What is management information system in accounting?

An accounting information system (AIS) is a structure that a business uses to collect,

store, manage, process, retrieve and report its financial data so that it can be used by
accountants, consultants, business analysts, managers, chief financial officers
(CFOs), auditors, regulators and tax agencies.Feb 21, 2018

Why accounting is considered as information system?

An accounting information system is generally a computer-based method for tracking
accounting activity in conjunction with information technology resources. The
resulting financial reports can be used internally by management or externally by other
interested parties including investors, creditors and tax authorities.

AIS uses financial data, but MIS uses non-financial data besides the financial data. The aim of
both systems is to provide information to improve decision making and increase the
effectiveness and efficiency. Management accounting provides information directly to MIS
and indirectly to other external users.

What is MIS?
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 Difference between MIS & CS

 Traits of MIS professionals
 MIS graduate jobs
 Why take courses/ major in MIS?
 How long will MIS jobs be around?

The Study of People, Technology, and Organizations

Management Information Systems (MIS) is the study of people, technology, and organizations.

If you enjoy technology like iPhones, iPods, and Facebook, you have what it takes to major in
information systems. All you need is an interest in technology and the desire to use technology
to improve people's lives. Many people think that MIS is all programming. However,
programming is just a small part of our curriculum and there are many, many jobs in MIS where
you do not program.
Everyone who works in business, from someone who pays the bills to the person who hires and
fires, uses information systems. For example, a supermarket could use a computer database to
keep track of which products sell best. And a music store could use a database to sell CDs over
the Internet.

Information isn’t worth much if it doesn’t serve a purpose. MIS students learn how businesses
use information to improve the company’s operations. Students also learn how to manage
various information systems so that they best serve the needs of managers, staff and
customers. MIS students learn how to create systems for finding and storing data and they learn
about computer databases, networks, computer security, and lots more.

Below are some common questions to help you find out more about management information
systems.

What’s the difference between MIS and CS (computer science)?

It is useful to compare MIS to some of the other fields related to information technology. Here
at The University of Arizona there are at least three computer related departments and programs.
The table below will help to show the differences.

ECE (Electrical
MIS (Management
CS (Computer Science) Computer
Information Systems)
Engineering)

Focus Organization Software Product

Objective More efficient or effective Reliable computer Improved engineer

business program product

Core Skill Problem solving Logic/Procedure Engineering

Core Task Determine business Deliver information Determine information

requirements for systems to meet defined processing
information systems requirements requirements for
device

Theoretical Balanced Applied Balanced

vs. Applied

Generic Job Analyst/Designer Builder Architect and Builder

Title
 Typical Business Systems Analyst Application Programmer Engineer
Starting Job
Title

Career Goals Senior Organizational Programming Manager Senior Engineer or

Manager Product Manager

College Home Business Science Engineering

All of these are great majors, however MIS is the ONLY major that focuses on both business
processes and information technology. If you are interested in business and technology, like
theory but not too much, like technology enough to want to keep up with what's hot but don't
want to be writing programs or putting together chips all your life, then MIS is for you. We
believe that the most upwardly mobile career path for those who like to work with business and
technology is definitely in MIS.

Traits of MIS Professionals

There are a lot of different profiles, but there are some traits we've found make great MIS
professionals. Do these describe you? If so, then our MIS programs are for you!

 Are good problem solvers

 Like to work with people
 Can think strategically about technology
 Like responsibility for developing and then implementing their ideas
 Can bridge both technology and business
 Can see both details and the big picture
 Are excellent communicators
 Can manage time and resources well

What jobs do MIS graduates go into?

As you can probably already tell, MIS is an integrative field. MIS professionals are the
"communication bridge" between business needs and technology. This means that you will have
to understand how to figure out how things work, solve problems, find things out, communicate
what you found, and learn a lot of new things on a regular basis. It's a dynamic field, and it takes
dynamic people to do well in it. People who can think fast, work hard, and balance a lot of things
should really think about MIS. Here's only a sample of the kinds of MIS jobs.
• Business Analyst
• Business Application Developer
• IT Consultant
• Systems Analyst
• IT Development Project Leader
• Database Administrator
• Business Intelligence Analyst
• Systems Developer
• Database Analyst
• Web Developer
• Network Administrator
• Technical Support Specialist
• Information Systems Manager
• IT User Liaison

Why should I take courses or major in MIS?

