12.4 E-Commerce

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12.4 E-Commerce

Computer applications in the realm of electronic commerce, or e-commerce, deal with financial transactions made through the Web. It includes all aspects of the marketing, sales, and buying of both products and services as well as other financial services such as banking transactions. These days, the Web is often the first option for people considering a purchase.

When the Web burst into public view in 1994, many people predicted that it would have a large impact on the way we do business. In fact, it took several years for e-commerce to begin to be trusted enough, and become functional enough, to take root in our culture. The dotcom collapse of 2001, instead of diminishing e-commerce, seemed to promote it by clearing the way for organizations with legitimate business models to make a place for themselves online. During this period, in addition to new, purely online businesses cropping up, traditional “brick-and-mortar” businesses developed a significant online presence.

Amazon.com, one of the oldest e-commerce sites on the Web, did not make a profit for many years. But by persevering through (sometimes painful) growth spurts, it emerged as a premiere e-commerce destination for shoppers. eBay, a popular auction site, allowed anyone to sell their products online, even without an underlying formal business; today, many retailers conduct their transactions purely through the eBay environment. Companies such as PayPal, which make the process of online purchases much easier by abstracting the buyer’s financial details, were also key to e-commerce success. In fact, eBay purchased PayPal in 2002; like many online sites, eBay uses PayPal exclusively as its electronic payment system.

The evolution of web-based technologies was a major factor in the success of e-commerce and the driving force behind some of it. The ability for an online application to provide enhanced user interaction was critical in this growth, as was the development of secure protocols and other factors that permit the secure transfer of electronic funds.

Electronic shopping carts are a key part of the e-commerce process, allowing users to maintain an ongoing collection of items and purchase those items in a single transaction. Many e-commerce sites track a user’s purchases and make suggestions for other items that a user might find interesting. This is an aspect of e-commerce that is not easily replicated with traditional store purchases.

Another important aspect to the success of e-commerce is the evolution of sellers’ understanding of how shoppers shop. That is, the best e-commerce sites now have facilities that allow a user to search for and compare items in various ways. Again, these functional aspects often surpass the user’s experience when visiting a physical store.

One of the biggest challenges that remains for e-commerce is the need to ensure security in the financial transactions inherent in the process. Many people still have strong misgivings about conducting business online, but trust in online transactions has grown rapidly. Indeed, the need for computer security is greater than ever.

12.5 Big Data

The information systems discussed in this chapter can deal with a lot of data, but the digital age has changed the playing field in many ways. We generate data with almost every action we take. When we buy something online, when we post on social media, when we carry our phones with GPS tracking capabilities, we leave a digital trail. Experts suggest that every two days, human beings collectively generate as much data as we did from the beginning of time until the year 2000.

This situation has given rise to the term big data, which refers to data sets that are so large and complex that information systems we’ve discussed so far such as spreadsheets and databases are inadequate to deal with them. The specifics of big data techniques are beyond the scope of this book, but it’s crucial to understand big data’s growing importance.

Big data can lead to big insight. The more you know about something, the better you can manage and guide it as desired. Big data techniques allow us to compare more data, revealing relationships that were previously hidden.

The benefits of big data are numerous to commercial businesses. The additional insights can reveal what customers want to buy, and when, and can help companies run more efficiently. In the future, businesses that adopt a data-driven outlook and view data as a strategic asset will have a distinct advantage over those that don’t.

Big data is also having a big impact beyond traditional business models. Healthcare organizations are using big data solutions to analyze vast numbers of medical records and images, which helps diagnose diseases and develop new medicines. Huge amounts of sensor data are being used to predict and respond to natural disasters. Police forces are using both public and private data sets to predict and prevent crime.

But that new insight comes at a price. There are many challenges when it comes to big data:

Large data sets often contain different kinds of data—not just basic numeric data, text, and images, but also multimedia elements such as audio, video, and animations.
Storing large amounts of data requires massive amounts of secondary memory.
Selecting and organizing that data so it can be analyzed and turned into meaningful information requires significant processing power.
Protecting big data, which often contain sensitive personal information, requires careful technological and logistical planning.

An information system that is set up to handle big data must be able to scale quickly and adequately; that is, as new data arrives, the techniques used by the information system must be able to handle the load. If an information system cannot scale sufficiently, it will restrict how the data can be used, if not grind to a halt.

