Description
Recent business development in connection with the present state of world economy evokes the managers to make alterations in their decision making.
Journal of Applied Economic Sciences
94
BUSINESS INTELLIGENCE AS A SUPPORT OF E-COMMERCE
SYSTEMS IN CONNECTION WITH DECISION MAKING AND CROSS-
BORDER ONLINE SHOPPING
Petr SUCHÁNEK
The Silesian University in Opava
School of Business Administration in Karviná, Czech Republic
[email protected]
Abstract:
Recent business development in connection with the present state of world economy evokes the managers
to make alterations in their decision making. Companies´ managements can make right decisions only with the
aid of current and precision information. In addition, managers have to get all information in time. Decision-
making processes should be realized quickly and under the strong thumb of a competitive environment. Some
years ago, for the support of top level of management, information systems development was oriented to
decision support systems (DSS). On the present, decision support systems development is transformed to
development of business intelligence (BI) systems. Business intelligence technologies provide historical, current,
and predictive views of business operations. In business intelligence, described views are represented by
reporting, ad-hoc reporting, OLAP analysis etc. With the aid of business intelligence systems development,
managers have more possibilities to choose types and structures of information. This article deals with business
intelligence systems development in connection with the e-commerce systems, cross-border online shopping and
business companies´ management needs.
Keywords: e-commerce system, online shopping, customer requirements, management needs, business
intelligence, reporting.
JEL Classification: C87, C88, F43, F47, L21, M15, M16, M21, O31, O33, Q55.
1. Introduction
Electronic Commerce or e-commerce is the trade of products and services by means of the
Internet or other computer networks. E-commerce is expected to influence a wide range of supply
chain systems and thus lead to unidentified environmental impacts. E-commerce provides customers
with a platform to search product information through global markets with a wider range of choices,
which makes comparison and evaluation easier and more efficient. Although number of Europeans
and world shopping on-line grow up, there are a high percentage of unsuccessfully business
transactions in foreign internet shops. Business environment and its development in connection with a
present state of world economy urge managers to look for new methods and procedures lowering
financial charges especially in the sphere of ancillary processes. Many companies have to redefine
some internal and external processes and IS/IT architecture and in many cases companies have to use
support of internal functions with help of external resources (outsourcing). Managers can make right
decision only if they get precision information in a required form in right time. To this goal, recent
development of information systems is oriented to business intelligence. Business intelligence is
rapidly becoming a major source to achieve competitive advantage and often aims to support better
business decision-making, among others, in the sphere of e-commerce (online shopping).
2. E-commerce statistics and the Supposed Development
There were and there are many forecasts concerning of e-commerce, especially online shopping.
Jaap Favier in 2006 forecasted that in the coming five years, the number of Europeans online shopping
will grow from 100 million to 174 million. Their average yearly net retail spending will grow from
around €1,000 to €1,500, as UK Net consumers outspend even their US counterparts online. Overall,
this will cause European e-commerce to surge to €263 billion in 2011, with travel, clothes, groceries,
and consumer electronics all above the €10 billion per year mark. (Favier 2006) The other forecast
says that in concordance to a recent report from eMarketer, e-commerce in Europe will reach 323
billion Euros ($407 billion) by 2011. That is an average 25% growth rate each year from 2007 to 2011.
Italy, Spain and the Netherlands will growth to be a large force for European e-commerce hubs
between 2007 and 2011. However Eastern European countries - Russia, Poland and the Czech
Volume V/ Issue 1(11)/ Spring 2010
95
Republic - won't impact online shopping hubs until well into the 2010 decade according to eMarketer
researchers. (Knight 2007)
All the forecasts are differentiated in terms of numbers, but the same in terms of e-commerce
purchase’s continuous increasing. The statistics and expectations presented herein above can be
documented by data presented by Czech Statistic Authority and other Statistic Offices in different
countries recently.
Already 150 million consumers shop online, although only 30 million shop online cross-border.
Cross-border e-commerce systems development depends on globalization of the world economy. The
globalization of the world economy is characterized by a huge amplification of the interconnections
collaborations and interdependencies between the national states generated from the tendency of the
economical objectives and interests to exceed the national borders. (Radescu 2008) A big sense for the
cross-border online shopping development has also sequential financial integration. (Mirdala 2008)
Report on cross-border e-commerce show problems with the business transactions in foreign internet
shops.
Figure 1. Cross-border online shopping in EU member countries.
Source: Czech statistical office, 2009 and EUROSTAT, 2009.
In terms of member states of European Union, almost 20 % of the all online shoppers buy in
foreign e-shops. 13 % online shoppers (from member country of EU) buy goods in e-shops from
countries out of EU. (Figure 1) Research results show that 60 % of attempts to buy products in foreign
internet shops are failure. Reason is that businessmen for various reasons do not offer the goods into
the some countries and in many cases there are some problems with payments systems. The biggest
problems with the cross-border online shopping in out of EU countries have people in Bulgaria,
Rumania, Latvia, Malta and Belgium. The smallest problems in the sphere of cross-border online
shopping have people in Austria and Spain. (EURACTIVE 2009)
One of the barriers to cross-border online trade is language proficiency. 33% of EU consumers
say they are willing to purchase goods and services in another language, while 59% of retailers are
prepared to carry out transactions in more than one language.
Although there are some problems at present, we can suppose changes which will lead to
takeoff a cross-border online shopping development. This predication is supported by:
Journal of Applied Economic Sciences
96
next development of information technologies,
foreing business markets opening off,
currency unification (the euro adpotting),
payment systems development,
co-ordination of business activities at the level of supranational bodies,
the improving of language proficiency.