The development of new information retrieval methods, as well as the improvement of existing
ones, is currently one of the hottest frontiers in the field of information science.

The number of reasons for taking courses in and/or majoring in MIS at the Eller College of
Management is as vast and varied as the number of individuals who have chosen to do so. The
more important reasons are:

High Placement Rate Information systems are more strategically important now than ever
and individuals who understand information systems and business are in
high demand. Our MIS students have a placement rate of 95% within
two months of graduation!

High Salaries Top MIS graduates command very competitive salaries. The average total
compensation for IT jobs is around $120,640 (Bureau of Labor Statistics,
Occupational Outlook Handbook, 2012-2013 Edition)

Job Satisfaction Management Information Systems professionals make a significant contribution

to the competitiveness and well-being of the organizations in which they
work. They also help people and interact with a variety of personalities and
levels of management/staff.
 Fun MIS majors are intelligent and dynamic people who can interface well
with both humans and machines. They enjoy working with people and are
able to communicate well.

Challenge The rapid rate of change in the information systems world

provides professionals with constant opportunities to learn and grow.

How long will MIS jobs be around?

As per the U.S. Bureau of Labor Statistics Occupational Outlook Handbook (OOH) employment
of computer and information occupations are projected to grow by 22 percent, adding 758,000
new jobs from 2010 to 2020.

Demand for workers in these occupations will be driven by the continuing need for businesses,
government agencies, and other organizations to adopt and utilize the latest technologies.
Workers in these occupations will be needed to develop software, increase cybersecurity, and
update existing network infrastructure.

MIS is an Effective Tool to Decision Making

Management Information System (MIS) has played an important role in the organization from last two
decades by providing the information generation tool. It also helps the top management in decision
making in crucial business decisions. Businesses in the developed countries are of dynamic nature
and it has to get the information from all sources with minimum time and with most proper way having
maximum good characteristics of information. The Indian business scenario is also changing at a very
fast rate in all the aspects and in all the areas, using advanced software tools like MIS, DSS and Expert
System. MIS provides regular information to managers to allow them to make decisions based on data
rather than guesses. Certain data and analysis can play a very useful role in making good decisions
about where and when to use human and other resources to achieve the mission of an organization.
Managers with quality MIS are able to make decisions from an informed stance rather than a
haphazard one. This paper is an attempt to design and develop an MIS for the business organization
and show how it helps in taking management decisions related to management function especially for
the top management.

Business Application (MIS)