Therefore, the ability to handle big data requires careful planning and specific computational solutions. It often involves an automated process that creates simulations based on the data and rerunning those simulations until patterns emerge.

It is likely that spreadsheets and databases will always play an important role in computing. Not all problems require a big data solution. However, it is crucial to understand the ever-increasing role that big data plays in the future of computing.

SUMMARY

An information system is application software that allows the user to organize and manage data. General information system software includes spreadsheets and database management systems. Other domain areas, such as artificial intelligence, have their own specific techniques and support for data management.

A spreadsheet is a software application that sets up a grid of cells to organize data and the formulas used to compute new values. Cells are referenced by their row and column designations, such as A5 or B7. Formulas usually refer to the values in other cells and may rely on built-in functions to compute their result. In addition, formulas may use data across a range of cells. When a formula is stored in a spreadsheet cell, the value computed by the formula is actually shown in the cell. It is important that formulas in a spreadsheet avoid circular references, in which two or more cells rely on one another to compute their results.

Spreadsheets are both versatile and extensible. They can be used in many different situations, and they respond dynamically to change. As values in the spreadsheet change, affected formulas are automatically recalculated to produce updated results. If spreadsheet rows or columns are added, the ranges in spreadsheet formulas are adjusted immediately. Spreadsheets are particularly appropriate for what-if analysis, in which assumptions are modified to see their effect on the rest of the system.

A database management system includes the physical files in which the data are stored, the software that supports access to and modification of that data, and the database schema that specifies the logical layout of the database. The relational model is the most popular database approach today. It is based on organizing data into tables of records (or objects) with particular fields (or attributes). A key field, whose value uniquely identifies individual records in the table, is usually designated for each table.

Relationships among database elements are represented in new tables that may have their own attributes. Relationship tables do not duplicate data in other tables. Instead, they store the key values of the appropriate database records so that the detailed data can be looked up when needed.

Structured Query Language (SQL) is the language used for querying and manipulating relational databases. The select statement is used to formulate queries and has many variations so that particular data can be accessed from the database. Other SQL statements allow data to be added, updated, and deleted from a database.

A database should be carefully designed. Entity-relationship modeling, with its associated ER diagrams, is a popular technique for database design. ER diagrams graphically depict the relationships among database objects and show their attributes and cardinality constraints.

E-commerce is the process of buying and selling services over the Internet. As e-commerce has become increasingly more popular, more stringent security measures have had to be employed to ensure the integrity of sales over the Internet.

Big data is the term used to describe the management of large sets of data that defy traditional solutions such as spreadsheets and database management systems. The insights that big data techniques can yield are important, but require us to overcome the challenges of storing, managing, and analyzing more data than human beings have ever had to deal with before.

ETHICAL ISSUES

Politics and the Internet

The Internet has changed the way political campaigns are run. Just looking at the last few presidential campaigns shows the incredible impact the use of network resources has had, affecting campaign finances, politicians’ behavior, and voter opinions.

A single-day record for raising campaign contributions was set by Ron Paul (Republican), who collected $6 million in one day in 2007 through Internet donations. More notable was Howard Dean (Democrat), who used the Internet as a fundamental tool in his “50-state strategy” primary run in 2004. Although Dean was ultimately defeated in the election, none could deny his success at raising funds through his pioneering Internet campaign of a “$100 revolution,” in which 2 million Americans would give $100 to Dean’s campaign so he could compete with the Republican candidate, George W. Bush. In 2008, Barack Obama, taking a lead from Dean’s emphasis on small donors and the Internet, raised almost half of his $639 million in campaign funds from 3 million donors who gave $300 or less. Understanding that a successful campaign is run on its cash flow, Obama’s staff directed much of its social networking and Internet time toward raising campaign funds.

In the 2008 campaign, the websites of both candidates became the primary focal points where their supporters campaigned for them and undecided voters went to get information. Both campaigns used social media as never before, and relied on thousands of personal blogging sites and forums to get their message out. The Internet allows candidates to quickly respond to negative feedback by quickly adding or editing text and video.

