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eCommerce Technology
20-751
Lecture 1: Overview
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
Course Administration
• Instructor: Michael Shamos ([email protected])
• Teaching assistant: Jie Hu ([email protected])
• Course web page: through Blackboard or
http://euro.ecom.cmu.edu/program/courses/tcr751/official.shtml
• Slides posted on web page the night before lecture
• 14 lectures, 4 homeworks, 1 final exam
• Grading
– Homework 40% (10% each)
– Class participation 10%
– Final exam 50%
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
Working Together
• You may (and should) study together and discuss homework
• You should surf the Web to learn more about course topics
• BUT: ALL WORK YOU SUBMIT MUST BE YOURS ALONE
• You must list the names of the people you worked with
• You must give credit for any material that is not yours
• If you need to include material from another source, state
exactly where it came from (give URL, etc.)
• DO NOT ATTEMPT TO COPY MATERIAL FROM WEB PAGES
AND SUBMIT IT AS YOUR HOMEWORK
You will be caught. Your career will end. Fast.
• Penalties for violation: zero credit, course failure, expulsion
• See University Policy on Cheating and Plagiarism
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
What is Commerce?
• Middle French, from Latin commercium, from
com- (together)+ merc- (merchandise) (1537)
“The exchange or
buying and selling of commodities
on a large scale
involving transportation from place to place.”
• Buying and selling ( transactions )
NEED TECHNOLOGY
TO SUPPORT
• Large scale (  scalability )
ALL OF THESE
• Transportation ( supply chain )
• Every business process in the world must be
re-engineered: “Can it be made electronic?”
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
Commerce (8000 B.C.)
BUYER
FINDS
SELLER
SELECTION
OF GOODS
NEGOTIATION
SALE
PAYMENT
DELIVERY
INFORMATION
PHYSICAL+
INFORMATION
20-751 ECOMMERCE TECHNOLOGY
POST-SALE
ACTIVITY
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
eCommerce
SOME TECHNOLOGIES USED:
SEARCH ENGINE
ON-LINE CATALOG
RECOMMENDER AGENT
SOME INFORMATION GATHERED:
BUYER
FINDS
SELLER
SEARCH BEHAVIOR
BROWSING BEHAVIOR
CUSTOMER PREFERENCES
CONFIGURATOR
SHOPPING BOT
SELECTION
OF GOODS
EFFECTIVENESS OF PROMOTIONS
BARGAINING STRATEGIES
AGGREGATOR
AUTOMATED AGENTS
TRANSACTION PROCESSOR
NEGOTIATION
PRICE SENSITIVITIES
PERSONAL DATA
SALE
MARKET BASKET
DATA INTERCHANGE
CRYPTOGRAPHY
PAYMENT
E-PAYMENT SYSTEMS
TRACKING AGENT
CREDIT/PAYMENT INFORMATION
DELIVERY REQUIREMENTS
DELIVERY
ON-LINE PROBLEM REPORTS
INFORMATION
PHYSICAL+
INFORMATION
ON-LINE HELP
BROWSER SHARING
POST-SALE
ACTIVITY
FOLLOW-ON SALES OPPORTUNITIES
INTERNET TELEPHONY
20-751 ECOMMERCE TECHNOLOGY
CUSTOMER SATISFACTION
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
THE ELECTRONIC ENTERPRISE
S2S
ENTERPRISE RESOURCE
PLANNING
SCM
ERP
Strategic
Planning
Collaborative SCM
Demand
Planning
Collab.
Planning
Mfg.
Exec.
E-Mail
WH
Mgmt.
Portal/
Extranet
Trans.
Mgmt.
CUSTOMER RELATIONSHIP
MANAGEMENT
Distrib.
Planning
Supply
Planning
IndustrySpecific
Solutions
Mfg.
Finance
Web/
Intranet
Fact. HH
Devices
HR
Voice
(IVR, ACD)
Svc.
Auto.
Product Employee Legacy
Mgmt.
Systems Systems
Mfg.
Planning
Trans.
Planning
CRM
Marketing
Auto.
Order
Mgmt.
Conf.
Sales
Auto.
Logistics
Web
Storefront
Mobile Sales
(Prod. CFG)
Employee
SS
Field
Service
Collaborative CRM
SUPPLY CHAIN
MANAGEMENT
E-Mail
Operational
EDI
Closed-Loop Processing
(EAI Toolkits, ETLM Tools,
Embedded Mobile Agents)
Conf.