1. 1. MANAGEMENT INFORMATION SYSTEM
2. 2.  Business application or business software is any software or set of computer programs that are used by
business users to perform various business functions.  Business application are used to increase
productivity, to measure productivity and to perform business functions accurately.  These are categorized
 as small, medium and large.  The small business market consists of home accounting software and office
suites such as Microsoft office.
3. 3.  The medium size, or small and medium- sized enterprise(SME), has a broader range of software
applications, ranging from accounting, groupware, customer relationship management, human resource
management systems, outsourcing relationship management, Shopping cart software and other productivity
enhancing applications.  The large size covers enterprise level software applications, such as those in the
field of enterprise resource planning, enterprise content management, business process management and
product lifecycle management.
4. 4.  Electronic business is the administration of conducting business via internet. It is application of
Information and communication technologies in support of all the activities of business.  It is use of
internet and other networks and information technologies to support e-commerce, enterprise
communication and collaboration and web enabled business process, both within a networked enterprise
and with its customer and business partners.  E-business includes E-commerce, which includes buying,
selling and marketing products over the internet.
5. 5.  Many companies today are using information technologies to develop integrated cross functional
enterprise systems that cross the boundaries of traditional business functions in order to reengineer and
improve vital business process, and develop strategic relationship with customers, suppliers, and business
partners.  This typically involves installing enterprise resource planning, supply chain management, or
customer relationship management software.  Business firms are using internet technologies to help them
reengineer and integrate the flow of information among their internal business process and their customers
and suppliers.
6. 6.  The enterprise application architecture of a business is a description of the structured of the application
and software use across the organization.  The system are broken down into subsystem and connected to
each other based on the relationship between them.  It provides a conceptual framework to help visualize
the basic components, processes, and interfaces of these major e- business applications, and their
interrelationship to each other.  It includes CRM, ERP, SCM and KM.
7. 7.  It is the process of linking such applications within a single organization together in order to simplify
and automate business process to the greatest extent possible, while at the same time avoiding having to
make full changes to the existing application or data structures.  Unrestricted sharing of data and business
processes among any connected application or data sources in the enterprise.  EAI software being used by
many companies to connect their major e- business applications.
8. 8.  EAI software can integrate the front office and back office applications of a business so they work
together in a seamless, integrated way.  This is a vital capability that provides real business value to
business enterprise events and customer demand.  E.g. Improvement in customer call center
responsiveness and effectiveness because EAI integrates access to the entire customer and product data
customer representative need to quickly serve customer.
9. 9.  EAI can be used for different purpose:  Data Integration: ensures that information in multiple
systems are kept consistent.  Vendor independence: Extracts business policies or rules from applications
 and implements them in EAI systems, so that even if one of the business applications is replaced with a
different vendor’s application, the business rules don’t have to be re- implemented.  Common interface:
An EAI system can front-end cluster of applications, providing a single consistent access interface to these
applications and shielding users from having to learn to use different software packages.
10. 10.  Transaction Processing System are cross- functional information systems that process data resulting
the occurrence of business transactions.  Transaction are the events that occurs as part of doing business,
such as sales, purchases, deposits, withdrawals, refunds, and payments.  Data about the customer, product,
salesperson, store and so on must be captured and processed. Credit checks, customer billing, inventory
changes, and increase In accounts recievable balances generate even more data.  Transaction processing
activities are needed to capture and process such data, or the operation of business would halt.
11. 11.  Transaction processing is of several basic activities.  Data Entry:The first step of transaction
processing cycle is the capture of business data.Transaction data may be collected by POS terminals and
also captured at an e- commerce web site and internet.  The proper recording and editing of data so they
are quickly and correctly captured for processing is one of the major challenges of information systems.
12. 12.  Transaction Processing:  Transaction processing system processes data in two basic ways: one is
batch processing, where transaction data are accumulated over a period of time and processed periodically,
second is real time processing where data is processed immediately after transaction occurs.  Database
Maintenance: An organization’s databases must be updated by its transaction processing systems so that
they are always correct and up to date. Databases maintenance ensures that the changes are reflected in the
data records stored in company’s databases.
13. 13.  Document and report generation:  Transaction processing systems produce a variety of documents
and reports. purchase orders, paychecks, sales receipt, invoices and customer statements are examples of
transaction documents. Payroll register, edit reports are the form of transaction reports.  Inquiry
Processing:  Many transaction processing system allow user to use the internet, intranets, extranets and
web browser or database management query language to make inquiries and receive responses. For e.g.
