (Internet, etc.) in other fields of human activities
such as: e-governance, electronic banking, GIS, etc.
• Why and how the World is getting transformed into a ‘Global village’ concept.

14.0 Electronic Data Interchange

14.1 Introduction to EDI
According to ANSI, Electronic Data Interchange (EDI) is the transmission, in a standard syntax, of unambiguous
information of business or strategic significance between computers of independent organisations. The users of
EDI do not have to change their internal databases. However, users must translate this information to or from their
own computer system formats, but this translate software has to be prepared only once.
In simple terms, EDI is computer-to-computer communication using a standard data format to exchange business
information electronically between independent organisations.
The key points of EDI can be summarised as under:
4.2 MANAGEMENT INFORMATION SYSTEMS IN MODERN BUSINESS
• EDI is a process of exchanging data, information and documents related to a business transaction from one
computer to another
• The exchange process can be done by adoption of structured means or templates, with minimal human
intervention and the data so obtained can be processed for effective decision making
• By integrating computers and data communications into the business process, companies can reap the
benefits of exchanging information electronically. This leads to reduced paperwork, minimized cost and
improved response time.
• This process of computer-to-computer exchange of standardised business information is called EDI.
In the traditional paper-based flow of information, manual data entry is performed at each step in the process. In
addition, manual reconciliation – comparison of purchase order, receiving notice and invoice – is also required,
thereby contributing to the higher cost of transaction processing and the continued involvement of the end user in
the overall process. These two manual processes are eliminated with the substitution of electronic methods such as
EDI. In this manner, EDI addresses the following paper-based information systems —
o Labour costs. In a paper based system, manual processing is required for data keying, document storage
and retrieval, document matching, envelope stuffing, etc.
o Errors. Since the same information is keyed in a number of times, paper-based systems are error-prone.
o Inventory. Due to the fact that delays and uncertainties are common place in paper processing, inventories
may be higher than they need to be.
o Uncertainty exists in three areas :
 Transportation and keying delays mean that timing is uncertain
 Sender does not know whether the matter was dispatched was receive at all
 Payment area, it is difficult to tell when the bank will disburse the cheque

14.2 Components of EDI

1. Necessary hardware and communication devices that link the computers
2. EDI standards
3. EDI software that enables to smoothly conduct the process of EDI
4. Communication service providers

14.3 Functioning of EDI

Your
E D I T r a n s la to r T ra ding
A p p lic a tio n
P a r tn e r

Fig. 14.1 — Diagram representing the functioning of EDI.

Each company adds EDI programs to its computer to translate company data into standard formats for transmission,
and for the reverse translation on the data it received. Then, the two companies exchange data electronically in the
standard formats. Prior to any computerisation, representatives of two companies interested in exchanging data
electronically, meet to specify the applications in the EDI standard which they will implement.
To make EDI work, one needs communications software, translation software and access to standards.
Communications software moves data from one point to another, flags the start and end of an EDI transmission and
determines how acknowledgements are transmitted and reconciled. Translation software helps the user to build a
map and shows how the data fields from that application corresponds to the elements of an EDI standard. Later, it
uses this map to convert data back and forth between the application format and the EDI format.
Chapter 4 BUSINESS INTEGRATION AND E-BUSINESS 4.3
Regardless of the format chosen, companies using EDI communicate with their trading partners in one of two
styles:
• exchange data with several trading partners directly (below)

S u p p lier
O n e -to -M a n y
M a n u f a ctu rer S u p p lier

S u p p lier

Fig. 14.2 — Many Suppliers supplying One-manufacturer.

• interact with multiple companies through a central third party vendor

M a n y -to -M a n y
M a n u f a c tu r er S u p p lier
T h ird
M a n u f a c tu r er P a rty S u p p lier
V en do r
M a n u f a c tu r er S u p p lier

Fig. 14.3 — Interactions between many Manufacturers and many Suppliers.

14.4 Benefits of EDI

• When implemented, EDI would ensure faster response to queries and demands of customers
• Quick response to customer queries helps improving and strengthening customer relationships
• Payment system becomes smoother and faster
• Minimize capital tied up in inventory
• Make bulk updates of catalogues and parts listing
• EDI helps to reduce costs in respect of inventory-holding, telephone/fax/postal expenses, printing/paper
costs, labour cost, etc.

14.5 Limitations of EDI

• Cost vs. Benefits. With all its benefits, implementing an EDI system would costs more. This is a
disadvantage to small and medium sized businesses.
• For economic reasons, small businesses are not ready to invest in operational areas (which they consider is
not vital).
• Firms still bear a fear that by adopting EDI, their data might become accessible to all users.

14.6 Security in EDI

Security is the prime concern in EDI. The key issues involved with security are:
• Confidentiality. The information contained in the EDI messages must be guarded and protected from
unauthorized users
• Integrity. The messages that are sent through EDI must appear the same at the destination.
• Authenticity. Provisions must be made to prevent any person from misrepresenting as an authentic user.
4.4 MANAGEMENT INFORMATION SYSTEMS IN MODERN BUSINESS