Regarding to the current worldwide economic conditions, rapid development in the sphere of
internet online shopping in Far East, above all in China and India, can be supposed. This presumption
is supported, among others, by the economic development and development of world internet users.
Towards the end of the year 2009, there are approximately 1 733 993 742 world internet users, from
that 338 000 000 in China. (IMRWORLD 2009) Rightly China´s, India´s and other Asiatic countries´
markets will offer a big business potential in future. Contemporary software producers prepare for this
fact and a great number of software contain Chinese and other Asiatic countries´ languages support.
3. E-commerce systems
E-commerce systems are fundamental aids of online shopping. Generally and simply, e-
commerce system can be defined as web server linked by company´s information system. Detailed
definition of e-commerce system appears from definition of information system. (Figure 2)
Figure 2. Common components of information systems.
Figure 3. E-commerce system.
E-commerce system is about combining of several parts (Figure 3):
customers,
suppliers (sellers, dealers, producers, businessmen),
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97
web server,
information system (ERP, CRM, database system),
payment system,
dispatch system,
legislature.
E-commerce systems are developed for support of business activities. Customers have
requirements and managers have to find of such ways, methods and resources to satisfy customer
requirements and needs. A great emphasis has to be aimed at all management systems. In the sphere of
e-commerce there are CRM (Customer Relationship Management), SCM (Supply Chain
Management), FRM (Financial Resource Management), HRM (Human Resource Management), MRP
(Manufacturing Resource Planning) and CPM (Composite Product Mapping).
ERP is suitable for global operations as it encompasses all the domestic jargons, currency
conversions, diverse accounting standards, and multilingual facilities. ERP software attempts to
integrate business processes across departments onto a single enterprise-wide information system. The
major benefits of ERP are improved coordination across functional departments and increased
efficiencies of doing business. The goal of CRM is to collect information gained by doing business in
a central repository, analyze it, and make it available to all departments. In many cases, CRM are
integrated into ERP, but it is not the rule.
CRM and ERP benefits can be measured and quantified. With usage of ERP, company can gain
following benefits:
improve alignment of strategies and operations,
improve productivity and insight,
reduce costs through increased flexibility,
support changing industry requirements,
reduce risk,
improve financial management and corporate governance,
optimize IT spending,
gain higher ROI (Return on Investment) faster,
retain top performers,
provide immediate access to enterprise information.
A major benefit of CRM can be the development of better relations with the existing and new
customers, which can lead to:
increased sales through better timing due to anticipating needs based on historic trends,
identifying needs more effectively by understanding specific customer requirements,
cross-selling of other products by highlighting and suggesting alternatives or enhancements,
identifying which of your customers are profitable and which are not.
The condition of an entry to global markets is an adjustment of the information system to global
information and business system management standards. Management standards are defined for three
basic sectors which are customer relationship management, supply management and operating
management. These sectors can be further refined into information system management, business
processes management, management of logistics and production logistics, management of human
resources, legal rules in relation to international law etc. (Vym?tal and Suchánek 2009)
Payment systems are often ones of the problem area of e-commerce especially in context of
cross-border online shopping. There are numerous different payments systems available for online
merchants. These include the traditional credit, debit and charge card but also new technologies such
as digital-wallets, e-cash, mobile payment, e-checks, cash on delivery. To support of the cross-border
online shopping development, it is necessary to provide the customers safe payment environment and
to give support to international bank clearing.
Dispatch is supported and controlled by SCM. SCM is the oversight of materials, information,
and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to
consumer. Supply chain management involves coordinating and integrating these flows both within
and among companies. Supply-chain management, at least in the largest multi-national corporations, is
a global endeavor. (Murillo 2001)
Like every area of business these days, ecommerce is surrounded by a maze of red tape, rules
and regulations. In fact, selling online tends to be worse because of the international dimension. On
Journal of Applied Economic Sciences
98
the one hand, legislature can help to online shopping and cross-border online shopping, on the other
hand can scant e-commerce development.
4. Customer Requirements and Management Needs
In terms of e-commerce, customer requirements can be separated up two groups. The first group
of customer requirements result from exploitation of IS/IT as the main technological support of e-
business and e-commerce environment. In 2003, ANEC Policy Statement on Design for All called
upon the standard- makers to take the following generic consumer requirements into account when
designing, selecting, commissioning, modifying and standardizing ICT systems. Requirements for
IS/IT were summarized as accessibility/design for all, adaptability, child safety issues, comprehensible
standards, consistent user interface, cost transparency, easily adaptable access and content control,
ease of use, environmental issues, error tolerance and system stability, explorability, functionality of
solution, health and safety issues, information supply for first-time user set-up procedure,
interoperability and compatibility, multi-cultural and multi-lingual aspects, provision of system status
information, privacy and security of information, quality of service, system reliability and durability,
rating and grading systems, reliability of information, terminology. (ANEC 2005)
The second group of customer requirements is closely associated with business transactions.
Customers want to find what they want easily and in short time, to get sufficient number of
information, to place an order easily, payment system to be secured and failsafe, to get goods in
quality of service and in short time, goods to be guaranteed by sellers (producers) and to get benefits
in dependence on a number of purchases.
To be reliable in an uncertain and changing environment, firms must be able to quickly respond
to changes. To obtain it, managements need actual information. The most important condition of
customer satisfaction is feedback. Suppliers and producers have to monitor market environment and
all have to be targeted the customers. All customer requirements have to be monitored for ever and
company information system with the all company´ processes have to be formed to ensure quality and
rapid processing of the all customer feedback information, needs and requirements. Feedback
information can be getting by the communication channels which are usually integrated in CRM
(Customer Relationship Management). Feedback is the most important condition of getting
information. If managers want to satisfy all customer requirements, they should: get precision
information, get information in time, get information in required form, get information in visual form,
know information what do they want to,
Besides information managers need:
to develop the ability to apply information technology in complex and sustained situations and
to understand the consequences of doing so,
to learn the foundations on which information technology and applications are built
and current or contemporary skills.