checking the status of sales order, balance in the account, amount of stock in inventory.
14. 14.  Enterprise collaboration systems (ECS) are cross functional information systems that enhance
communication, coordination, and collaboration among the members of business teams and workgroups. 
The Goal of enterprise collaboration is to enable us to work together more easily and effectively by helping
to Communicate, Coordinate and Collaborate.
15. 15.  The capabilities and potential of the internet, as well as extranets, are driving the demand for better
enterprise Collaboration tools in business.  The enterprise collaboration tools are:  Electronic
communication tools: E-Mail, Instant messaging, voice mail, faxing, web publishing, paging.  Enterprise
Collaboration Systems: Data Conferencing,Video Conferencing,Voice Conferencing, Discussion forums,
Chat systems, Electronic Meeting Systems.
16. 16.  Calendar and Scheduling,Task and project management, workflow systems, Document Sharing,
Knowledge Management.
17. 17.  There are many ways to use information technology in business as there are business activities to be
performed, business problems to be solved, and business opportunities to be pursued.  It is important to
have a specific understanding of how information system affect a particular business function or particular
industry.  E.g someone whose career objective is marketing in banking should have a basic understanding
of how information system are used in banks and how they support the marketing activities of banks and
firms.
18. 18.  The business function of marketing is concerned with planning, promotion and sales of existing
products in existing markets, and development of new products and new markets to better attract and serve
present and potential customer.  Business firms have increasingly turned to information technology to
help them perform vital marketing functions in the face of the rapid changes of today’s environment.  For
e.g. Internet/ intranet web sites makes interactive marketing process possible where customer can become
partners in creating marketing, purchasing and improving products and services.
19. 19.  Marketing information system assists marketing managers in product planning, pricing, and other
product management decisions; advertising sales, promotion, and targeted marketing strategies and market
research and forecast.  Some of the marketing applications are:
20. 20.  A customer focused marketing process that is based on using the internet, Intranets, and extranets to
establish two- way transaction between a business and its customer or potential customers.  Interactive
marketing encourages customers to become involved in product development, delivery and service issues.
It is enabled by various internet technologies, including chat, discussion groups, web forums, instant
messaging and email correspondence.  The expected outcomes of interactive marketing are the rich
mixture of vital marketing data, new product ideas, volume sales and strong customer relationship.
21. 21.  Targeted marketing has become an important tool in developing advertising and promotion strategies
to strengthen a company’s e- commerce initiatives, as well as traditional business venues. It includes five
targeting components:  Community  Content  Context  Demographic/ Psychographic  Online
Behaviour
22. 22.  Computers and the internets are providing the basis for sales force automation.  IN many companies
sales force are being outfitted with notebook computer, web browser and sales contact management
software that connects them to marketing.  It increases the personal productivity of sales person as well as
speeds up the capture data from the field to marketing managers at company headquarters.  Many
companies are viewing sales force automation as a way to gain a strategic advantage in sales productivity
and marketing responsiveness.
23. 23.  Manufacturing information system supports the production/operation function that includes all
activities concerned with the planning and production of goods or services.  Information systems used for
operations management and transaction processing supports all firms that must plan, monitor and control
inventories, purchases and the flow of goods and services.
24. 24.  CIM is an overall concept that emphasize that the objectives of computer-based systems in
manufacturing must be to:  Simplify (reengineer) production processes, product designs, and factory
organization as a vital foundation to automate and integration.  Automate production processes and the
 business functions that support them with computers, machines and robots.  Integrate all production and
support processes using computer networks, cross functional business software and other information
technologies.
25. 25.  The overall aim of CIM and such manufacturing information systems is to create flexible, agile
manufacturing processes that efficiently produce product of highest quality.  Computers are used to help
engineers design better products using both computer-aided engineering (CAE) and computer aided design
(CAD) systems, and better production processes with computer aided process planning.
26. 26.  Those system that automates the production process. E.g. monitoring and controlling the production
process in a factory or by directly controlling the a physical process, a machine tool or machine with some
human like capabilities.
27. 27.  Performance monitoring information systems for factory floor operations.  They monitor and
control the five essential components involved in a production process: materials, equipment, personnel,
instructions and specifications, and production facilities.  MES includes shop floor scheduling and
control, machine control, robotis control and process control system.
28. 28.  Use of computer to control an ongoing physical process. Process control computer control physical
processes in petroleum refineries, cement plants, steel mills, chemical plants, food product manufacturing
plants and so on.  The continuous physical measurement are converted to digital form by analog- to-
digital converters and relayed to computer for processing.
29. 29.  Use of computers to control the actions of machines.This is also popularly called numerical control.
 The computer based control of machine tools to manufacture products of all kinds is typical numerical
