E-commerce

business. technology. society.

Sixth Edition

Kenneth C. Laudon
Carol Guercio Traver

Copyright © 2009
2010 Pearson
Pearson Education,
Education, Inc.
Inc. Slide 4-1
 Chapter 4
Building an E-commerce Web Site

Copyright © 2009
2010 Pearson
Pearson Education,
Education, Inc.
Inc. Slide 4-2
 Right-Sizing a Web Site
Class Discussion
„ What are the factors you should take into 
account when sizing a Web site’s 
infrastructure?
„ Why is peak usage an important factor to 
consider?
„ What did eBay discover from its use of 
OPERA?
„ How can operators of smaller sites deal 
with the right‐sizing issue?
Copyright © 2010 Pearson Education, Inc. Slide 4-3
 Building an E-commerce Site:
A Systematic Approach
„ Most important management 
challenges:
™Developing a clear understanding of 
business objectives
™Knowing how to choose the right 
technology to achieve those objectives

Copyright © 2010 Pearson Education, Inc. Slide 4-4

 Pieces of the Site-Building Puzzle

„ Main areas where you will need to make 
decisions:
™ Human resources and organizational capabilities
„ Creating team with skill set needed to build and 
manage a successful site
™ Hardware

™ Software

™ Telecommunications

™ Site design
Copyright © 2010 Pearson Education, Inc. Slide 4-5
 The Systems Development Life Cycle
„ Methodology for understanding business 
objectives of a system and designing an 
appropriate solution
„ Five major steps:
1. Systems analysis/planning
2. Systems design
3. Building the system
4. Testing
5. Implementation
Copyright © 2010 Pearson Education, Inc. Slide 4-6
 Web Site Systems Development Life Cycle

Figure 4.2, Page 208
Copyright © 2010 Pearson Education, Inc. Slide 4-7
 System Analysis/Planning

„ Business objectives: 
™ List of capabilities you want your site to have

„ System functionalities: 
™ List of information system capabilities needed to 
achieve business objectives
„ Information requirements: 
™ Information elements that system must produce 
in order to achieve business objectives

Copyright © 2010 Pearson Education, Inc. Slide 4-8

Table 4.1, Page 209
Copyright © 2010 Pearson Education, Inc. Slide 4-9
 Systems Design:
Hardware and Software Platforms

„ System design specification: 
™ Description of main components of a system 
and their relationship to one another 
„ Two components of system design:
1. Logical design
„ Data flow diagrams, processing functions, databases
2. Physical design
„ Specifies actual physical, software components, models, etc.

Copyright © 2010 Pearson Education, Inc. Slide 4-10

 Logical Design for a Simple Web Site

Figure 4.3 (a), Page 211
Copyright © 2010 Pearson Education, Inc. Slide 4-11
 Physical Design for a Simple Web Site

Figure 4.3 (b), Page 211
Copyright © 2010 Pearson Education, Inc. Slide 4-12
 Build/Host Your Own versus
Outsourcing
„ Outsourcing: hiring vendors to provide 
services involved in building site 
„ Build own vs. outsourcing:
ƒ Build your own requires team with diverse skill set; choice of software 
tools; both risks and possible benefits

„ Host own vs. outsourcing
ƒ Hosting: hosting company responsible for ensuring site is accessible 
24/7, for monthly fee
ƒ Co‐location: firm purchases or leases Web server (with control over its 
operation), but server is located at vendor’s facility

Copyright © 2010 Pearson Education, Inc. Slide 4-13

 Choices in Building and Hosting

Figure 4.4, Page 212
Copyright © 2010 Pearson Education, Inc. Slide 4-14
 Insight on Business
Curly Hair and MotorMouths:
Getting Started on the Cheap
Class Discussion

„ How does a small, niche Web site become 
profitable?  
„ What is the primary source of income for 
these kinds of sites?
„ What benefits are there to starting a business 
in a recession?