5. Business Intelligence
Business Intelligence is a term that refers to the sum total, or effect, of gathering and processing
data, building rich and relevant information, and feeding it back into daily operations so that managers
can make timely, effective decisions and better plans for the future. Generally business intelligence
brings to managers a quite number of advantages. The advantages enjoyed by market leaders and
made possible by business intelligence include the high responsiveness of the company to the needs of
its customers, recognition of customer needs, ability to act on market changes, optimization of
operations, cost-effectiveness, quality analysis as the basis for future projections, the best possible
utilization of resources etc.
Business intelligence is oriented to management needs and decision making support. Optimal
setting of control processes is a prerequisite of the planned and expected aims. A business processes
are the collections of activities designed to produce a specific output for a particular customer or
market. It implies a strong emphasis on how the work is done within and organization, in contrast to a
product's focus on what.
To do right decisions, managers need information. Data that is relevant to a business decision
may come from anywhere. The most important sources of data include:
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Master data - this is data that is collected (usually once and once only) to define the entities
in an e-business system (customer file, product file, account codes, pricing codes, etc...). Scores of the
time we can meet with term of Master Data Management (MDM). MDM comprises a set of processes
and tools that consistently defines and manages the non-transactional data entities of an organization
(which may include reference data). (WIKIPEDIA 2009)
Configuration data - as the term implies this is data that defines the nature of the system
itself. The system is configured to reflect the nature and needs of the business.
Operations data (OLTP - Online transaction processing) - also known as activity this data
is generated by daily business activities such as sales orders, purchase orders, invoices, accounting
entries, and so on. OLTP refers to a class of systems that facilitate and manage transaction-oriented
applications, typically for data entry and retrieval transaction processing.
Information systems (OLAP - Online analytical processing) - these are sophisticated
applications that collect information from various internal and external sources to analyze data and
distill meaningful information. OLAP software allows for the real-time analysis of data stored in
a database. The OLAP server is normally a separate component that contains specialized algorithms
and indexing tools to efficiently process data mining tasks with minimal impact on database
performance.
Almost all requisite data for the decision making support in e-commerce comes from CRM and
ERP systems. Business intelligence is closely related to data warehousing. Data has to be processed
(data selection, data analysis, data clearing etc.) and send in right time and in required form to the
competent persons usually act in management system. (Figure 4) Obtained data are basis of decision
making support at all levels and kinds of management.
Figure 4. Business intelligence system.
Data processing is support by ETL (Extraction, Transformation and Loading). The ETL process
is also very often referred to as Data Integration process and ETL tool as a Data Integration platform.
The terms closely related to and managed by ETL processes are: data migration, data management,
data cleansing, data synchronization and data consolidation. (ETL-TOOLS.INFO 2009)
The purpose of the Data Warehouse in the overall Data Warehousing Architecture is to integrate
corporate data. Data warehousing evolved through 1990s to environments that typically featured
batch-oriented “stocking” and “restocking” of the data warehouse, primarily for purposes of after-the-
fact reporting and analysis. (Simon and Shaffer 2001) The amount of data in the data warehouse is
massive. Data is stored at a very granular level of detail. For example, every sale that has ever
occurred in the organization is recorded and related to dimensions of interest. This allows data to be
sliced and diced, summed and grouped in unimaginable ways. Recent technological advancements in
Journal of Applied Economic Sciences
100
data warehousing have been contributing to the emergence of business intelligence useful for
managerial decision making. (Taniar 2009)
Applications what can be for example SharePoint, MS Excel, BIRT Project, The Pentaho BI
Project, Agata Report and many other (some of applications can be interconnected) are fundamental
interface between system and managers. With the aid of shown application users can choose and
manipulate a wide variety of visual representations, including map-based data displays to review
business intelligence reporting results geographically, multidimensional scatter plots to view data
statistically, and bar charts, pie charts, line graphs, profile charts and more.
At present, when the world economic conditions are not affable, companies look for all
information which would help them to start economic growth. In this respect e-commerce companies
have recently started to capture data on the social interaction between consumers in their websites,
with the potential objective of understanding and leveraging social influence in customers' purchase
decision making to improve customer relationship management and increase sales. (Young and
Srivastava 2007)
Business intelligence systems are able to provide the managers quite a number of statistics
dealing with customers and their environment. As important customer statistics can be considered, for
example, matching sales revenues with site visitor activity, by week and month, in total and by
product line, matching weekly and monthly sales with site visitor activity over time (trend analysis), in
total and by product line, matching sales revenues with site visitor activity, by day and hour, in total
and by product line (to measure the effectiveness of advertising campaigns), matching sales revenues
with site visitor activity from main referrers, by week and month, in total and by product line. Where
the referrer is a search engine, also matching the search query with sales revenues. (INTERNET
MARKETING ENGINE 2008) These statistics respond the managers to questions:
Who did buy?
How much did they buy?
When did they buy?
What did they buy?
From where customer arrived at the site?
In which region customer are located?
How they arrived at the site (e.g. by what search engine query)?
From which page customer entered the site?
Their path through the site?
From which page customer left the site?
On a weekly and monthly basis and the trends, over time.
