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Enabling eBusiness: Integrating Technologies, Architectures and Applications W.S. Whyte Copyright q 2001 John Wiley & Sons, Ltd ISBNs: 0-471-89941-0 (Hardback); 0-470-84602-X (Electronic) Enabling eBusiness Enabling eBusiness: Integrating Technologies, Architectures and Applications W.S. Whyte Copyright q 2001 John Wiley & Sons, Ltd ISBNs: 0-471-89941-0 (Hardback); 0-470-84602-X (Electronic) Enabling eBusiness INTEGRATING TECHNOLOGIES, ARCHITECTURES AND APPLICATIONS W.S. Whyte University of Leeds, UK JOHN WILEY & SONS LTD Chichester X New York X Weinheim X Brisbane X Singapore X Toronto Enabling eBusiness: Integrating Technologies, Architectures and Applications W.S. Whyte Copyright q 2001 John Wiley & Sons, Ltd ISBNs: 0-471-89941-0 (Hardback); 0-470-84602-X (Electronic) Copyright q2001 by John Wiley & Sons Ltd, Baffins Lane, Chichester, West Sussex PO19 1UD, England National 01243 779777 International (+44) 1243 779777 e-mail (for orders and customer service enquiries): [email protected] Visit our Home Page on http://www.wiley.co.uk or http://www.wiley.com All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except under the terms of the Copyright, Designs and Patents Act 1988 or under the terms of a licence issued by the Copyright Licensing Agency, 90 Tottenham Court Road. London, UK W1P 0LP, without the permission in writing of the Publisher, with the exception of any material supplied specifically for the purpose of being entered and executed on a computer system, for exclusive use by the purchaser of the publication. Other Wiley Editorial Offices John Wiley & Sons, Inc., 605 Third Avenue, New York, NY 10158-0012, USA WILEY-VCH Verlag GmbH Pappelallee 3, D-69469 Weinheim, Germany John Wiley & Sons Australia, Ltd, 33 Park Road, Milton, Queensland 4064, Australia John Wiley & Sons (Canada) Ltd, 22 Worcester Road, Rexdale, Ontario, M9W 1L1, Canada John Wiley & Sons (Asia) Pte Ltd, 2 Clementi Loop #02-01, Jin Xing Distripark, Singapore 129809 Library of Congress Cataloging-in-Publication Data Whyte, Bill. Enabling eBusiness: integrating technologies, architectures, and applications / W.S. Whyte, p. cm. Includes bibliographical references and index. ISBN 0-471-89941-0 (alk. paper) 1. Electronic commerce. I, Title. HF5548.32 .W49 2001 658.804–dc2l 2001017599 British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library This title is also available in print as ISBN 0 471 89941 0 Typeset in 10/12 Times by Deerpark Publishing Services Ltd, Shannon Enabling eBusiness: Integrating Technologies, Architectures and Applications W.S. Whyte Copyright q 2001 John Wiley & Sons, Ltd ISBNs: 0-471-89941-0 (Hardback); 0-470-84602-X (Electronic) Contents Dedication vii Preface ix Introduction to eBusiness 1 Part 1: Electronic Retailing 1 The Principles of Electronic Retailing 11 2 Retailing Network Technologies 19 3 Retail Terminals 45 4 The Retail (eCommerce) Server 89 Part 2: Creating eBusiness 1 eBusiness Systems Architecture 119 2 Managing eBusiness Knowledge 171 Part 3: Trust, Security and Electronic Money 1 Trust 211 2 Security 221 3 Electronic Money 283 Part 4: Service, Supply and Marketing 1 Service and Support 297 2 Supply Chain Management 329 3 Electronic Marketing 363 Appendices Appendix A: ePeople: Choosing the Team 397 Appendix B: eBusiness: The Future 409 Bibliography 417 Index 423 Enabling eBusiness: Integrating Technologies, Architectures and Applications W.S. Whyte Copyright q 2001 John Wiley & Sons, Ltd ISBNs: 0-471-89941-0 (Hardback); 0-470-84602-X (Electronic) Dedication To Marian, Alasdair and William Enabling eBusiness: Integrating Technologies, Architectures and Applications W.S. Whyte Copyright q 2001 John Wiley & Sons, Ltd ISBNs: 0-471-89941-0 (Hardback); 0-470-84602-X (Electronic) Preface It is the purpose of this book to explain how technology can enable end-to-end eBusiness. It is addressed to a wide audience, not only nut-and-bolts technolo- gists, technical architects and team leaders, but also to functional managers, corporate strategists, instructors and students. All these require to share a common understanding in order to make eBusiness a success, because, as we say many times in the text, the task of understanding is at least as much cultural as technical. If I am at all successful in this aim, it is because I have been very fortunate in having so many colleagues in universities and industry who can cross those divisions. These people have been patient enough to put up with my incessant asking ‘But what is so-and-so and how does it work?’ Mostly my job has been the management of their knowledge and wisdom onto the pages of this book. The faults will be in the interpretation, not the source! One question definitely worth asking in this electronic age, is ‘What differ- entiates a book from an on-line document?’ and the answer is almost always, ‘Good editorship’. Here too, I have been very fortunate in again working with Ann-Marie Halligan and Laura Kempster. They and the rest of the team at Wiley, are truly professional and a pleasure to work with. Finally, I would also specif- ically like to thank Cliff Morgan of Wiley, for a most productive discussion on meta information – whatever the quality of the content of this book, I now at least know how to describe its electronic structure! W.S. Whyte [email protected] Enabling eBusiness: Integrating Technologies, Architectures and Applications W.S. Whyte Copyright q 2001 John Wiley & Sons, Ltd ISBNs: 0-471-89941-0 (Hardback); 0-470-84602-X (Electronic) Introduction to eBusiness eBusiness is a technical issue. The needs of enterprises and the desires of customers have not changed. Profitability remains the difference between income and costs. But, solely because of technology, major new opportu- nities for revenue growth and avoidance of expense have become feasible. eBusiness has happened entirely because of a conjunction of improve- ments in technologies and has yet to reach full speed and realise its potential. These technologies are, at the highest level, only two in number: more powerful computers and faster communication links. Replacing the physical store by its virtual equivalent will mean that dramatic reduction in the cost of real estate can be achieved and the saving invested on creating new eShops to increase revenue within a global market. In a competitive world, new costs will also be incurred. To handle the increased volume of business or to meet increased customer expectation, these on-line outlets must be backed up by on-line customer service operations which are available on 24 h/7 day terms and these must be integrated with slicker, electronically assisted supply and fulfil- ment operations. With this integration in place, it may no longer be necessary, or neces- sarily desirable, for any one company to do every thing to ‘get the melon to the customer’. Instead, a number of different companies will be able to work together in a virtual enterprise, provided information can be inter- changed effectively and securely. 1 eBUSINESS AND eCOMMERCE eBusiness is a broader and more easily defined term than the commonly used eCommerce. The latter is sometimes used narrowly to refer to ‘shopping on the Internet’ but also in a much broader context to include virtually every electronic trading and support activity a 2 Introduction to eBusiness business can undertake. In this book we use the term eCommerce rather informally to refer to a middle position, that of retailing, principally shopping. We do not restrict the delivery channel for these services to that of the Internet, since there are other channels, of which digital interactive TV and WAP mobile telephony are only two of the exam- ples we shall cover. We shall also use terms such as electronic retailing, on-line shopping/retailing and electronic merchants, more or less as syno- nyms. Again note that ‘on-line’ does not necessarily mean ‘Internet’ and, in the case of TV and mobile radio, the ‘line’ is conceptual rather than real. Where the range of activities is extended to cover such areas as logistics, marketing intelligence-gathering, collaborative working and so on, we prefer to use the term eBusiness. Sometimes when we want to emphasise the fact that access to the organisation is mainly via a communications network, we shall use the term virtual business. Where the business units and their electronic processes operate across a number of geographically separated sites, we shall talk about distributed business. If the conditions are such that a number of legally distinct trading entities set up systems that allow them to co-operate across distance, then we call this a virtual enterprise. 2 BASIC TECHNOLOGIES We said that there were only two base-level technologies involved in supporting the eBusiness explosion: computing and communications. But it is reasonable to point out that these have been around for some decades and to ask why they should suddenly have become the engines of dramatic change. The answer is simple: both of them have quite recently ‘turned the exponential’ in terms of performance and reduction in cost. It is now well-known that performance per dollar in computing systems doubles every 18 months or so, has been doing so for two decades, and is likely to continue to do so for at least 15 years (see the graph on page 65). By the end of this period, computers will be more than 1000 times as powerful as today’s machines, for the same price. A similar trend in telecommunications is happening. Twenty years ago, a single, heavy, rigid, expensive to install and maintain coaxial cable could carry a maxi- mum of around 10,000 voice telephone calls or their equivalent in data over a few kilometres.

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