15.0 Enterprise Resource Planning (ERP)

15.1 Genesis of ERP
We already know that Information Systems are designed and build to cater the information requirements of
organisations. Considering a particular business, there are several types of Information Systems, each concerned to
achieve its own objective.
Business organisations, as a whole, have a pre-determined set of objectives to achieve. This objective changes with
time and need. For example, at one point of time, the objective of business may be profit making and generating
wealth. Conversely, at hard times (i.e., times of trade depression), the aim may be just to remain in business. While,
at times of trade growth, the firm’s concentration will be on market-capturing; reducing profit to increase growth,
etc. Thus, overall objective setting (i.e. strategy formulation) is a very dynamic sphere. To accomplish the strategy
the entire organisation has been disintegrated or split-up into several departments, where each department has its
own set of resources, plans, etc. to achieve the assigned objectives.
For example, let us assume that the strategy of a business is to maximize profit by expanding markets and also by
cutting internal expenditures and production costs. The finance department takes serious measures to effectively cut
down internal expenditure and cost of production to a great extent. One of such decision of financial department is
to reduce the funds allotted to marketing department. On the other hand, the marketing department, which has been
given the responsibility to expand market, needs more than double the funds allotted last year, for adopting
aggressive marketing techniques. Similarly, the production department may need to update (or, install new)
machines for more production, in order to cope up with the forecasted increase in sales, due to expanded markets,
etc. Quite the opposite, the Finance Department has intended to reduce Working Capital, which affects Stock
Turnover Ratio; and do not have any idea for further investments in machine, etc. Thus we are in view of that, all
the departments (viz. Finance, Marketing, Production, etc.) are honestly heading towards achieving assigned
responsibilities, such that the overall strategy of the firm can be met with certainty. However, scarce and competing
resources have lead to disagreement or mismatch of inter-departmental objectives, which initiated clash of intention
that otherwise, would not have existed, and in this manner conflict has come to surface. Now, conflict always
reduces operational efficiency, thereby getting deviated from the achievable objective.
Organisations have strategies. It is very important for any organisation to be successful in strategy accomplishment.
It is also very important for all units and departments to work in harmony and integration, avoiding conflict and
collision of goals regarding accomplishment of strategy. The success of an organisation rests on resolving the
conflicts between the various business goals. In support of this, information sharing for integrated thinking is
important. Everybody in the organisation should know what is happening in other parts of the organisation. Each
department should manage efficiently, not only its own activities, but it should also help other departments in
managing their functions efficiently. For achieving this, it is important that various departments should not work in
isolation; rather they should work in close harmony with other departments. Each and every employee in the
organisation should know what their counterparts engaged in.
IT plays a crucial role in an organisation, both at the organisational level, as well as at the departmental level. At the
organisational level, IT should assist the specifying objectives and strategies of the organisation, providing an aid in
developing and supporting systems and procedures to achieve them. At the departmental level, IT must ensure a
smooth flow of information across departments, and should guide organisations to adopt the most viable business
practices. At this level, IT ensures seamless flow of information across the different departments and develops and
maintains an enterprise-wide database. This database eliminates the need of separate database which existed in each
department and makes the organisation’s data accessible across the departmental boundaries. This enterprise-wide
data sharing has several benefits such as automation of procedures, availability of high quality information for
better decision making, faster response times, etc.
Accordingly, IT must ensure a smooth flow of information across departments, and should guide organisations to
adopt the most viable business practices. At this level, IT ensures seamless flow of information across the different
departments and develops and maintains an enterprise-wide database. This database eliminates the need of separate
database which existed in each department and makes the organisation’s data accessible across the departmental
boundaries. This enterprise-wide data sharing has several benefits such as automation of procedures, availability of
high quality information for better decision making, faster response times, etc.
Chapter 4 BUSINESS INTEGRATION AND E-BUSINESS 4.5

15.2 Definition of ERP

ERP covers the techniques and concepts employed for integrated management of business as a whole, from the
viewpoint of the effective use of management resources, to improve the efficiency of an enterprise.
ERP systems are computer-based systems designed to process an organisation’s transactions and facilitate
integrated and real-time planning, production and customer response.
The proactive adaptability of an enterprise around redefined business objectives is called Enterprise wide
Integration (EWI).

15.3 Evolution of ERP

When companies were small and all the different managerial functions were managed by a single person, the single
person used to take all the decisions on the basis of overall company objectives. Gradually, with growth and
expansion, departmentalisation and work-division, business functions got discriminated. As departments became
large, they became closed and watertight. Each had their own set of procedures and hierarchy. People at most levels
within a department would just collect and pass information upward. Thus, information was shared between
departments only at the top level. IT developers ended up developing need-based, isolated and piecemeal
information systems which are not compatible. IT implementations automated only the existing applications and
not the business functions, because IT was not integrated into the corporate strategy. To draw real benefits from a
technology as powerful as IT, system had to be devised with a holistic view of the enterprise. Such a system has to
work around the core activities of the organisation, and should facilitate seamless flow of information across
departmental barriers. Such systems can optimally plan and manage all the resources of the organisation, and
hence, they can be called Enterprise Resource Planning Systems.
An enterprise is a group of people with a common goal, which has certain resources at its disposal to achieve that
goal. The group has some key functions to perform in order to achieve that goal. Resources included are money,
materials, manpower and other things required to run the enterprise. Enterprise Resource Planning is a method of
effective planning of the resources in an organisation.
An enterprise model is, therefore, built around the following four productive resources:
• People
• Technology
• Processes
• Products/Services

le P ro
op du
Pe c ts
gy P ro
o lo n ces
ech T s

Fig. 15.4 — The Enterprise Model

ERP provides support to the enterprise for achievement of its business plan and strategies by building up an
integrated system enabling planning and management of its resources.
ERP comprises a number of modules that permit flow of information seamlessly from one to another, avoiding
redundant work and ensuring accuracy of data and instant updating, to assist decision-making.
4.6 MANAGEMENT INFORMATION SYSTEMS IN MODERN BUSINESS

15.4 Characteristics of ERP

The main characteristics of ERP are:–
• Modular structure
• Integration of modules
• RDBMS independent
• Independence of hardware platform
• Interface capabilities
• PC download/upload facility

16.0 Data Warehousing

As defined by Bill Inmon, Data Warehouse is a collection of non-volatile data of different business subjects and
objects, which is time variant and integrated drawn from various sources and applications and stored in a manner
to make a quick analysis of business situation.
Hence, Data Warehouse is a special database containing large stocks of enterprise data and related Meta Data. In
other words, Meta data means ‘data about data’, processed to a ‘ready to use’ stage for decision makers for
operational and analytical business analysis. This data is consolidated to provide management reports and analysis
using specific reporting and query tools.
Data warehousing tools include:
• Query and reporting tools
• Intelligent agents
• Multidimensional analysis tools

16.1 Objectives of Data Warehousing

The objectives of DW are as follows:
• Continuously refresh, assimilate, accumulate and integrate data from various (geographically
dispersed/conceptually diverse) sources, to provide users (consisting of knowledge workers, managers and
operation staffs) appropriate information in a user friendly interface of consolidated reports, etc. prepared
with the help of warehousing tools (such as query-and-reporting tolls, intelligent agents, multidimensional
analysis tools).
• Provide mechanism to identify discrepancies across the system
• Provide a consistent and fixed format data structure
• Provide subject oriented view of data
• Support multidimensional analysis of the enterprise wide data

16.2 Benefits of Data Warehousing

A data warehouse can provide a much more comprehensive view of the data within an organisation, compared to
individual operational or transaction processing systems. Following are the benefits of data warehousing.
• An operational system typically has only a snapshot view of the business, whereas, a data warehouse may
be able to provide detailed historical information.
• Data warehousing may be used for extensive querying and reporting, without affecting, or being affected
by, the operational system; thereby providing the most cost effective means of data quality improvement
and flexibility of enterprise analysis
Chapter 4 BUSINESS INTEGRATION AND E-BUSINESS 4.7
• Helps in business re-engineering and enhancement in customers service