Advantages and benefits of business intelligence in the sphere of e-commerce can be
summarized as:
Business intelligence gives any firm the specific view of corporate data that is required for
progress (quickly access sales, product and organizational data in any database).
In sales and marketing, business intelligence offers new tools for understanding customers’
needs and responding to market opportunities
By providing financial planners with immediate access to real-time data, Business
Intelligence builds new value into all financial operations including budgeting & forecasting.
Business intelligence supports decision-making with automatic alerts and automatically
refreshed data.
Business intelligence provides performance monitoring for accelerated action and decision
making.
Business intelligence makes companies possible to receive and process data from cross-
border business activities (above all from cross-border online shopping).
Business intelligence can bring to companies competitive advantage.
Besides data from business intelligence systems, companies can use services of the consultation
companies. There are many consultation companies providing information and doing analyses. Correct
source information are necessary, but usually have to be paid for. There are many sources providing
statistical data on the Internet, but these are usually not adequate. Managers can acquire correct
information from the many sources. (Molnár 2009) Following sources supply the attested information
usable for manager’s decision making in the global markets. Foreign stock market information can be
Volume V/ Issue 1(11)/ Spring 2010
101
found on (for example):http://www.bloomberg.com,http://www.dowjones.com,http://www.nyse.com,,http://www.nasdaq.com,http://www.reuters.com,http://money.cnn.com,http://www.imrworld.org/,http://finance.yahoo.com/,http://www.marketwatch.com/,http://www.indiainfoline.com/. Marketing information can be found on (for example):http://www.formacompany.ie),http://reports.mintel.com/,http://www.eiu.com,http://www.frost.com,http://www.adlittle.com,http://www.datamonitor.com,http://www.euromonitor.com/. Law and
legislative information can be found on (for example):http://www.iblc.com/home/,http://www.iblc.com/,http://www.ibls.com/,http://www.enterweb.org/law.htm,http://euro.ecom.cmu.edu/resources/elibrary/ecllinks.shtml.
6. Conclusions
E-commerce is one of the most important facets of the Internet. E-commerce brings benefits to
organizations that use this with their business partners, to customers and generally to society. Besides
quite a number of benefits, e-commerce fumbles with some problems. One of them is a problem with
cross-border online shopping. Reason is that businessmen for various reasons do not offer the goods
into the some countries and in many cases there are some problems with payments systems. Although
there are some problems at present, we can suppose changes which will lead to takeoff a cross-border
online shopping development. Regarding to the current worldwide economic conditions, rapid
development in the sphere of internet online shopping in Far East, above all in China and India, can be
supposed. Rightly China´s, India´s and other Asiatic countries´ markets will offer a big business
potential in future. Hence, it is necessary to understand the development of e-commerce and its future
trends. Contemporary software producers prepare for this fact and a great number of software contain
Chinese and other Asiatic countries language support. The present state of world economy requires
searching for new methods and procedures in support of decision making. Suppliers and producers
have to monitor market environment and all have to be targeted the customers. All customer
requirements have to be monitored for ever and company information system with the all company´
processes have to be formed to ensure quality and rapid processing of the all customer feedback
information, needs and requirements. In this respect, managers have to get right information in right
time. Recent development in the sphere of data processing is oriented to business intelligence.
Business intelligence systems are able to provide the managers quite a number of statistics dealing
with customers and their environment. Generally, Business Intelligence solutions are necessary for any
company to keep up with the competition brought on by changing, trends and technologies and the
freely available information waiting to be used. Target information help managers in decision making.
Besides information from business intelligence systems, there are many consultation companies
providing information and doing analyses.
7. References:
[1] ANEC. 2005: Consumer Requirements in Standardisation relating to the Information Society.
Retrieved: 5
th
May, 2009. URL:
[2] INTERNET MARKETING ENGINE. 2008: Sale Analysis and E-commerce Reporting. Retrieved:
5
th
November, 2009. URL:
[3] ETL-TOOLS.INFO. 2009: Definition and concepts of the ETL processes. Retrieved: 15
th
November, 2009. URL:http://etl-tools.info/en/bi/etl_process.htm.
[4] EURACTIVE. 2009: Problémy s online nákupy po Evrop? trvají. Retrieved: 5
th
November, 2009.
URL:http://www.euractiv.cz/podnikani-a-zamestnanost/clanek/problemy-s-online-nakupy-po-
evrope-trvaji-006664.
[5] Favier, J. 2006: Europe's eCommerce Forecast: 2006 To 2011. Retrieved: 5
th
November, 2009.
URL:http://www.forrester.com/Research/Document/Excerpt/0,7211,38297,00.html.
[6] IMRWORLD. 2009: Global E-business Intelligence. Retrieved: 29
th
November 2009. URL:http://www.imrworld.org/.
Journal of Applied Economic Sciences
102
[7] Knight, K. 2007: Online shopping forecast: 323 billon euro by 2011 . Retrieved: 5
th
November,
2009.http://www.bizreport.com/2007/08/online_shopping_forecast_323_euros_by_2011.html.
[8] Mirdala, R. 2008. “Financial integration and financial deepening in the selected European
transition economies”. Journal of Applied Economic Sciences. Volume III, Issue 4(6), Winter.
[9] Molnár, Z. 2009. Internetové informa?ní zdroje pro strategické plánování. International
Conference Internet, Competitivenes and Organisational Security in Knowledge Society. Zlín:
Tomas Bata University in Zlin.
[10] Murillo, L. 2001. “Supply chain management and the international dissemination of e-
commerce”. Industrial Management & Data Systems. Volume 101, Issue 7: 370 – 377.