control application used by many factories throughout the world.
30. 30.  The Human Resource Management function involves the recruitment, placement, evaluation,
compensation , and development of the employees of an organization.  The human resource information
system are designed to support  Planning to meet the personnel needs of the business  Development of
the employees to their full potential  Control of all personnel policies and programs
31. 31.  The internet has become a major force to change in human resource management. E.g. online HRM
system may involve recruiting for employees through recruiting for employees through recruitment
sections of corporate web sites.  The web sites are full of reports, statistics, and other useful HRM
information such as job reports by industry, or listings of the top recruiting markets by industry and
professionals.
32. 32.  HRM and corporate intranet technologies allow companies to process most common HRM
applications over their corporate intranets.  Intranets can collect information online from employees for
input to their HRM files, and they can enable managers and other employees to perform HRM task with
little intervention by HRM department.  E.g. Employee self- service (ESS) intranet application allows
employees to view benefits, enter travel expense reports, verify employment and salary information, access
and update their personal personal information, and enter time- sensitive data.
33. 33.  Accounting information systems are the oldest and most widely used information systems in business
and records business transaction and other economic events.  Computer based accounting systems record
 and report the flow of funds through an organization on a historical basis and produce important financial
statements such as balance sheets and income statements.  Many accounting software packages are
available for these applications:
34. 34.  Using the internet and other networks changes how accounting information system monitors and
track business activity.  Online accounting system particularly applies to systems like order processing,
inventory control, accounts receivable, and account payable.  These system are directly involved for
processing of transaction between a business and its customers and suppliers.  Naturally, many companies
are using internet and other network links to these trading partners for such OnlineTPS.
35. 35.  It is a system that every organization has maintained day to day to know and run the organization
smoothly. It is summarized as:  Order Processing: Captures and processes customer orders and produce
data for inventory control and accounts receivable.  Inventory control: processes data reflecting changes
in inventory and provide shipping and reorder information.  Accounts Receivable: Records amounts owed
by customers and produce customer invoices, monthly customer statements, and credit management
reports.
36. 36.  Accounts payable: records purchases from, amounts owed to and payments to suppliers and produce
cash management reports.  Payroll: Records employee work and compensation data and produce
paychecks and other payroll documents and reports.  General Ledger: Consolidates data from other
accounting systems and produce the periodic financial statements and reports of the business.
37. 37.  Computer based financial management system supports business managers and professionals in
decision concerning the financing of a business and allocation and control of financial resources within a
business.  Major financial management systems includes cash and investment management, capital
budgeting, financial forecasting, and financial planning.  Financial analyst typically use electronic
spreadsheets and other financial planning software to evaluate the present and projected financial
performance of a business.
38. 38.  Customer focused business is one of the top business strategies that can be supported by information
technology.  Many companies are implementing customer relationship management (CRM) business
initiatives and information systems as part of customer focused or customer centric strategy to improve
their chances for success in today’s competitive business environment.  CRM uses information
technology to create a cross functional enterprise system that integrates and automates many of the
customer serving processes in sales, marketing and customer service that interact with a company’s
customers.
39. 39.  CRM system includes a family f software modules that provides tools that enables a business and its
employees to deliver fast, convenient, dependable and consistent service to its customers.  Siebel systems,
Oracle, peoplesoft, SAP are some of the leading vendors of CRM software.  Some major application
components of a CRM system are:
40. 40.  CRM software helps sales, marketing, and service professionals capture and track relevant data about
every past and planned contact with prospects and customers, as well as other business and life cycle events
of customers.  Information is captured from all customers touch points, such as telephone, fax, email, the
 company’s website, retail stores, kiosks, and personal contact and stores the data in a common customer
database.
41. 41.  A CRM provides sales representative with the software tools and company data sources they need to
support and manage their sales activities and optimize cross- selling and up-selling.  CRM also provides
real time access to a single common view of the customer, enabling sales representative to check on all
aspects of a customer’s account status and history before scheduling their sales cost.
42. 42.  CRM system help marketing professionals accomplish direct marketing campaigns by automating
such task as qualifying leads for targeted marketing and scheduling and tracking direct marketing mailings.
 CRM software helps marketing professionals capture and manage prospect and customer response data in
the CRM database, and analyzes the customer’s and business value of company’s direct marketing
campaigns.
43. 43.  A CRM system provides service with software tools and real- time access to common customer
database shared by sales and marketing professionals.  CRM helps customer service mangers create,
assign and mange request for service by customer.