16.3 Data Warehouse and MIS

MIS, conventionally sources its data from internal sources operational and appreciation systems and helped to
produce MIS reports for operations and middle management. The MIS satisfied largely the information need of
running the business but it lacked completely the support for strategic management of business. The strategic
thinking was possible at the functional level and not at the level of enterprise.
The purpose of Data Warehousing (DW) is to convert operational data to a level where it can be used to manage the
business in terms of long-term requirement. DW is responsible to make decisions for growth, profitability,
diversification and expansion of the business which have a long term bearing on the business. These jobs claim
strategic thinking and evolving strategies to beat the competition, increase market share, identify new markets,
assess consumer behaviour and decide on customer satisfaction strategies. Therefore, top management needs
information of strategic nature. This requirement can best be met by implementing Data Warehouse in the
organisation.
The conventional MIS model is slow in processing and can give segment view through static MIS reports. It could
at the most be used for better running of business operations, but lacks quality and intelligence support for strategic
management of business. The Data Warehouse and associated tools have overcome these problems and offer a
knowledge platform for long term perspective planning and gives strength to top management to get a grip on
management of business.
Due to globalisation, business is now more vulnerable to competitors regarding risks of product or process
obsolescence due to rapid technology advances. The top management now needs more information driven business
applications, support of business intelligence, assistance of decision support systems using high quality data and on
line real time business data for decision making. It requires high end analytical tools for processing
multidimensional data to unearth business trends, patterns and new opportunities.
Data Warehouse designed with these requirements in time is an absolute necessity. The technology provides
tremendous support in achieving this requirement of top management of the business. Hence, Data Warehouse is a
mandatory requirement of the businesses of 21st century.

16.4 Meta Data

Various data sources could be options for taking the business data to Data Warehouse. Further, each source may
have application specific data definition and its use requiring special definition and reconciliation process. It is,
therefore, necessary to know the data model, data definition and data structure and data usage precisely in each
case. This data about the business data is called as Metadata. In other words, metadata is data about data.

16.5 Data Mining

Data Mining is a tool of Data Warehousing, which is used to make impact analysis of factors and relationship.
Data mining helps to unveil underlying patterns in the business and factors influencing these patterns. It basically
refers to a knowledge discovery based data analysis which enables the extraction of implicit and useful information
from the data base. It is also known as knowledge data discovery. Careful analysis of data might reveal the pattern
which could serve as more meaningful and useful.
Data mining tool solution provides capability to build prediction models by helping to discover association and
sequential patterns in the business data; as a result of which, the pattern of trend, or the trend itself can be
discovered. Such activities adds to knowledge of the decision maker so that the decision maker can get insight into
underlying business complexities and its behaviour and with this knowledge, decision maker knowledge gap is
reduced.
Data mining focuses on business and/or some aspects, of business where knowledge about the business is lacking.
During the course of analysis, viewing and querying, if some findings are unexplained, then data mining will help
to unearth why and how the particular scenario has emerged.
4.8 MANAGEMENT INFORMATION SYSTEMS IN MODERN BUSINESS

17.0 Corporate Information Management System (CIMS)

CIMS is a highly sophisticated ERP which incorporates various JAVA technologies for catering flexibility on
information sharing. CIMS is tied to the corporate strategy, such that the Corporate can attain its strategy.
CIMS is totally a pure JAVA application with n-tier architecture to provide maximum flexibility to the Information
Management System. This ERP system is targeted to be an application on the Web and for the Web, which enables
integration with M-Commerce applications to make this system more affordable and more close at hand.

18.0 Electronic Business (e-commerce)

This 20th Century witnessed the experience of convergence and emergence of number of technologies, affecting the
business styles and execution processes. The four prominent technologies are Networking, Communication,
Internet and Computing. These technologies put together helped seamless integration of systems, information
sharing and delivery anywhere in the World, irrespective of the platform and the distance.
The business suddenly moved from regional to global because of access and reach was cost-effectively affordable
by using Communication, Networking, Internet and Computing. This was the birth of e-business or commonly
known as e-commerce. E-business essentially means carrying out business using electronic methods for business
processes. Consequently, e-business has to be executed with greater speed and precision in an automated manner
where decision making is embedded in the process itself. The e-methods transform the business from human driven
to information driven where people play a role of knowledge workers. At that moment, business drivers shifted
from capital and labour to knowledge. Customers became more knowledgeable and hence through easy access of
even distant knowledge. Products and services became more customised. E-business can be operated from any
distant corner from the World, with the feeling of next room distance. For that reason, business enterprises became
more virtual than physical.
Commerce means exchange of goods and services in exchange of money. When commerce is done in electronic
form (i.e. using technologies such as communication, networking, internet and computing), it is known as e-
commerce. Several different players of commerce are as follows:
♦ Buyers are purchasers of goods/services, who purchases in terms of money. Consumers consume the
goods/services — i.e., they derive marginal utility from the purchased goods/services, in order to satisfy
their want. Buyers are those purchasers of goods/services, may be any purposes (e.g. resale, further
processing, etc.) other than consumption. A consumer has to be a buyer, because without purchasing one
cannot consume. Contrarily, a buyer may not be a consumer. Consumers are often referred to as end-users.
♦ Sellers offer goods/services to buyers. Retailers are sellers who sell goods/services to consumers or end-
users. A wholesaler, also known as distributors, sells goods/services to those who would sell to consumers.
♦ Producers are organisations/people concerned with creating of goods/services for offering to sale.
♦ A Market is the place where seller and buyers/consumers meet for executing buying/selling activities. E-
market refers to a market place created using computer and electronic communication technologies to link
buyers and sellers of particular products.

18.1 E-Commerce
E-commerce refers to conducting business electronically using some form of communication link.
E-commerce refers to the paperless exchange of business information using Electronic Data Interchange, electronic
mail, electronic bulletin board, electronic funds transfer and other network based technologies. It is not only
automated manual processes and paper transactions but also help organisations move to a fully electronic
environment and change the way they operate.
The key indicators, which exhibit poor business performance, calling for e-commerce initiatives, are the following.
o Longer processing cycles
o High inventory at all locations
Chapter 4 BUSINESS INTEGRATION AND E-BUSINESS 4.9
o Employees spending too much time in searching and accessing information
o Critical resources idle
o Rapid loss of market share
o Organisation top heavy
o Market share of loyal customers on the decline.
E-commerce uses different technologies to transfer conventional business methods to e-enabled methods. It begins
with intranet for in-company seamless integration of systems. It uses web enabled systems to deal with text based
information. Along with supply chain management systems (ERP), customer relations management systems (CRM)
are implemented. Intranet then is extended to trusted business partners with complete security measures to protect
information from exposure to unauthorized people. When you extend intranet to trusted business partners, it is
called extranet. Once the systems are stabilized on Intranet/Extranet, Internet connectivity is obtained for
messaging and transaction processing applications. The Internet is now accessible on wireless devices such as lap-
top, mobile phones, etc. Internet is used to develop web applications. Internet is a universal network and web is an
application running over it.