Copyright © 2010 Pearson Education, Inc. Slide 4-15

 Testing, Implementation, and
Maintenance
„ Testing
™ Unit testing
™ System testing
™ Acceptance testing

„ Implementation and maintenance: 
™ Maintenance is ongoing
™ Maintenance costs: parallel to development costs 
™ Benchmarking
Copyright © 2010 Pearson Education, Inc. Slide 4-16
 Factors in Web Site Optimization

Figure 4.7, Page 219
Copyright © 2010 Pearson Education, Inc. Slide 4-17
 Web Site Budgets
„ From $5,000 to millions of dollars/year
„ Components of budget:
™System maintenance
™System development
™Content design & development
™Hardware
™Telecommunications
™Software
Copyright © 2010 Pearson Education, Inc. Slide 4-18
 Simple versus Multi-tiered Web Site
Architecture
„ System architecture 
™ Arrangement of software, machinery, and tasks in an 
information system needed to achieve a specific 
functionality

„ Two‐tier
™ Web server and database server

„ Multi‐tier 
™ Web application servers
™ Backend, legacy databases

Copyright © 2010 Pearson Education, Inc. Slide 4-19

 Two-Tier E-commerce Architecture

Figure 4.9(a), Page 221
Copyright © 2010 Pearson Education, Inc. Slide 4-20
 Multi-tier E-commerce Architecture

Figure 4.9(b), Page 221
Copyright © 2010 Pearson Education, Inc. Slide 4-21
 Web Server Software
„ Apache
™ Leading Web server software (47% of market)
™ Works only with UNIX, Linux OSs

„ Microsoft’s Internet Information Server (IIS)
™ Second major Web server software (25% of 
market)
™ Windows‐based

Copyright © 2010 Pearson Education, Inc. Slide 4-22

Table 4.3, Page 223
Copyright © 2010 Pearson Education, Inc. Slide 4-23
 Site Management Tools
„ Basic tools
™ Included in all Web servers

™ Verify that links on pages are still valid 

™ Identify orphan files

„ Third‐party software and services for 
advanced site management
™ Monitor customer purchases, marketing campaign 
effectiveness, etc.
™ E.g. WebTrends Analytics 9, Google Analytics
Copyright © 2010 Pearson Education, Inc. Slide 4-24
 Dynamic Page Generation Tools
„ Dynamic page generation: 
™ Contents of Web page stored as objects in database and 
fetched when needed
„ Common tools: CGI, ASP, JSP
„ Advantages
™ Lowers menu costs

™ Permits easy online market segmentation
™ Enables cost‐free price discrimination
™ Enables Web content management system (WCMS)

Copyright © 2010 Pearson Education, Inc. Slide 4-25

 Application Servers

„ Web application servers: 
™ Provide specific business functionality required for 
a Web site
™ Type of middleware
„ Isolate business applications from Web servers and 
databases
™ Single‐function applications increasingly being 
replaced by integrated software tools that 
combine all functionality needed for e‐commerce 
site
Copyright © 2010 Pearson Education, Inc. Slide 4-26
Table 4.4, Page 227
Copyright © 2010 Pearson Education, Inc. Slide 4-27
E-commerce Merchant Server Software
„ Provides basic functionality for online sales
™ Online catalog
„ List of products available on Web site

™ Shopping cart
„ Allows shoppers to set aside, review, edit selections, 
and then make purchase
™ Credit card processing
„ Typically works in conjunction with shopping cart
„ Verifies card and puts through credit to company’s 
account at checkout
Copyright © 2010 Pearson Education, Inc. Slide 4-28
 Merchant Server Software Packages

„ Integrated environment with most or all of 
functionality needed
„ Key factors in selecting a package
™ Functionality
™ Support for different business models
™ Business process modeling tools
™ Visual site management and reporting
™ Performance and scalability
™ Connectivity to existing business systems
™ Compliance with standards
™ Global and multicultural capability
™ Local sales tax and shipping rules
Copyright © 2010 Pearson Education, Inc. Slide 4-29
 Building Your Own E-commerce Site

„ Options for small firms
™Hosted e‐commerce sites, e.g., Yahoo’s 
Merchant Solutions
„ Site building tools

„ E‐commerce templates

™Open‐source merchant server software
„ Enables you to build truly custom site

„ Requires programmer with expertise, time

Copyright © 2010 Pearson Education, Inc. Slide 4-30

 Choosing the Hardware for an
E-commerce Site
„ Hardware platform: 
™ Underlying computing equipment that system uses to 
achieve e‐commerce functionality

„ Objective:
™ Enough platform capacity to meet peak demand without 
wasting money

„ Important to understand the different factors that 
affect speed, capacity, and scalability of a site
Copyright © 2010 Pearson Education, Inc. Slide 4-31
 Right-Sizing Your Hardware
Platform: The Demand Side
„ Demand is the most important factor affecting speed 
of site
„ Factors in overall demand:
™ Number of simultaneous users in peak periods
™ Nature of customer requests (user profile)
™ Type of content (dynamic versus static Web pages)
™ Required security
™ Number of items in inventory
™ Number of page requests
™ Speed of legacy applications