44. 44.  Enhancing and optimizing customer retention and loyalty is a major business strategy and primary
objective of customer relationship management.  CRM system helps a company identify, reward and
market to their most profitable and loyal customer.
45. 45.  CRM can be viewed as an integrated system of web-enabled software tools and databases
accomplishing a variety of customer focused business processes that support the three phases of
relationship between business and its customers.  ACQUIRE:A business relies on CRM software tools
and databases to help it acquire new customers by doing a superior job of contract management, sales
prospecting, selling, direct marketing and fulfillment.  ENHANCE: CRM sales force automation and
direct marketing and fulfilment tools help companies cross sell and up sell to their customer, thus
increasing the profitability to the business.
46. 46.  RETAIN: CRM analytical software and database help a company proactively identify and reward its
most loyal and profitable customer to retain and expand their business via targeted marketing and
relationship marketing programs.
47. 47.  The potential benefits of CRM are:  CRM allows a business to identify and target its best customers
 It makes possible real- time customization and personalization of products and services based on
customer needs, buying habits, and life cycles.  CRM system can enable a company to provide a
consistent customer experience and superior service and support across all the contact points a customer
choose.
48. 48.  The business benefits of CRM are not guaranteed and instead have proven elusive at many
companies.The common reasons are:  Lack of senior management sponsorship  Improper chain
management  Elongated projects that take on too much, too fast  Lack of or poor integration between
CRM and core business systems  Lack of end- user incentives leading to poor user adoption rates
49. 49.  Increasingly enterprise must create tighter collaborative linkages with partners, suppliers, and
customer, squeezing out time and cost while enhancing the customer experience and total value
 proposition.  Most of the organization implements the four types of CRM, they are Operational,
analytical, Collaborative and portal- based.
50. 50.  Business of all kinds have now implemented enterprise resource planning(ERP) systems.  ERP
serves as a cross functional enterprise backbone that integrates and automates many internal business
processes and information systems within the manufacturing logistics, distribution, accounting, finance,
and human resource functions of a company.  ERP is a technology backbone of e-business and is a cross
functional enterprise system driven by integrated suite of software modules that support the basic internal
processes of a company.
51. 51.  ERP systems can generate significant business benefits for a company.  Quality and efficiency: 
Decreased cost  Decision support  Enterprise agility:
52. 52.  Underestimation of the complexity of the planning, development, and training  Failure to involve
affected employees in the planning and development phases  Insufficient training in new work task 
Over relying of company and it management on the claims of ERP software vendors.
53. 53.  Today, ERP is still evolving- adapting to developments in technology and the demands of the market.
 Four major trends are shaping ERP’s continuing evolution:  Improvement on integration and flexibility
 Extension to e-business applications  A broader reach to new users  And the adoption of internet
technologies
54. 54.  Starting a e- business takes ideas, capital, and technical savvy. Operating one however takes SCM
skills.  A successful SCM strategy is based on accurate order processing, just in time inventory
management, and timely order fulfillment.  Many companies today are making supply chain management
a top strategic objective and major e-business application development initiative.  Supply chain
management helps companies get the right products to the right place at the right time, in the proper
quantity and acceptable cost.
55. 55.  The goal of SCM is to manage this process efficiently by forecasting demand, controlling inventory,
enhancing the network of business relationship a company have with customers, suppliers, distributors and
others.  To achieve this goal many companies today are turning to Internet technologies to web- enable
their supply chain processes, decision making, and information flows.
56. 56.  Electronic data interchange was one of the earliest uses of information technology for SCM.  EDI
involved the electronic exchange of business transaction documents over internet and other network
between supply chain trading partners.  EDI software’s is used to convert a company’s own document
format into standardized EDI formats as specified by various industry and international protocol.  EDI is
an example of almost complete automation of an e- commerce supply chain process.
57. 57.  The role of information technology in SCM is to support planning, execution objectives with
enterprise information systems that produce many of the outcomes a business needs to manage its supply
chain effectively.  Due to the reason many companies today are installing SCM software and developing
web based SCM information systems.
58. 58.  Creating a real time SCM infrastructure is a discouraging and ongoing issue and often a point of
failure for several reasons.  SCM can provide companies with key business benefits such as faster, more
 accurate order processing, reductions in inventory level, quicker times to market, lower transaction and
material cost and strategic relationship with the suppliers.  However, developing effective systems has
proven to be complex and difficult application of information technology to business operations.
59. 59.  The trends in use of SCM today as three possible stages in implementation of SCM System.  In first
stage the company concentrates on making improvement to its internal supply chain process and its
external process and relationship with suppliers and customers.  In the stage two, a company accomplish
substantial supply chain management applications by using selected SCM software programs internally, as
well as externally via intranet and extranet links among suppliers, distributors, customers and other trading
partners.  In the third stage, a company beings to develop and implement cutting- edge collaborative