18.2 Elements of e-commerce

E-commerce is commerce in electronic form. Thus, all the elements of commerce are present, but in electronic form
only. The elements of e-commerce are
1. Product or Service. A sample of the product, or an example of the service; can be put on view
electronically. Functioning and operational features can also be demonstrated. Products can neither be
physically displayed nor physically demonstrated.
2. Market. Websites serves the Market-place for e-commercial activities.
3. Marketing. Marketing relates to activities concerned in pulling customers. Apart from other techniques,
advertising is the most important and effective marketing technique. In e-commerce, marketing is done by
putting advertisements in search engines or other web sites providing free activities such as free e-mail
spaces, etc.
4. Method of accepting orders. There are shopping carts or special areas where purchase orders are
electronically stored and processed on the final mouse click.
5. Cash transfer. Payments are made electronically, by using Electronic Fund Transfer or EFT, where
balances of accounts are transferred, instead of actual cash. This can be thought of as a sophisticated
version of cheque-payment method.
6. Delivery method. If possible, products/services are electronically transmitted (e.g. software purchased,
etc.). Otherwise, the products needs to be physically shipped or couriered to the destination for delivery
purpose.

18.3 Models of e-commerce

There are four models of e-commerce. Beside the point which model of e-commerce is being adopted, following
technologies are common.
o Use of web server as a platform and the web browser as a client. Interaction requires web server and not
direct interaction.
o Message formats are not tightly defined or highly standardised.
o Technology issues involved in linking a company’s web site and e-commerce server to its back-end
systems for functions such as generating the content of an online catalogue from a product database or
passing orders taken over the web to an order entry and fulfillment systems
o The need for authentication and encrypting because the transactions are carried out over non-secure
networks.
4.10 MANAGEMENT INFORMATION SYSTEMS IN MODERN BUSINESS

18.3.1 Business to Business (B2B)

In B2B model, the participants are two organisations with relations as buyer-seller, distributor-dealer and so on.
B2B are of two types: Information sharing and Information Processing.

18.3.2 Business to consumer (B2C)

B2C is e-commerce between Business organisation and the consumer. Here, messaging and information
downloading and using is a big application. Inter organisation communication applications, like news bulletin;
communicating change or rules, announcements, price revisions are very common in B2C. In case of bank,
announcing new interest rates, financial products opening of new branch, etc. is a communication application. In
B2C model, consumer is outside the business (i.e. C, being outside B, is associated with B for the reason that of
business activities).

18.3.3 Consumer to Business (C2B)

In C2B model, customer interacts with information databases such as product catalogues, price information,
configure the product, compare the cost, place the order and have it delivered after electronic payment process. the
products like computers, books, CDs, music systems and different services are purchased through e-commerce
applications. Bill payments are a big application of C2B model. E-mail, videoconferencing, etc. are other big
applications where information is shared through electronic communications.

18.3.4 Consumer to Consumer (C2C)

In C2C model, e-business revolves around two individuals who deal with each other in their individual capacities
and play a designated role as buyer/seller, teacher/student, etc. E-mailing, sending e-greetings, making online
payments, ordering and sending gifts, etc. are applications of C2C model.
Few examples —
Service/Product Organisation/Website E-commerce Model
Internet Banking ICICI (www.icici.com) B2C
Bill Payments ICICI or www.billjunction.com C2B and B2B
Information Sharing www.itspace.com B2B and B2C
Greeting/Messaging www.yahoo.com or www. e-greetings.com C2C

18.4 E-commerce process

E-commerce stands on three pillars: the storefront (which is nothing but a series of HTML, web pages displaying
the products); the payment mechanism (very crucial since it involves online payments, online money transfers,
etc.); and the supply (which is more a physical operation, except in case of electronically transferable items such as
softwares, etc.).
Products/services of an organisation and related information are displayed on the web sites hosted by that
organisation. The consumer or buyer comes to know of that web site, by seeing advertisement or by searching
through search engines, or being told by friend, etc. The buyer starts viewing the web site by entering the Universal
Resource Locator in the address-box of the Web Browser. The Browser, with the help of the ISP, displays the
required web page. The buyer picks and chooses items he is preparing to purchase by adding it to a ‘shopping cart’.
After this step, the consumer attempts for making purchasing, when with the click of a button, he opens that page of
the web-site, where he is required to key in his credit-card number and associated details. These details are then
send by the browser to the acquiring bank, which sends the information to the appropriate card association (or card
issuer, as the case may be) for authorisation and approval; such that payment transfer is possible. Once money is
transferred, payment mechanism is completed. Only supplies of the goods/services remain due. If these
goods/services are electronic items such as softwares, e-learning material, etc. then the transfer of goods is made by
electronic means. However, if the goods/services are to be physically delivered, then other mechanism of physically
delivering is required to be taken.
Chapter 4 BUSINESS INTEGRATION AND E-BUSINESS 4.11
The central and vital part of e-commerce is e-payments. Without transfer of money, business cannot operate. To
operate business payments have to be made and received. E-payment is very faster and cheaper in the sense that the
moment the mouse clicked, money is transferred — it is so easy that one do not have to physically post or submit
the cheque/draft and wait for its clearance.
At the time of making payment, the buyer keys in his credit card number and other relevant details, which the web
browser send to the bank for authorisation and payment. This part is subject to misuse. Sending of vital information
like credit card numbers and etc., through web browser is subject to tapping (i.e. unauthorized accessing), where
the intruder (one who taps), may get hold of the details and store it for later use in false transactions. They remain
dormant and become active on the event of money transfer. During transfer of vital and confidential information,
they silently tap the required information. As soon as the buyer-seller finishes payment-related tasks and goes
offline, they get themselves involved in false transaction with their organisation, on behalf of the card holder. These
intruders (sometimes called e-pickpocketer), represents himself on behalf of the actual card holder and makes
transactions, which the actual card holder comes to know when the monthly bill statement reaches him. During this
time delay, the e-pickpocketer has withdrawn cash amount and is out of the scene. Then, tracking these
persons/organisations has to be done physically by police, detectives, etc. It may be so that such people live in my
next flat and we together go to morning work, but we do not know the actual realities. Thus, he is safe and my
money is unsafe. Hence, methods of securing e-payments have been devised, which have reduced such thefts to a
large extent, will be discussed shortly.
EFT stands for Electronic Fund Transfer. EFT involves the electronic transmission of financing transactions (debit
and credit) between:
o bank and organisation
o bank and bank
o bank and customer
o customer and customer
The elements in e-payment mechanism are:
o Card Holder — individual entering e-payment using credit cards
o Merchant — the company that is selling goods/services to the cardholders (i.e. customers willing to enter
transactions by making online payments through credit cards).
o Issuing bank — Bank that issues credit card to the cardholder, thereby providing monthly bill statements to the
cardholder. HDFC Bank and ICICI Bank have launched payment gateways for online transactions. Payments
can be effected through credit cards or directly by debiting the accounts of the customers of the respective
banks. HDFC
o Acquiring Bank — the bank that enables the merchants to accept the credit card payment.
o Card association — an association, such as VISA International and MasterCard, etc. involved in issuing credit
card through its members (cardholders, banks). Therefore, those like American Express and Discover, etc.
issues credit cards directly to cardholders and hence does not fall under card association, but are referred to as
Card Issuer.
o Payment Application — required for credit card authorization and settlement of funds between the merchant
and the acquiring bank
To secure e-payments and EFT, cryptography is used.