Copyright © 2010 Pearson Education, Inc. Slide 4-32

Table 4.7, Page 232
Copyright © 2010 Pearson Education, Inc. Slide 4-33
 Degradation in Performance as
Number of Users Increases—Resource Utilization

Figure 4.11 (a), Page 234
Copyright © 2010 Pearson Education, Inc. Slide 4-34
 Degradation in Performance as
Number of Users Increases—Number of
Connections

Figure 4.11 (b), Page 234
Copyright © 2010 Pearson Education, Inc. Slide 4-35
The Relationship of Bandwidth to Hits

SOURCE: IBM, 2003.

Figure 4.13, Page 236
Copyright © 2010 Pearson Education, Inc. Slide 4-36
 Right-Sizing Your Hardware
Platform: The Supply Side
„ Scalability: 
™ Ability of site to increase in size as demand 
warrants
„ Ways to scale hardware:
™ Vertically
„ Increase processing power of individual components
™ Horizontally
„ Employ multiple computers to share workload
™ Improve processing architecture

Copyright © 2010 Pearson Education, Inc. Slide 4-37

Table 4.8, Page 236
Copyright © 2010 Pearson Education, Inc. Slide 4-38
 Vertically Scaling a System

Figure 4.14, Page 237
Copyright © 2010 Pearson Education, Inc. Slide 4-39
 Horizontally Scaling a System

Figure 4.15, Page 238
Copyright © 2010 Pearson Education, Inc. Slide 4-40
Table 4.9, Page 239
Copyright © 2010 Pearson Education, Inc. Slide 4-41
 Other E-Commerce Site Tools

„ Web site design: Basic business considerations
™ Enabling customers to find and buy what they 
need
„ Tools for Web site optimization
™ Search engine placement
„ Keywords, page titles
„ Identify market niches, localize site
„ Expertise
„ Links
„ Search engine ads

Copyright © 2010 Pearson Education, Inc. Slide 4-42

E-commerce
Web Site
Features
that Annoy
Customers

SOURCE: Based on data from

Hostway Corporation’s survey,
Consumers’ Pet Peeves about
Commercial Web Sites, Hostway
Corporation, 2007.

Figure 4.16, Page 240
Copyright © 2010 Pearson Education, Inc. Slide 4-43
Table 4.10, Page 241
Copyright © 2010 Pearson Education, Inc. Slide 4-44
 Tools for Interactivity and
Active Content
„ Web 2.0 design elements: Widgets, Mashups
„ CGI (Common Gateway Interface)
„ ASP (Active Server Pages)
„ Java, JSP, and Javascript
„ ActiveX and VBScript
„ Coldfusion

Copyright © 2010 Pearson Education, Inc. Slide 4-45

 Insight on Technology
Pumping Up the Customer Experience
Using AJAX and Flash
Class Discussion

„ What is AJAX?  How does it work?

„ How does AJAX improve on client/server 
interactivity?
„ How does Google Maps use AJAX?

„ What are some alternative technologies 
to achieve the same results as AJAX?
Copyright © 2010 Pearson Education, Inc. Slide 4-46
 Personalization Tools
„ Personalization
™ Ability to treat people based on personal qualities 
and prior history with site

„ Customization
™ Ability to change the product to better fit the 
needs of the customer

„ Tools to achieve: 
™ Cookies

Copyright © 2010 Pearson Education, Inc. Slide 4-47

 The Information Policy Set
„ Privacy policy
™ Set of public statements declaring how site will 
treat customers’ personal information that is 
gathered by site

„ Accessibility rules
™ Set of design objectives that ensure disabled users 
can affectively access site

Copyright © 2010 Pearson Education, Inc. Slide 4-48

 Insight on Society
Designing for Accessibility with Web 2.0
Class Discussion

„ What is Section 508 of the Rehabilitation Act?
„ Why might some merchants be reluctant to 
make their Web sites accessible to disabled 
Americans?
„ How can Web sites be made more accessible?
„ Should all Web sites be required by law to 
provide “equivalent alternatives” for visual 
and sound content?
Copyright © 2010 Pearson Education, Inc. Slide 4-49
 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, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.

Copyright © 2010 Pearson Education, Inc.

Publishing as Prentice Hall

Copyright © 2010 Pearson Education, Inc. Slide 4-50