In 2012, it was generally agreed that Obama won the election through his team’s use of data mining the Internet. To quote Time, “Data-driven decisionmaking played a huge role in creating a second term for the 44th president and will be one of the more closely studied elements in the 2012 cycle.” For the 2012 race, Obama’s campaign manager, Jim Messina, promised a metric-driven kind of campaign. The campaign’s analytics department was five times larger than that of the 2008 campaign. For two years they collected, stored, and analyzed data. This data collection and mining effort helped Obama raise $1 billion, created detailed models of swing-state voters, and updated the process of targeting TV ads.³

The 2016 national election saw the Internet affect presidential politics in new and sometimes disturbing ways. Not only was fundraising and information sharing through the Internet at its peak, but messages delivered by a politician to the electorate took an interesting turn. Politicians have always found ways to denigrate their opponents, but Donald Trump did so using social media in ways never seen before.

During the Republican primary process, Donald Trump used Twitter to call his opponents names. Marco Rubio was “Little Marco,” Ted Cruz was “Lyin’ Ted,” and Jeb Bush was “Low-Energy Jeb.” As it became increasingly clear that Trump would win the primary, he turned his sights on the Democrats, calling Hillary Clinton “Crooked Hillary” and Bernie Sanders “Crazy Bernie.”

Trump’s use of social media shocked many, who saw it as unpresidential and compared it to cyberbullying. His supporters, however, reveled in it, saying they liked how Trump “tells it like it is.” Many people assumed that Trump would eventually soften his rhetoric, but that didn’t happen. After he won the presidential election, he continued to use Twitter on a daily basis, bashing those who opposed him or his positions.

During his presidency, Trump’s staff was sometimes surprised to learn of a policy decision via a tweet, causing them to scramble. In 2018, then-Secretary of State Rex Tillerson found out he was being fired only when Trump tweeted about it.⁴

Donald Trump’s use of Twitter continues to have a significant impact on day-today activities in the U.S. government, and the debate continues as to whether the effects are positive or negative.

Other countries are also able to affect our elections using social media. U.S. intelligence agencies agree that the Russian government interfered in the 2016 presidential election to damage Hillary Clinton’s campaign and bolster the candidacies of her opponents.

Among other activities, the Russian government actively disseminated fake news through social media outlets such as Face-book using accounts created specifically for that purpose and with online advertisements (paid for using Russian rubles).⁵

At the time of this writing, an investigation led by special prosecutor Robert Mueller is ongoing, examining the Russian interference and exploring any links or coordination between Donald Trump’s campaign and the Russian government.

EXERCISES

For Exercises 1–20, mark the answers true or false as follows:

True
False

1. A cell in a spreadsheet can contain only raw data.
2. The values in a spreadsheet can be formatted in a variety of ways.
3. A spreadsheet should be set up so that changes to the data are automatically reflected in any cells affected by that data.
4. A spreadsheet function is a program that the user writes to compute a value.
5. A range of cells can be specified that go horizontally or vertically, but not both.
6. A circular reference in a spreadsheet is a powerful and useful tool.
7. A spreadsheet is useful for performing what-if analysis.
8. What-if analysis can affect only one value at a time in a spreadsheet.
9. A database engine is software that supports access to the database contents.
10. The physical database represents the logical structure of the data in the database.
11. A query is a request to a database for information.
12. The results of a query can be structured in many ways.
13. The hierarchical model is the most popular database management model today.
14. A database table is a collection of records, and a record is a collection of fields.
15. The values in the key fields of a table uniquely identify a record among all other records in the table.
16. A database engine often interacts with a particular language for accessing and modifying the database.
17. An entity-relationship (ER) diagram represents primary database elements in a graphical form.
18. The cardinality of a relationship puts restrictions on the number of relationships that can exist at one time.
19. E-commerce is the process of keeping financial records, such as accounts payable, online.
20. The dot-com collapse promoted electronic commerce.

For Exercises 21–25, match the solution to the question.

dynamic
function
circular
range
schema
field

21. A spreadsheet is ____ in that it responds to changes in the data by immediately updating all affected values.
22. A spreadsheet formula may operate on a ____ of cells, such as C4..C18.
23. The database ____ is the specification of the logical structure of the data in the database.
24. A ____ reference occurs when the result of one formula is ultimately based on another, and vice versa.
25. A ____ contains a single data value.

Exercises 26–38 are problems or short-answer questions.

Use the following spreadsheet containing student grades for Exercises 26–34.

A spreadsheet represents the grades of students in Exam 1, Exam 2, Exam 3, and Average.