Direct
Interaction
DW
KM/CM
Financ.
DM
HR
DM
Cust.
DM
Analytical
Order
DM
Prod.
DM
ACD = AUTOMATIC CALL DISTRIBUTOR
CFG = CONFIGURATION
DM = DATA MINING
DW = DATA WAREHOUSE
ETLM = EXTRACT, TRANSFORM, LOAD
& MANAGE
HH = HAND-HELD
IVR = INTERACTIVE VOICE RESPONSE
SOURCE: META GROUP
Internet-Connected Supply Chain
Wholesale
Distributors
Suppliers
Manufacturers
Supplier
Exchanges
Logistics
Exchanges
Logistics
Providers
Customers
Customer
Exchanges
Virtual
Manufacturers
Contract
Manufacturers
Information Flow
Goods Flow
Logistics
Providers
SOURCE: AMR RESEARCH (2000)
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
Why eCommerce? Why Now?
• Computers are faster
– 1973:
1 million instructions/sec
– 2003:
2 billion instructions/sec
• Have more main memory
– 1973:
0.125 megabytes
– 2003:
512.0 megabytes
• Cost less
– 1973:
$4,000,000
– 2003:
$1,000
• Speed/size/cost improvement factor: 32 billion
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
Progress of Technology
• Have more disk storage
– 1973:
– 2003:
IMPROVEMENT: 12000 x
10 MB
120,000 MB (soon 1 terabyte = 1000GB)
• Higher communication speeds
–
–
–
–
–
–
–
Human speech:
30 bits/sec
1973 Modem
300 bits/sec
2003 Modem:
56,000 bits/sec
T1 line:
1,544,000 bits/sec
DSL (high end)
7,000,000 bits/sec
Internet 2:
1,000,000,000 bits/sec
Optical 10,000,000,000,000 bits/sec in 1 fiber
(entire U.S. telephone traffic)
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
1973-2003
IMPROVEMENT:
30 BILLION x
COPYRIGHT © 2003 MICHAEL I. SHAMOS
eCommerce Technology Topics
• Infrastructure
• Wireless
• Web Architecture
• Search engines
• Cryptography
• Network security
• Electronic payments
• Databases
• Mass personalization, CRM,
Data Mining
• Privacy Technology
• Enterprise Resource Planning
• Intelligent agents
• Data interchange
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
eCommerce Infrastructure
• What worldwide structure is required to support
eCommerce?
• Network + communications
– Required course: Communications and Networking (20-770)
• Machines
• Software
– Required course: Core Java for eCommerce (20-753)
• Protocols
• Security
• Payment
– interface to banking systems
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
The Internet
• The fundamental technology linking business and
people around the world in less than 1 second
– Nothing competes with it
• How does it work?
• How big is it?
• Who owns it? Who governs it?
• How does it grow? How big can it get?
• What architecture allows this?
• What are the limitations?
• Required course: The Internet (20-755)
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
Wireless Technologies & mCommerce
• Can’t get (much) away from radio
• Differences between wireless and wired
communication
• Cells, frequency allocations
• Shared medium: SDMA, FDMA, TDMA, CDMA
• 1G, 2G, 2.5G, 3G, 4G
• Wireless LAN: IEEE 802.11
• Bluetooth
• WAP, iMode
• Universal Wideband (UWB)
• Elective Course: Mobile eCommerce (20-863)
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
Web Architecture
How are web sites constructed?
TIER 4
Database
TIER 3
Applications
TIER 2
Server
Elective Course: eCommerce Web Application Development (20-860)
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
TIER 1
SOURCE: INTERSHOP
COPYRIGHT © 2003 MICHAEL I. SHAMOS
Search Engines
• Finding web pages
– Crawlers, spiders, bots
• Query interfaces
• Retrieval methods
– Indexing
– Document ranking
– Artificially altering retrieval order
• Document clustering
• Multilingual issues
• Multimedia retrieval
• Required Course: Web-Based Information Architectures (20-760)
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
Cryptography
• Secrecy
– Information cannot be used if intercepted
• Authentication
– We’re sure who the parties are
• Integrity
– Data cannot be altered
• Non-repudiation
– Sender cannot deny sending the message
• Cryptography
– Symmetric encryption (DES, Rijndael)
– Public key cryptosystems (RSA)
– Digital signatures & certificates, public key infrastructure (PKI)
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
Network Security
• Access control
– authorization / authentication
• Authentication
–
–
–
–
•
•
•
•
something you know: passwords
something you have: smart card
something you are: biometrics
someplace you are: GPS
Network protection, firewalls, proxy servers
Intrusion detection
Denial of service (DOS) attacks
Viruses, worms
• Required course: Computer Security
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
Data Interchange
• How can sites exchange information without prior
agreement?