supply chain management applications using advanced SCM software, full service extranet links, and
private and public e-commerce exchanges.
60. 60.  Electronic commerce, commonly known as e- commerce consists of the buying and selling of
products and services over electronic systems such as the Internet and other computer networks.  For most
companies today E- commerce is more than just buying and selling products online.  It encompasses the
entire online process of developing , marketing, selling, delivering, servicing, and paying for products and
services transacted on inter- networked, global marketplaces of customer, with the support of a worldwide
network of business partners.
61. 61.  The range of business processes involved in marketing, buying, selling and servicing of products and
services in companies that engage e-commerce.  Companies involved in e- commerce as either buyer or
sellers rely on Internet based technologies and e-commerce applications and services to accomplish
marketing, discovery, transaction processing, and product and customer service processes.
62. 62.  Many companies today are participating in or sponsoring four basic categories of e-commerce
applications: Business-to-consumer (B2C) e- commerce: Business develop attractive electronic
marketplaces to sell products and services to customer.  Consumer-to-Consumer (C2C) e-commerce:The
huge success of online auctions like e-bay, where consumer can buy from and sell to another in an auction
process at an auction web site, makes this model an important e-commerce strategy.
63. 63.  Business-to-Business (B2B) e-commerce:This category of e- commerce involves both e-business
marketplace and direct market links between businesses.
64. 64.  There are nine key components of e-commerce processes architecture that is the foundation of the e-
commerce initiatives of many companies today.
65. 65.  E- commerce must establish mutual trust and secure access between the parties in an e- commerce
transaction by authenticating users, authorizing access, and enforcing security features.  Security process
protect the resources of e- commerce sites from threats such as hacker attacks, theft of passwords or credit
card numbers, and system failures.
66. 66.  Once gained access to an e-commerce site, profiling processes can occur that gather data on you and
your web sit behavior and choices, as well as build electronic profiles your characteristics and preferences.
 These profiles are used to recognize you as an individual user and provide you with a personalized view
of the contents of the site, as well as product recommendations.
67. 67.  Efficient and effective search processes provide a top e- commerce web site capability that helps
customers find the specific product or service they want to evaluate or buy.  E-commerce software
packages can include a web site search engine components, or a company may acquire a customized e-
commerce search engine from search technology companies like google.
68. 68.  content management software helps e-commerce companies develop, generate, deliver, and archive
text data and multimedia information at e-commerce web sites.  E- commerce contents frequently take the
form of multimedia catalogs of product information.
69. 69.  Many of the business in e-commerce applications can be managed and partially automated with the
help of workflow management software.  Workflow management in both e- business and e- commerce
depends on the workflow search engine containing software models of the business process to be
accomplished.  Workflow system ensures the that the proper transactions, decisions, and work activities
are performed, and the correct data and documents are routed to right employees, customers, suppliers, and
other business stakeholders.
70. 70.  Most e- commerce applications are event driven systems that responds to a multitude of events- from
a new customer’s first website access, to payment and delivery processes, to innumerable customer
relationship and supply chain management.  Customers, suppliers, employees and other stakeholders must
be notified of all events that might affect their status in a transaction.  Event notification software works
with the workflow management software to monitor all e-commerce processes and record all relevant
events, including unexpected changes or problem situatuions.
71. 71.  Vital collaboration arrangements and trading services needed by customers, suppliers, and other
stakeholders to accomplish e- commerce transactions.  Customer focused e- business uses tools such ae e-
mail, chat systems and discussion groups to nurture online communities of interest among employees and
customers to enhance customer service and build customer loyalty in e- commerce.
72. 72.  Payment for the products and services purchased is an obvious and vital set of processes in e-
commerce transaction.  E-commerce payment processes are also complex because of the wide variety of
debit and credit card alternatives, as well as the financial institutions and intermediaries that may be a part
of the process.  Therefore the variety of electronic payment systems have evolved over time.
73. 73.  Most e-commerce systems on the web involving business and consumers (B2C) depends on credit
card payment processes, but many B2B e-commerce systems rely on more complex payment processes
based on the use of purchase orders.  E- commerce typically use an electronic shopping cart process,
which enables customers to select products from website catalog displays and put them temporarily in a
virtual shopping basket for later checkout and processing.
74. 74.  Electronic fund transfer systems are a major form of electronic payment systems in banking and
retailing industries.  EFT uses variety of technologies to capture and process money and credit transfer
between banks and business and their customers.  Eg. ATM, PAYPAL, Internet bill payment
75. 75.  Online purchase on the internet, makes credit card information vulnerable to interception by network
sniffers.  Several basic security measures are being used to solve this security problem. 1. Encrypt the
data passing between customer and merchant 2. Encrypt the data passing between the customer and the
company authorizing the credit card transaction 3. Take sensitive information offline.