26. Specify the grades for Exam 2.
27. Specify the average for Exam 1.
28. Specify the average for Sarah.
29. Specify the third exam grade for Mari.
30. Specify the exam grades for Suzy.
31. What formula is stored in F15?
32. D16 contains the formula D15/ COUNT(D4..D14). What is another formula that would yield the same value?
33. What formula is stored in E13?
34. Which values would change if Phil’s Exam 2 score was corrected to 87?
35. What is a spreadsheet circular reference? Why is it a problem? 36.

Give a specific example of an indirect circular reference similar to the one shown in Figure 12.5.
37. What is what-if analysis?
38. Name some what-if analysis questions that you might ask if you were using a spreadsheet to plan and track some stock purchases. Explain how you might set up a spreadsheet to help answer those questions.

For Exercises 39–42, use the paper spreadsheet form supplied on the textbook’s website or use an actual spreadsheet application program to design the spreadsheets. Your instructor may provide more specific instructions regarding these questions.

39. Design a spreadsheet to track the statistics of your favorite major league baseball team. Include data regarding runs, hits, errors, and runs batted in (RBIs). Compute appropriate statistics for individual players and the team as a whole.
40. Design a spreadsheet to maintain a grade sheet for a set of students. Include tests and projects, giving various weights to each in the calculation of the final grade for each student. Compute the average grade per test and project for the whole class.
41. Assume you are going on a business trip. Design a spreadsheet to keep track of your expenses and create a summary of your totals. Include various aspects of travel such as car mileage, flight costs, hotel costs, and miscellaneous expenses (such as taxis and tips).
42. Design a spreadsheet to estimate and then keep track of a particular project’s activities. List the activities, the estimated and actual dates for those activities, and schedule slippage or gain. Add other data as appropriate for your project.
43. Compare a database with a database management system.
44. What is a database schema?
45. Describe the general organization of a relational database.
46. What is a field (attribute) in a database?
47. Which other fields (attributes) might we include in the database table of Figure 12.8?
48. Which other fields (attributes) might we include in the database table of Figure 12.9?
49. What is a key in a relational database table?
50. Specify the schema for the database table of Figure 12.9.
51. How are relationships represented in a relational database?
52. Define an SQL query that returns all attributes of all records in the Customer table.
53. Define an SQL query that returns the MovieId number and title of all movies that have an R rating.
54. Define an SQL query that returns the address of every customer in the Customer table who lives on Lois Lane.
55. Define an SQL statement that inserts the movie Armageddon into the Movie table.
56. Define an SQL statement that changes the address of Amy Stevens in the Customer table.
57. Define an SQL statement that deletes the customer with a CustomerId of 103.
58. What is an ER diagram?
59. How are entities and relationships represented in an ER diagram?
60. How are attributes represented in an ER diagram?
61. What are cardinality constraints, and how are they shown in ER diagrams?
62. What are the three general cardinality constraints?
63. Design a database that stores data about the books in a library, the students who use them, and the ability to check out books for a period of time. Create an ER diagram and sample tables.
64. Design a database that stores data about the courses taught at a university, the professors who teach those courses, and the students who take those courses. Create an ER diagram and sample tables.
65. What were some of the web-based technologies that allowed e-commerce to become viable?
66. What is big data? How does it relate to spreadsheets and databases?
67. Name three challenges in big data analysis.

THOUGHT QUESTIONS

1. Other than the examples given in this chapter, think of five situations for which you might set up a spreadsheet.
2. Other than the examples given in this chapter, think of five situations for which you might set up a database.
3. Does the use of computerized databases mean that we can do away with paper files? What sorts of paper files might still be needed?
4. One of the reasons that U.S. elections are so costly is that they cover such a large span of time. The United Kingdom has only about six weeks in which the candidates campaign. Would shortening the election cycle be a good idea? Does the use of the Internet to disseminate information affect your answer?
5. How has the Internet changed the funding of political campaigns? Is the change in funding a good or a bad thing?
6. Were you actively involved in any recent elections? From where did you get your information? How do you think those sources of information influenced your positions?
7. Is the Internet helping or hurting the democratic process?
8. Do you think that the Internet has supported political extremes?
9. What do you think of Donald Trump’s use of Twitter?

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Table of Contents for
12.4 E-Commerce

12.4 E-Commerce

12.5 Big Data

SUMMARY

KEY TERMS

EXERCISES

THOUGHT QUESTIONS

Table of Contents for 12.4 E-Commerce

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12.4 E-Commerce