18.5 Securing e-payments

In the words of Bruce Schneier, “It is insufficient to protect ourselves with laws; we need to protect ourselves with
mathematics”.
4.12 MANAGEMENT INFORMATION SYSTEMS IN MODERN BUSINESS

18.5.1 Cryptography
Data/information Security is the act of protecting of vital quality of information (such as secrecy, or safety, or even
wealth) from infringement, resulting in relief from fear and anxiety. It is the ability to engage and defeat attempts to
damage, weaken, or destroy a vital quality. Information security, is the form of assuring the secrecy of information
while in storage or transit, is the fundamental role of cryptography.
The word Cryptography is derived from the Latin words crypto (itself derived from the Greek word kryptos)
meaning “hidden” and graphy meaning “writing”. The term cryptanalysis refers to the systematic study of
techniques by which secret communications may be revealed. The term cryptology is used to refer to the entire area
of cryptography and cryptanalysis.
Cryptography is the art and science of transforming information into an intermediate form which secures that
information while in storage or in transit; thereby protecting it from unauthorised access/modification and hence
acting as a shield.
Cryptography seeks to render a message unintelligible even when the message is completely exposed. It is all about
communication in the presence of adversaries. Observe that cryptography is necessary for secure communications,
but it is not sufficient only by itself.
The general concept of protecting things is with a "lock," thus making those things available only if one has the
correct "key."

18.5.2 Encryption/decryption techniques

Encryption and decryption requires the use of some secret information, usually referred to as a (digital) key. A key
is a string of characters (i.e. sequence of bits) that is needed to encode/decode a message. A digital key should not
be confused with a method — as it is just a piece of information to derive a required piece of information (i.e.
plaintext).
In a cipher, the ability to select a particular transformation between a plaintext message and a corresponding cipher
text by using a particular (digital) key, enables us to create any one of many different cipher texts for the exact same
message. And if we know the correct key, we can transform the cipher text back into the original message. By
supporting a vast number of different key possibilities (i.e., a large key space), we hope to make it impossible for
deciphers to become successful.

18.5.3 Cryptographic Algorithms

Cryptographic Algorithms are of two types:–
1. Secret Algorithms. The algorithm used to encrypt/decrypt is kept secret. The main trick here is to strictly
restrict the availability of the software/hardware implementing this algorithm, and also barring others from
knowing the algorithm. But by chance, if a member of this group leaks out this secret algorithm, or leaves
the group, etc. then not only the whole system becomes unsecured, the algorithm has to be totally changed
thereby designing about new software/hardware to implement this new algorithm. Thus is consumes too
much resource (e.g. Time, Money, Labor, Knowledge, etc.). The use of Secret Algorithms has almost
become outdated.
2. Public Algorithms (protected by Digital Keys). In this method, the algorithm is not kept secret. In fact,
the algorithm may be published publicly and anybody may devise a software/etc. implementing this
algorithm. But then how can this system guarantee safety and security? This is done by the use of Digital
Keys. A Digital Key is a piece of information (i.e. a sequence of bits) and not a method. Public Algorithms
are designed such that these algorithms will produce an output for any value of the digital-key; but the
correct output will be produced, only when the correct key is supplied. Therefore, any person having the
knowledge of the correct key can only decrypt the cipher text to obtain the plaintext message.

18.5.4 Public Key Infrastructure

By definition, Public Key Infrastructure (PKI) is a system of Digital Certificates, Certificate Authorities, and
other registration authorities; that verify and authenticate the validity of each party involved in an Internet
transaction. While a reliable PKI is necessary before electronic commerce can become widespread, there is
Chapter 4 BUSINESS INTEGRATION AND E-BUSINESS 4.13
currently neither a single PKI nor even a single agreed-upon standard for setting up a PKI. Following four are the
PKI services
1. Key registration.
Key Registration is concerned with issuing a new certificate for a public key. Certifying
Authorities are authorities which certify key registration process, are known as CA in short. Every
CA should have a open security policy under what conditions she issues a new certificate to a user.
This policy should specify, in particular, the set of possible users (say, employers of a company),
and how should they authenticate themselves to the CA (say, by showing a passport).
After key registration, CA outputs the certificate CA of a user, that contains CAs signature over
the user identification data IDA (containing information that identifies this person uniquely: say,
his name and home address), public key PA, the certification validity period, and some other
necessary information like the users credentials (see trust evaluation).
2. Certificate revocation
Certificate revocation is concerned with canceling a previously issued certificate.
Conditions of certificate revocation should be specified by the security policy. Database of
revoked certificates should be available to everyone. As a general principle, a certificate is
considered to be valid if its validity period has not ended and if does not appear in the database of
revoked certificates. Additionally, the certificate includes the identifier of the certificate issuer
who can revoke signatures whole by himself.
3. Key selection
Key selection deals with obtaining a party's public key.
A PKI specifies a set of protocols, using which the key selection is performed. Generally, a party
may obtain other party's certificate whenever it is convenient for him. As said before, the
certificate is signed by the certificate issuer.
4. Trust evaluation
Trust evaluation is determining whether a certificate is valid and what operations it authorizes.
PKI consists of:
o An organisation that issues digital certificates. This organisation is called a certification authority.
o A method of strong and publishing digital certificates and certificate revocation lists.
o Technical, operational and managerial procedures concerned with issuing and managing digital certificates.
o Well defined ways for applications to use the digital certificates.
o Support for inter-operation between different certification authorities.

18.6 Benefits of e-commerce

To engage in E-commerce, a company needs to develop an E-commerce site which is nothing but an interactive
website and fill it with web pages that can inform customers, display product catalogs, conduct transactions and
provide feedback and results.
E-commerce has a number of potential benefits to both consumers and businesses.