[11] Radescu, D. 2008. “The process of globalization in the world economy”. Journal of Applied
Economic Sciences. Volume III, Issue 1(3), Spring.
[12] Simon, A., Shaffer, S. 2001. “Data Warehousing and Business Intelligence for E-commerce”.
London: Academic press, 320.
[13] Taniar, D. 2009. Progressive Methods in Data Warehousing and Business Intelligence: Concepts
and Competitive Analytics. Information Science Reference.
[14] Vym?tal, D. Suchánek, P. 2009. E-business environment in the Global Information Society. V G.
w. Korfantego, Podnikání v podmínkách Evropské unie. Katowice: Górno?l?ska wy?sza szko?a
Handlova im. Wojciecha Korfantego.
[15] WIKIPEDIA. URL: .
[16] Young, K., Srivastava, J. 2007. „Impact of social influence in e-commerce decision making”.
ACM International Conference Proceeding Series, Vol. 258. Minneapolis. USA. P., 293 – 302.
doc_975525660.pdf
Recent business development in connection with the present state of world economy evokes the managers to make alterations in their decision making.
Journal of Applied Economic Sciences
94
BUSINESS INTELLIGENCE AS A SUPPORT OF E-COMMERCE
SYSTEMS IN CONNECTION WITH DECISION MAKING AND CROSS-
BORDER ONLINE SHOPPING
Petr SUCHÁNEK
The Silesian University in Opava
School of Business Administration in Karviná, Czech Republic
[email protected]
Abstract:
Recent business development in connection with the present state of world economy evokes the managers
to make alterations in their decision making. Companies´ managements can make right decisions only with the
aid of current and precision information. In addition, managers have to get all information in time. Decision-
making processes should be realized quickly and under the strong thumb of a competitive environment. Some
years ago, for the support of top level of management, information systems development was oriented to
decision support systems (DSS). On the present, decision support systems development is transformed to
development of business intelligence (BI) systems. Business intelligence technologies provide historical, current,
and predictive views of business operations. In business intelligence, described views are represented by
reporting, ad-hoc reporting, OLAP analysis etc. With the aid of business intelligence systems development,
managers have more possibilities to choose types and structures of information. This article deals with business
intelligence systems development in connection with the e-commerce systems, cross-border online shopping and
business companies´ management needs.
Keywords: e-commerce system, online shopping, customer requirements, management needs, business
intelligence, reporting.
JEL Classification: C87, C88, F43, F47, L21, M15, M16, M21, O31, O33, Q55.
1. Introduction
Electronic Commerce or e-commerce is the trade of products and services by means of the
Internet or other computer networks. E-commerce is expected to influence a wide range of supply
chain systems and thus lead to unidentified environmental impacts. E-commerce provides customers
with a platform to search product information through global markets with a wider range of choices,
which makes comparison and evaluation easier and more efficient. Although number of Europeans
and world shopping on-line grow up, there are a high percentage of unsuccessfully business
transactions in foreign internet shops. Business environment and its development in connection with a
present state of world economy urge managers to look for new methods and procedures lowering
financial charges especially in the sphere of ancillary processes. Many companies have to redefine
some internal and external processes and IS/IT architecture and in many cases companies have to use
support of internal functions with help of external resources (outsourcing). Managers can make right
decision only if they get precision information in a required form in right time. To this goal, recent
development of information systems is oriented to business intelligence. Business intelligence is
rapidly becoming a major source to achieve competitive advantage and often aims to support better
business decision-making, among others, in the sphere of e-commerce (online shopping).
2. E-commerce statistics and the Supposed Development
There were and there are many forecasts concerning of e-commerce, especially online shopping.
Jaap Favier in 2006 forecasted that in the coming five years, the number of Europeans online shopping
will grow from 100 million to 174 million. Their average yearly net retail spending will grow from
around €1,000 to €1,500, as UK Net consumers outspend even their US counterparts online. Overall,
this will cause European e-commerce to surge to €263 billion in 2011, with travel, clothes, groceries,
and consumer electronics all above the €10 billion per year mark. (Favier 2006) The other forecast
says that in concordance to a recent report from eMarketer, e-commerce in Europe will reach 323
billion Euros ($407 billion) by 2011. That is an average 25% growth rate each year from 2007 to 2011.
Italy, Spain and the Netherlands will growth to be a large force for European e-commerce hubs
between 2007 and 2011. However Eastern European countries - Russia, Poland and the Czech
Volume V/ Issue 1(11)/ Spring 2010
95
Republic - won't impact online shopping hubs until well into the 2010 decade according to eMarketer
researchers. (Knight 2007)
All the forecasts are differentiated in terms of numbers, but the same in terms of e-commerce
purchase’s continuous increasing. The statistics and expectations presented herein above can be
documented by data presented by Czech Statistic Authority and other Statistic Offices in different
countries recently.
Already 150 million consumers shop online, although only 30 million shop online cross-border.
Cross-border e-commerce systems development depends on globalization of the world economy. The
globalization of the world economy is characterized by a huge amplification of the interconnections
collaborations and interdependencies between the national states generated from the tendency of the
economical objectives and interests to exceed the national borders. (Radescu 2008) A big sense for the
cross-border online shopping development has also sequential financial integration. (Mirdala 2008)
Report on cross-border e-commerce show problems with the business transactions in foreign internet
shops.
Figure 1. Cross-border online shopping in EU member countries.
Source: Czech statistical office, 2009 and EUROSTAT, 2009.