– What do the data fields mean? price, extended price, unit
price, prix, цена, τιμή, 가격 , X’AC12’
– XML: Extensible Markup Language
• How can machines communicate without humans?
• How can data formats and structures be
communicated?
– XML schemas
– Ontologies
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
eCommerce Data Exchange Needs
RFQs
Ship Notices
Catalogs
Letters of Credit
Quotations
Purchase Orders
Electronic Payments
Bills of Lading
Invoices
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
Electronic Payments
• Forms of money
– token (cash), notational (bank account), hybrid (check)
• Credit-card transactions
– Secure protocols: SSL, SET
• Automated clearing and settlement systems
– PayPal
•
•
•
•
Smart cards, electronic cash, digital wallets
Micropayments
Wireless payments
Electronic invoice presentment and payment
– Moore
• Required course: Electronic Payment Systems (20-763)
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
Databases
•
•
•
•
•
The relational database model
Query specification: SQL (Structured Query Language)
Database management
Databases in eCommerce
Data warehousing
• Required course
– Database Management (Heinz School)
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
Mass Personalization & Data Mining
• Treating each user as an individual
– key is INFORMATION
• How to acquire and store information about
customers
– Cookies
– Question and response
– Clickstream analysis
– External databases. Allegheny County
• How to use information effectively and instantly
• Personalization technology
• Customization: Lands’ End
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
Data Mining
• Extracting previously unknown relationships from
large datasets
• Discovery of patterns
• Predicting the future
– past behavior as predictor of future purchasing
• Market basket analysis
– diapers/beer
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
Data Mining Tools
• Visualization (“seeing” the data) Table Lens
• Predictive Modeling
• Database Segmentation
– Classify the users
• Link Analysis
– Association discovery
• Neural networks
– Systems that learn from data
• Deviation Detection
– Are any of the data unusual? Fraud detection
• Elective course: Data Mining (20-852)
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
Privacy Technology
• Digital privacy & privacy threats
• Technology
– P3P
– EPAL
• Anonymity
– Mediation
– Digital pseudonyms
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
ERP (Enterprise Resource Planning) &
SCM (Supply Chain Management)
• The supply network
• Collaboration models
– Vendor-managed inventory
– Scan-based trading
• ERP functions and architecture
• EAI (Enterprise Application Integration)
• Web Services
• Required course: Supply Chain Management 46-866
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
Agents and Electronic Negotiation
•
•
•
•
Programs to perform tasks on your behalf
Avatars (characters in human form)
Metasearchers, shopping bots, news agents, stock
agents, auction bots, bank bots
How to make agents “intelligent”
– Rule-based systems
– Knowledge representation
Agents that learn
– Inductive inference
JULIA from CONVERSIVE
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
Cooperating Agents
Doctor
Pete
Lucy’s agent looks up providers,
checks for distance, authorization
Schedule a treatment plan using onlyLucy’s agent formulates a scheduleand rating.
authorized providers within a 20-miles of appointments for therapists that
Lucy’s agent retrieves information
and a rating of excellent or very good.fits into Pete and Lucy’s schedule.
about Mom’s prescribed treatment
from the doctor’s agent.
Semantic Web
Lucy
SOURCE: WILLIAM HOLMES, LOCKHEED-MARTIN
M2M Commerce & Auction Models
• How can machines do business with other
machines?
• Electronic discovery
• Electronic negotiation
– Auction strategy
• The semantic Web
• Two elective courses:
– Intelligent agents (Katia Sycara) 20-854
– Electronic Negotiation (Tuomas Sandholm) 20-853
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS
Q&A
20-751 ECOMMERCE TECHNOLOGY
FALL 2003
COPYRIGHT © 2003 MICHAEL I. SHAMOS