18.6.1 Benefits to Consumers

o Purchase can be made anywhere and anytime with a computer and an Internet connection.
o Online shopping is convenient, cost competitive and full of choices.
o Faster delivery of products and services.
o Customers can give direct feedback on product and services.
4.14 MANAGEMENT INFORMATION SYSTEMS IN MODERN BUSINESS
o Customer gets a good deal directly from the manufacturer
o Independent source of information on products and services from other users.
o Cost of electronic transaction is typically lower than other forms of transactions.
o Requires minimum infrastructure at the customer end.

18.6.2 Benefits to Business

o Virtual store with a global customer base instead of a main street store with a local customer base.
o Information can be kept up-to-date.
o The E-commerce site acts as a branch office on the Internet, providing round the clock customer sales and
service.
o Direct sales to customer eliminating third parties in the distribution channel.
o Reduction in costs, paper work and time lag.
o Generation of greater revenue.
o Reduction in cycle time for order processing.
o Gain in productivity.
o No technology obsolescence.
o Faster turnaround time for information cutting the cumbersome communication costs.
o Secure (hopefully) and immediate.
o Reduction or relocation of manpower requirement.
o Business is online and near real-time. Hence down-times are reduced to minimum resulting in better
customer satisfaction.
o Direct feedback from customer resulting in better customer relationship.

19.0 E-commerce and Internet

19.1 Components for developing E-commerce
E-commerce Developer: one who develops the components of an E-commerce solution or application for an e-
business.
Electronic Payments Systems Specialist: One who develops and support requirements for all electronic payment
options and access delivery methods. Maintain technical and marketing documentation related to features, function,
and implementation processes. Coordinate all operational support requests in conjunction with card associations
and third party.
Web Application Developer: one who develops business application over Internet and Intranet that leverage a
company’s web presence.
Website Designer and Developer: develops front end of a company’s E-commerce and web solutions. Integrate
new designers onto the web environment using HTML, Java Script and manage dynamic content.

19.2 Website Management

“Site” means ‘situation’ or ‘location’, or simply a ‘place’. “Website” means a ‘place in the web’ (i.e. ‘web server’).
We already know the importance and significance of a Web site, with special reference to e-commerce.
Chapter 4 BUSINESS INTEGRATION AND E-BUSINESS 4.15
In simple words, a website is nothing but a space on web-server with a specific and uniquely identifiable address
(known as URL); where relevant forms/web-pages (information written & displayed in form of pages) are stored
for display or other actions on request.
The hosting authority or the ISP charges some money for hosting (i.e. putting up) the website. Rent (monthly or
yearly basis, or contractual basis) are charged for occupying the web-space. Hence, the space of website varies
according to requirement.
Webpages are written with the intention of being displayed on web browsers, which may be Internet Explorer (of
MS Windows), Netscape Navigator, Mosaic, etc. Since all the web browsers are able to display HTML codes, it is
not difficult to write Browser-independent web pages. There are some minute differences between different web-
browser companies. These differences should be kept in mind at the time of designing the web-page and it is
desirable to mention the make (and version) of browser with which the browser can be best viewed.
Webpages are of two types: Static and Dynamic. Dynamic pages are prepared on-spot, based on the need of the
situation. Examples of such pages may be display of student’s mark-sheet, etc. Static pages display same
information, unless otherwise altered by the programmer or the administrator of the website.
Website management refers to usage and application of technologies and techniques to maintain and administer a
website.
Website management refers to optimal use of web resources available to business organisation, with reference to
the following points:
 Cost factor (cost is incurred by the organisation for hosting and maintaining a website; the site must provide
quicker access and download facilities, otherwise users will not be interested to access such sites, since staying
connected to the site and accessing it requires the user to pay costs to ISP and/or telecommunication
organisation].
 Prompt display and quick down loading [may be by using FTP protocol, if required]
 Effective use of web space
 Regular updations of site
 Quick link [the site must be linked to other site, so that the site can be accessed by potential users, unaware of
the address].
 Security [regarding database, e-transactions, etc.].
The security aspect of website is obviously a major concern, which has to be maintained with utmost importance
and priority. Following are the major issues which confront a user in regard to security issues, are:
 Confidentiality [privacy, regarding contact numbers, bank account, etc. of the user, is to be mentioned.]
 Integrity [Information put on the site must be true, correct and honest. Moreover there should not be any
mismatch of information]
 Authenticity [i.e., genuineness and validity]
 Availability
 Auditability [It must be possible to track-back events or actions. For example, suppose an user requests for an
e-mail address at that web-site. This user must be traceable, suppose by an alternate email address or by the I.P.
Address from which the request was made; such that if required the ISP may be contacted to provide with
actual physical location (i.e., location on Earth), of that IP].

19.3 Third Party sites

For completing an action, some third party sites may be needed. For example, one needs to view the ‘terms and
conditions’ or the ‘usage manual’, which are converted and stored in (say) .pdf format — which is a copyright of
Adobe systems. Now, in order to read these, the website of Adobe System has to be contacted to request for the
reader-software. Adobe distributes Portable document formant reader (or PDF reader), free of charge. Thus we see
that third party sites are sometimes required for completion of an event; not for logical matters, but for technical
matters.
4.16 MANAGEMENT INFORMATION SYSTEMS IN MODERN BUSINESS
Another example may be of VerySign, which is known as Certifying Authority, providing digital certifications for
ensuring and securing and authenticating electronic transactions, such as EFT, etc.

20.0 M-Commerce
Cellular phones are wireless personal telephones. A cellular system partitions geographical areas into cells; each
cell has a base station with a radio transmitter, a receiver, an antenna and a computer. Cellular phone technology
uses a low-power transmitter attached to each cell (a small area), thus increasing the number of frequencies
considerably available to mobile phone customers. Incoming calls are transmitted to a user’s telephone with radio
waves, using a unique set of radio frequencies for each cell, while a central computer and other communication
devices send, receive track and manage cells and handoff from one to another cell.
Mobile Commerce, commonly referred to as m-commerce, means the ability to pay for merchandise services of
information through a mobile phone.
The technology which enables Mobile or other Wireless devices to access and utilise Internet, is known as
“Wireless Application Protocol” or WAP, in short.
M-commerce is gradually gaining significance due to reasons, such as —
• Mobile phones are ‘personal’ in true sense and therefore the most secured device for oneself. This is
because no one (generally) needs to share Mobile, and if in extreme case, requires sharing Mobile phone,
shares with very very near ones, who can be highly trusted.
• Mobile is a portable device, which can be carried anywhere, anytime with least effort. Mobile can serve at
location (considering there is tower strength) — e.g. on the 15 th floor, as well as on the ground floor; even
while travelling in car, or walking the footpaths, or climbing the stairs.
• Mobile, being a wireless device, does not need any wire-set or connection-box, etc. in order to be
connected to the Internet, or the Mobile network.
• Power backup (i.e. battery charge) is sufficient for, at least one day’s work and normally a charger is not
needed to be carried (unlike say, Laptop, etc.)
• Mobile is truly portable in all aspect; take for example a laptop, which weighs more or less 1 kilo and needs
a separate carry-bag.
WAP provides needed medium to connect in a secure, fast, nimble, online, interactive way with services,
information and other users.
WAP applications have a major role to play in easing business processes in every situation where information
exchange is a critical need. WAP is being used to develop enhanced forms of existing applications and view
versions of today’s emerging applications.
WAP, in mobile, is so convenient that, if Law and Technology permits, the taxi driver may be paid over WAP
through mobile, etc.