In terms of member states of European Union, almost 20 % of the all online shoppers buy in
foreign e-shops. 13 % online shoppers (from member country of EU) buy goods in e-shops from
countries out of EU. (Figure 1) Research results show that 60 % of attempts to buy products in foreign
internet shops are failure. Reason is that businessmen for various reasons do not offer the goods into
the some countries and in many cases there are some problems with payments systems. The biggest
problems with the cross-border online shopping in out of EU countries have people in Bulgaria,
Rumania, Latvia, Malta and Belgium. The smallest problems in the sphere of cross-border online
shopping have people in Austria and Spain. (EURACTIVE 2009)
One of the barriers to cross-border online trade is language proficiency. 33% of EU consumers
say they are willing to purchase goods and services in another language, while 59% of retailers are
prepared to carry out transactions in more than one language.
Although there are some problems at present, we can suppose changes which will lead to
takeoff a cross-border online shopping development. This predication is supported by:
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next development of information technologies,
foreing business markets opening off,
currency unification (the euro adpotting),
payment systems development,
co-ordination of business activities at the level of supranational bodies,
the improving of language proficiency.
Regarding to the current worldwide economic conditions, rapid development in the sphere of
internet online shopping in Far East, above all in China and India, can be supposed. This presumption
is supported, among others, by the economic development and development of world internet users.
Towards the end of the year 2009, there are approximately 1 733 993 742 world internet users, from
that 338 000 000 in China. (IMRWORLD 2009) Rightly China´s, India´s and other Asiatic countries´
markets will offer a big business potential in future. Contemporary software producers prepare for this
fact and a great number of software contain Chinese and other Asiatic countries´ languages support.
3. E-commerce systems
E-commerce systems are fundamental aids of online shopping. Generally and simply, e-
commerce system can be defined as web server linked by company´s information system. Detailed
definition of e-commerce system appears from definition of information system. (Figure 2)
Figure 2. Common components of information systems.
Figure 3. E-commerce system.
E-commerce system is about combining of several parts (Figure 3):
customers,
suppliers (sellers, dealers, producers, businessmen),
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web server,
information system (ERP, CRM, database system),
payment system,
dispatch system,
legislature.
E-commerce systems are developed for support of business activities. Customers have
requirements and managers have to find of such ways, methods and resources to satisfy customer
requirements and needs. A great emphasis has to be aimed at all management systems. In the sphere of
e-commerce there are CRM (Customer Relationship Management), SCM (Supply Chain
Management), FRM (Financial Resource Management), HRM (Human Resource Management), MRP
(Manufacturing Resource Planning) and CPM (Composite Product Mapping).
ERP is suitable for global operations as it encompasses all the domestic jargons, currency
conversions, diverse accounting standards, and multilingual facilities. ERP software attempts to
integrate business processes across departments onto a single enterprise-wide information system. The
major benefits of ERP are improved coordination across functional departments and increased
efficiencies of doing business. The goal of CRM is to collect information gained by doing business in
a central repository, analyze it, and make it available to all departments. In many cases, CRM are
integrated into ERP, but it is not the rule.
CRM and ERP benefits can be measured and quantified. With usage of ERP, company can gain
following benefits:
improve alignment of strategies and operations,
improve productivity and insight,
reduce costs through increased flexibility,
support changing industry requirements,
reduce risk,
improve financial management and corporate governance,
optimize IT spending,
gain higher ROI (Return on Investment) faster,
retain top performers,
provide immediate access to enterprise information.
A major benefit of CRM can be the development of better relations with the existing and new
customers, which can lead to:
increased sales through better timing due to anticipating needs based on historic trends,
identifying needs more effectively by understanding specific customer requirements,
cross-selling of other products by highlighting and suggesting alternatives or enhancements,
identifying which of your customers are profitable and which are not.
The condition of an entry to global markets is an adjustment of the information system to global
information and business system management standards. Management standards are defined for three
basic sectors which are customer relationship management, supply management and operating
management. These sectors can be further refined into information system management, business
processes management, management of logistics and production logistics, management of human
resources, legal rules in relation to international law etc. (Vym?tal and Suchánek 2009)
Payment systems are often ones of the problem area of e-commerce especially in context of
cross-border online shopping. There are numerous different payments systems available for online
merchants. These include the traditional credit, debit and charge card but also new technologies such
as digital-wallets, e-cash, mobile payment, e-checks, cash on delivery. To support of the cross-border
online shopping development, it is necessary to provide the customers safe payment environment and
to give support to international bank clearing.
Dispatch is supported and controlled by SCM. SCM is the oversight of materials, information,
and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to
consumer. Supply chain management involves coordinating and integrating these flows both within
and among companies. Supply-chain management, at least in the largest multi-national corporations, is
a global endeavor. (Murillo 2001)
Like every area of business these days, ecommerce is surrounded by a maze of red tape, rules
and regulations. In fact, selling online tends to be worse because of the international dimension. On
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the one hand, legislature can help to online shopping and cross-border online shopping, on the other
hand can scant e-commerce development.
4. Customer Requirements and Management Needs
In terms of e-commerce, customer requirements can be separated up two groups. The first group
of customer requirements result from exploitation of IS/IT as the main technological support of e-
business and e-commerce environment. In 2003, ANEC Policy Statement on Design for All called
upon the standard- makers to take the following generic consumer requirements into account when
designing, selecting, commissioning, modifying and standardizing ICT systems. Requirements for
IS/IT were summarized as accessibility/design for all, adaptability, child safety issues, comprehensible
standards, consistent user interface, cost transparency, easily adaptable access and content control,
ease of use, environmental issues, error tolerance and system stability, explorability, functionality of
solution, health and safety issues, information supply for first-time user set-up procedure,
interoperability and compatibility, multi-cultural and multi-lingual aspects, provision of system status
information, privacy and security of information, quality of service, system reliability and durability,
rating and grading systems, reliability of information, terminology. (ANEC 2005)
The second group of customer requirements is closely associated with business transactions.