21.0 Application of electronic technology in other fields

21.1 Electronic Banking
Banking is generally understood as a place where the financial services are offered, viz. checking, savings and
providing credit to the customers. The scope of this service in today’s world is expanded where the banks have
become an instrument in providing financial assistance to a number of activities as a policy or by regulation or for
meeting socio-economic obligations.
Banks have a wide range of customers like individuals, institutions, trusts, business organisations, Government,
local bodies, etc. Customers choose the bank mainly for the following factors:
• Ease of doing business
Chapter 4 BUSINESS INTEGRATION AND E-BUSINESS 4.17
• Quality of personnel and service
• Range of the financial services
These factors outrank the factors such as the location, the interest rates, the lay-out, the banking hours, etc.
Banks deal with a number of transactions which also vary widely in terms of length and complexity. Bank
customer, like any other service industry, is interested in getting terminal results quickly. The distinctive service in
banking mostly means solving the customers’ problems in the financial matters and the single, most widely used
measure of quick service is the elapsed time of transaction execution. For example, the time taken for crediting the
amount, withdrawal of cash, the sanction of a loan or credit facility, etc. are the norms of deciding a good service.
Customers are willing to know current status of their account balance and a listing detail of transactions incurred in
that period of (say) one month.
The banking industry relied on computers for decade before e-commerce. Computers were mainly used to for
utilising the power of databases. Databases would keep relevant data about customer, transaction details and etc.
Computers were required to process daily transactions to keep the bank in an updated position.
With the advent of advanced computing features and reliable telecommunication systems, branches of banks were
joined with each other, so that a collaborative view can be obtained. Life became busy. More and more counters
were required for cheque deposit, money deposit and withdrawal of cash from bank accounts. To do this, various
bank counters were needed to be opened and maintained in several places. Consequently, ATM cards were
introduced. ATM stands for Any Time Money. These cards are electronic cards bearing details of account-holder,
when inserted into specially designed machines, and supplied with the PIN (Personal Identification Number), a link
is established with that machine and the account-holder’s database located somewhere else, via the communication
network. The customer requests for the amount of cash to be withdrawn and if account balance permits, the
machine slips out the requested amount in given currency notes. This was the first step towards e-banking.
The next step in e-banking for customers, is to provide additional banking services and transactions through
personal computers linked to the Web. There are other services provided by e-banking facilities, such as share
transfer, payment of electric/etc. bills through Internet-Banking.

21.2 E-Governance
Electronic Technologies (such as Networking, Communication, Internet and Computing) applied in performing
Governmental duties and activities, constitutes ‘e-governance’.
E-governance is defined as a mere government services and information to the public using electronic means.
E-governance aims at providing public a platform to interact with Government in its planning/decision-
making/implementing phases, such that the Government could function as a real open-system model, with
suggestions, ideas and feedback from its citizens. E-governance also helps to bypass a middle tier which would
otherwise be concerned with collecting such feedback and suggestions, etc.
Communicating with Government using electronic technologies — is not what e-governance is. E-governance is
beyond that, where citizens are invited to provide supportive and executive role in Governmental activities. To do
these, Citizens need to communicate and to some extent interact with the Government, using electronic
technologies such as e-mail, etc.
E-governance reduces cost, increases efficiency. Using e-governance, one Governmental departmental
officer/minister can video conference with another, situated at remote geographical area, which would otherwise
need personal visit by traveling over many kilometers and incurring costs about many times that of video
conferencing.

21.3 Geographical Information Systems (GIS)

Signals from the Satellites are utilised by computers to form the Geographical Mapping of the Earth (or part
thereof), and also to analyse things happening on Earth or part thereof (such as deforestation, etc.).
GIS is used by:
• police/security department(s);
4.18 MANAGEMENT INFORMATION SYSTEMS IN MODERN BUSINESS
• by Transport organisations involved in delivery of letters/goods/etc.;
• Marketing department of a company
• Municipal Corporations, in planning city development
• Mining industry
• Construction industry (in measuring land-plots/leaving road spaces, etc.)
• and lots more

21.4 Virtual Reality

Virtual reality is basically an interactive artificial reality created by the computer. It is an emerging application area
in artificial intelligence. Users perceive the environment in three dimensions and are able to interact with objects
and people. This field is developing multi-sensor human/computer interfaces (such as video/stereo head sets and
fibre optic gloves and body suites) than enables users to experience computer simulated objects, spaces and
activities, as if they existed in reality. Using virtual reality technologies, one can virtually feel climbing Mount
Everest, when actually lying on hospital bed with injured leg!
Virtual Reality may become very useful for training purposes, such as training fire-extinguishers’ in a situation
when a plane had caught fire just while landing; training of doctors in performing surgical operations, training
pilots, etc.

22.0 Concept of Global Village

Globalisation introduces the ability to establish ‘virtual companies’ — i.e. companies which can be based in any
country in the World, but only have a presence on the Internet. It is impossible to actually visit these companies
personally and thus, (almost) all transactions are carried out electronically. Although Internet existed long back,
business has taken to Internet not very long ago.
One of the effects of the Internet is to provide faster and more reliable communication systems, not just within
organisations but also throughout the whole of society. This means that work, specially knowledge work, is not
dependent on location. As long as a telephone or similar high-speed line is available, then work can take place in
any location. The Internet may well result in increased use of home working as organisations seek to limit expense
on office space and provide appropriate communications tools to their employees.
Information Systems provide the communication and analytic power that firms need for conducting trade and
managing business. For world-wide business management, firms have developed Global Information Systems that
can track orders, deliveries and payments, communicate with distributors and suppliers and can operate 24×7, even
in different national environment. In short, the controlling the far-flung global corporation is a major business
challenge that requires powerful Information Systems. The development in IT could provide this facility to business
and thereby convert the world into global village in terms of communications.
There are several hindrances towards ‘Global village’, such as —
♦ International decision making
In some countries (e.g. USA, UK, etc.), email has become a socially accepted method of
communication. Implementation of a global email system is difficult because there are still certain
countries which do not have the IT infrastructure or where the socially accepted method of
communication is to send a letter/fax/etc.
♦ Cultural differences
The concept of 24-hour support for products may be a good selling point, but cultural or social
differences may limit the support or help. Suppose a call is to be made from India to USA and that
call is made in mid-day in India. This call is not received in USA because it is mid-night in USA
and therefore transferred to (say) Darwin (in Australia), where it is almost evening. Difficulty
arises particularly in areas such as language, habit of information exchange (i.e. where one culture
Chapter 4 BUSINESS INTEGRATION AND E-BUSINESS 4.19
is to allow for detailed questioning and on the contrary, the other expects the caller to provide all
the relevant information).

♦ Data protection legislation

Individual countries tend to implement their own data protection legislation. Issues may arise
where the data protection in one country prohibits the transfer of data to another country that does
not have similar laws (e.g. between Europe has more detailed legislation unlike US having
relatively little legislation). This type of legislation can limit the usefulness of global information
networks and therefore the ease with which international workgroups can work together.
♦ Political or legal regimes
Political and legal regimes vary from country to country, affect data transfer. This may include
different laws regarding working hour, trade terms, taxation, etc. Certain items may be banned in
certain countries, whereas that item may be one of the chief item consumed in other country. For
example, country A is the main exporter of (say) snake’s leather but articles made of snake’s
leather is banned in country A. Country B, who is the major importer of snake’s leather from
country A. In country B, this item is very popular. Therefore, advertisements of these products will
be found in plenty in country B, but the same has to be banned for Country A.
Thus, we observe that most of the above hindrances regarding Global village are mostly non-technical issues.
Hence, we may conclude that IT has played important responsibility in ‘shrinking the World into a village’ and
thereby forming a “Global village”.
The World is shrinking. That was what everyone believed when steam engines and other transportation means
changed the way people lived. Then again global communication facilities made the world appear even smaller.
Now Internet is affecting human living more than any other change that the world went through. If living styles
changes, business methods and practices also have to change.
4.20 MANAGEMENT INFORMATION SYSTEMS IN MODERN BUSINESS

Summary
• Electronic Data Interchange or EDI facilitates transfer of
electronic data between different (i.e. intra) organisations,
without the need for data conversion for transportation. EDI is best
beneficial since it avails low-cost; prompt, if not instant;
paperless; less-human involvement-oriented transfer of data. The
disadvantage is that initial implementation cost is so high that it
is not advisory for small concerns to adapt EDI.

• Enterprise Resource Planning (ERP) enables a firm to operate in

decentralized manner, yet enjoy facilities of centralization
regarding resource planning and organising. Thus, ERP enables inter-
organisation resource planning.

• Data Warehouse is a large database which enables integration of

various objects and subject, collected from various sources and
applications for prompt analysis of business situation; using the a
tool, known as Data Mining.

• E-commerce is a location independent, electronic form of conducting

business through Internet — having several opportunities and threat
aspects.

• Mobile phones or Cellular phones are most portable and most personal
devices; which are best suited for personal-transactions. Commerce
through Mobile is known as M-Commerce.

• Apart from the above business oriented application, Electronic

technology (Internet, etc.) has significant application in other
fields of life — such as, e-Governance, e-learning, e-banking,
Geographic Information System, etc.

• Improved communication and computing has brought about revolution in

improved (hardware/software) technologies, giving birth to Virtual
Organisations and the concept of less-paper remote working. All
these and other factors, has overcome the vastness of Earth. The
earth has, as if shrunk to a village. This is the concept of Global
Village. There are facilities which support this concept. On the
contrary, there are hindrances or barriers which oppose this concept
and prevent its propagation.

Self-test Questions
1. State the concept, working procedure, components, advantages and disadvantages of EDI, ERP, and
Data Warehousing.
2. What does Data Mining do? Where is it used? What is Meta Data?
3. What are virtual organisations and how do they operate business through e-commerce?
4. Why are Mobile Phones, also known as Cellular phones? What is the purpose of using ‘Cell’ concept?
5. Explain M-commerce; mention the advantages, disadvantages and limitations regarding M-commerce.
6. What is e-Governance?
7. Elaborate the topic “Global Village”.
Chapter 4 BUSINESS INTEGRATION AND E-BUSINESS 4.21
—

14.0 Electronic Data Interchange------------------------------------------- --------------------------------1

14.1 Introduction to EDI 1
14.2 Components of EDI 2
14.3 Functioning of EDI 2
14.4 Benefits of EDI 3
14.5 Limitations of EDI 3
14.6 Security in EDI 3
15.0 Enterprise Resource Planning (ERP)----------------------------------------------------------------4
15.1 Genesis of ERP 4
15.2 Definition of ERP 5
15.3 Evolution of ERP 5
15.4 Characteristics of ERP 6
16.0 Data Warehousing---------------------------------------------------------------------------------- ------6
16.1 Objectives of Data Warehousing 6
16.2 Benefits of Data Warehousing 6
16.3 Data Warehouse and MIS 7
16.4 Meta Data 7
16.5 Data Mining 7
17.0 Corporate Information Management System (CIMS)--------------------------------------------8
18.0 Electronic Business (e-commerce)----------------------------------------------------------------- ----8
18.1 E-Commerce 8
18.2 Elements of e-commerce 9
18.3 Models of e-commerce 9
18.3.1 Business to Business (B2B) 10
18.3.2 Business to consumer (B2C) 10
18.3.3 Consumer to Business (C2B) 10
18.3.4 Consumer to Consumer (C2C) 10
18.4 E-commerce process 10
18.5 Securing e-payments 11
18.5.1 Cryptography 12
18.5.2 Encryption/decryption techniques 12
18.5.3 Cryptographic Algorithms 12
18.5.4 Public Key Infrastructure 12
18.6 Benefits of e-commerce 13
18.6.1 Benefits to Consumers 13
18.6.2 Benefits to Business 14
19.0 E-commerce and Internet----------------------------------------------------- ------------------------14
19.1 Components for developing E-commerce 14
19.2 Website Management 14
19.3 Third Party sites 15
4.22 MANAGEMENT INFORMATION SYSTEMS IN MODERN BUSINESS
20.0 M-Commerce------------------------------------------------------------------- -------------------------16
21.0 Application of electronic technology in other fields----------------------------------------------16
21.1 Electronic Banking 16
21.2 E-Governance 17
21.3 Geographical Information Systems (GIS) 17
21.4 Virtual Reality 18
22.0 Concept of Global Village----------------------------------------------------- ------------------------18