Customers want to find what they want easily and in short time, to get sufficient number of
information, to place an order easily, payment system to be secured and failsafe, to get goods in
quality of service and in short time, goods to be guaranteed by sellers (producers) and to get benefits
in dependence on a number of purchases.
To be reliable in an uncertain and changing environment, firms must be able to quickly respond
to changes. To obtain it, managements need actual information. The most important condition of
customer satisfaction is feedback. Suppliers and producers have to monitor market environment and
all have to be targeted the customers. All customer requirements have to be monitored for ever and
company information system with the all company´ processes have to be formed to ensure quality and
rapid processing of the all customer feedback information, needs and requirements. Feedback
information can be getting by the communication channels which are usually integrated in CRM
(Customer Relationship Management). Feedback is the most important condition of getting
information. If managers want to satisfy all customer requirements, they should: get precision
information, get information in time, get information in required form, get information in visual form,
know information what do they want to,
Besides information managers need:
to develop the ability to apply information technology in complex and sustained situations and
to understand the consequences of doing so,
to learn the foundations on which information technology and applications are built
and current or contemporary skills.
5. Business Intelligence
Business Intelligence is a term that refers to the sum total, or effect, of gathering and processing
data, building rich and relevant information, and feeding it back into daily operations so that managers
can make timely, effective decisions and better plans for the future. Generally business intelligence
brings to managers a quite number of advantages. The advantages enjoyed by market leaders and
made possible by business intelligence include the high responsiveness of the company to the needs of
its customers, recognition of customer needs, ability to act on market changes, optimization of
operations, cost-effectiveness, quality analysis as the basis for future projections, the best possible
utilization of resources etc.
Business intelligence is oriented to management needs and decision making support. Optimal
setting of control processes is a prerequisite of the planned and expected aims. A business processes
are the collections of activities designed to produce a specific output for a particular customer or
market. It implies a strong emphasis on how the work is done within and organization, in contrast to a
product's focus on what.
To do right decisions, managers need information. Data that is relevant to a business decision
may come from anywhere. The most important sources of data include:
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Master data - this is data that is collected (usually once and once only) to define the entities
in an e-business system (customer file, product file, account codes, pricing codes, etc...). Scores of the
time we can meet with term of Master Data Management (MDM). MDM comprises a set of processes
and tools that consistently defines and manages the non-transactional data entities of an organization
(which may include reference data). (WIKIPEDIA 2009)
Configuration data - as the term implies this is data that defines the nature of the system
itself. The system is configured to reflect the nature and needs of the business.
Operations data (OLTP - Online transaction processing) - also known as activity this data
is generated by daily business activities such as sales orders, purchase orders, invoices, accounting
entries, and so on. OLTP refers to a class of systems that facilitate and manage transaction-oriented
applications, typically for data entry and retrieval transaction processing.
Information systems (OLAP - Online analytical processing) - these are sophisticated
applications that collect information from various internal and external sources to analyze data and
distill meaningful information. OLAP software allows for the real-time analysis of data stored in
a database. The OLAP server is normally a separate component that contains specialized algorithms
and indexing tools to efficiently process data mining tasks with minimal impact on database
performance.
Almost all requisite data for the decision making support in e-commerce comes from CRM and
ERP systems. Business intelligence is closely related to data warehousing. Data has to be processed
(data selection, data analysis, data clearing etc.) and send in right time and in required form to the
competent persons usually act in management system. (Figure 4) Obtained data are basis of decision
making support at all levels and kinds of management.
Figure 4. Business intelligence system.
Data processing is support by ETL (Extraction, Transformation and Loading). The ETL process
is also very often referred to as Data Integration process and ETL tool as a Data Integration platform.
The terms closely related to and managed by ETL processes are: data migration, data management,
data cleansing, data synchronization and data consolidation. (ETL-TOOLS.INFO 2009)
The purpose of the Data Warehouse in the overall Data Warehousing Architecture is to integrate
corporate data. Data warehousing evolved through 1990s to environments that typically featured
batch-oriented “stocking” and “restocking” of the data warehouse, primarily for purposes of after-the-
fact reporting and analysis. (Simon and Shaffer 2001) The amount of data in the data warehouse is
massive. Data is stored at a very granular level of detail. For example, every sale that has ever
occurred in the organization is recorded and related to dimensions of interest. This allows data to be
sliced and diced, summed and grouped in unimaginable ways. Recent technological advancements in
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data warehousing have been contributing to the emergence of business intelligence useful for
managerial decision making. (Taniar 2009)
Applications what can be for example SharePoint, MS Excel, BIRT Project, The Pentaho BI
Project, Agata Report and many other (some of applications can be interconnected) are fundamental
interface between system and managers. With the aid of shown application users can choose and
manipulate a wide variety of visual representations, including map-based data displays to review
business intelligence reporting results geographically, multidimensional scatter plots to view data
statistically, and bar charts, pie charts, line graphs, profile charts and more.
At present, when the world economic conditions are not affable, companies look for all
information which would help them to start economic growth. In this respect e-commerce companies
have recently started to capture data on the social interaction between consumers in their websites,
with the potential objective of understanding and leveraging social influence in customers' purchase
decision making to improve customer relationship management and increase sales. (Young and
Srivastava 2007)
Business intelligence systems are able to provide the managers quite a number of statistics
dealing with customers and their environment. As important customer statistics can be considered, for
example, matching sales revenues with site visitor activity, by week and month, in total and by
product line, matching weekly and monthly sales with site visitor activity over time (trend analysis), in
total and by product line, matching sales revenues with site visitor activity, by day and hour, in total
and by product line (to measure the effectiveness of advertising campaigns), matching sales revenues
with site visitor activity from main referrers, by week and month, in total and by product line. Where
the referrer is a search engine, also matching the search query with sales revenues. (INTERNET
MARKETING ENGINE 2008) These statistics respond the managers to questions:
Who did buy?
How much did they buy?
When did they buy?
What did they buy?
From where customer arrived at the site?
In which region customer are located?
How they arrived at the site (e.g. by what search engine query)?
From which page customer entered the site?
Their path through the site?
From which page customer left the site?
On a weekly and monthly basis and the trends, over time.
Advantages and benefits of business intelligence in the sphere of e-commerce can be
summarized as:
Business intelligence gives any firm the specific view of corporate data that is required for
progress (quickly access sales, product and organizational data in any database).
In sales and marketing, business intelligence offers new tools for understanding customers’
needs and responding to market opportunities
By providing financial planners with immediate access to real-time data, Business
Intelligence builds new value into all financial operations including budgeting & forecasting.
Business intelligence supports decision-making with automatic alerts and automatically
refreshed data.
Business intelligence provides performance monitoring for accelerated action and decision
making.
Business intelligence makes companies possible to receive and process data from cross-
border business activities (above all from cross-border online shopping).
Business intelligence can bring to companies competitive advantage.
Besides data from business intelligence systems, companies can use services of the consultation
companies. There are many consultation companies providing information and doing analyses. Correct
source information are necessary, but usually have to be paid for. There are many sources providing
statistical data on the Internet, but these are usually not adequate. Managers can acquire correct
information from the many sources. (Molnár 2009) Following sources supply the attested information
usable for manager’s decision making in the global markets. Foreign stock market information can be
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found on (for example):http://www.bloomberg.com,http://www.dowjones.com,http://www.nyse.com,,http://www.nasdaq.com,http://www.reuters.com,http://money.cnn.com,http://www.imrworld.org/,http://finance.yahoo.com/,http://www.marketwatch.com/,http://www.indiainfoline.com/. Marketing information can be found on (for example):http://www.formacompany.ie),http://reports.mintel.com/,http://www.eiu.com,http://www.frost.com,http://www.adlittle.com,http://www.datamonitor.com,http://www.euromonitor.com/. Law and
legislative information can be found on (for example):http://www.iblc.com/home/,http://www.iblc.com/,http://www.ibls.com/,http://www.enterweb.org/law.htm,http://euro.ecom.cmu.edu/resources/elibrary/ecllinks.shtml.
6. Conclusions
E-commerce is one of the most important facets of the Internet. E-commerce brings benefits to
organizations that use this with their business partners, to customers and generally to society. Besides
quite a number of benefits, e-commerce fumbles with some problems. One of them is a problem with
cross-border online shopping. Reason is that businessmen for various reasons do not offer the goods
into the some countries and in many cases there are some problems with payments systems. Although
there are some problems at present, we can suppose changes which will lead to takeoff a cross-border
online shopping development. Regarding to the current worldwide economic conditions, rapid
development in the sphere of internet online shopping in Far East, above all in China and India, can be
supposed. Rightly China´s, India´s and other Asiatic countries´ markets will offer a big business
potential in future. Hence, it is necessary to understand the development of e-commerce and its future
trends. Contemporary software producers prepare for this fact and a great number of software contain
Chinese and other Asiatic countries language support. The present state of world economy requires
searching for new methods and procedures in support of decision making. Suppliers and producers
have to monitor market environment and all have to be targeted the customers. All customer
requirements have to be monitored for ever and company information system with the all company´
processes have to be formed to ensure quality and rapid processing of the all customer feedback
information, needs and requirements. In this respect, managers have to get right information in right
time. Recent development in the sphere of data processing is oriented to business intelligence.
Business intelligence systems are able to provide the managers quite a number of statistics dealing
with customers and their environment. Generally, Business Intelligence solutions are necessary for any
company to keep up with the competition brought on by changing, trends and technologies and the
freely available information waiting to be used. Target information help managers in decision making.
Besides information from business intelligence systems, there are many consultation companies
providing information and doing analyses.
7. References:
[1] ANEC. 2005: Consumer Requirements in Standardisation relating to the Information Society.
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May, 2009. URL:
[2] INTERNET MARKETING ENGINE. 2008: Sale Analysis and E-commerce Reporting. Retrieved:
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November, 2009. URL:
[3] ETL-TOOLS.INFO. 2009: Definition and concepts of the ETL processes. Retrieved: 15
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November, 2009. URL:http://etl-tools.info/en/bi/etl_process.htm.
[4] EURACTIVE. 2009: Problémy s online nákupy po Evrop? trvají. Retrieved: 5
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URL:http://www.euractiv.cz/podnikani-a-zamestnanost/clanek/problemy-s-online-nakupy-po-
evrope-trvaji-006664.
[5] Favier, J. 2006: Europe's eCommerce Forecast: 2006 To 2011. Retrieved: 5
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[8] Mirdala, R. 2008. “Financial integration and financial deepening in the selected European
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[12] Simon, A., Shaffer, S. 2001. “Data Warehousing and Business Intelligence for E-commerce”.
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[13] Taniar, D. 2009. Progressive Methods in Data Warehousing and Business Intelligence: Concepts
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[15] WIKIPEDIA. URL: .
[16] Young, K., Srivastava, J. 2007. „Impact of social influence in e-commerce decision making”.
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