What Is
Management Information System?
What Is
Management Information System?
It is combination of three words i.e. Management, Information and System. To understand the concept MIS, we try to understand these three words.
Management: Various scholars have described ‘Management’ in various ways. But Koontz’s definition is widely considered, “Management is the art of getting things done through and with the efforts of other people.” However, a manager gets things done by performing basic managerial functions. These functions are: Planning, Organizing, Staffing, Directing and Controlling.
Information:
It is the second component of ‘MIS’. Information is a data which is processed and presented to decision makers and helps them in making decisions.
System:
The word ‘System’ is a set of elements that are inter-related and interdependent to achieve a common goal.
MIS: Definition:
After discussing three components of MIS, now we shall try to understand its definition. While discussing the components: Management, Information and System, it has been cleared that decision making is an important part of managerial functions. For taking adequate decisions, Management Information (MI) is necessary as it works as a vital input.
A system which consists of people, machines, procedures, databases and data models as its components is known as Management Information System. This system collects data from external and internal sources of an organization, analyses it and supplies management information to managers and helps them in making decisions. MIS follows the system approach in which output is greater than the sum total of input.
According to G.B. Davis, “MIS is a man or machine that provide information to support management in decision making process.”
Information Technology and MIS:-
Information Technology (IT) is sometimes called as a technological side of an information system, which includes hardware, software, networks and other devices. In other words, IT is a sub-system of an information system.
Nature and Scope of MIS:-
MIS is neither a pure science nor an art; it is recognized as a combination of both. It has been much analyzed on the issue whether MIS is management-oriented or computer-oriented. Applications in MIS are found in computers and because of this MIS may be described as Computer-Based MIS (CBMIS).
MIS Functions:-
1) Data is collected from various internal and external sources. Collected data may be manual or computerized.
2) Then data is processed.
3) Information is stored for future use.
4) Stored information is retrieved by users when required.
Characteristics of MIS:-
1) The information system follows the system’s approach to study the system and its performance in the light of purpose for which it has been developed.
2) MIS is management oriented.
3) MIS is designed according to the information needs of managers at different levels i.e. strategic planning level, management control level and operational control level.
4) MIS is future oriented.
5) Integration is essential for MIS because of its ability to produce meaningful information.
6) In MIS, common data flows provide an opportunity to avoid data redundancy, joining similar functions, data storage and retrieval process, wherever possible. The constitution of common data flows is economically and logically sound concept.
7) Long Term Planning is involved for developing MIS.
MIS is a sub system concept.
9) MIS is computerized.
10) MIS is user friendly.
Types of Information Systems
Information systems differ in their business needs. Also depending upon different levels in organization information systems differ. Three major information systems are
Transaction processing systems
Management information systems
Decision support systems
Office Information Systems
Figure 1.2 shows relation of information system to the levels of organization. The information needs are different at different organizational levels. Accordingly the information can be categorized as: strategic information, managerial information and operational information.
Strategic information is the information needed by top most management for decision making. For example the trends in revenues earned by the organization are required by the top management for setting the policies of the organization. This information is not required by the lower levels in the organization. The information systems that provide these kinds of information are known as Decision Support Systems.
Figure 1.2 - Relation of information systems to levels of organization
The second category of information required by the middle management is known as managerial information. The information required at this level is used for making short term decisions and plans for the organization. Information like sales analysis for the past quarter or yearly production details etc. fall under this category. Management information system (MIS) caters to such information needs of the organization. Due to its capabilities to fulfill the managerial information needs of the organization, Management Information Systems have become a necessity for all big organizations. And due to its vastness, most of the big organizations have separate MIS departments to look into the related issues and proper functioning of the system.
The third category of information is relating to the daily or short term information needs of the organization such as attendance records of the employees. This kind of information is required at the operational level for carrying out the day-to-day operational activities. Due to its capabilities to provide information for processing transaction of the organization, the information system is known as Transaction Processing System or Data Processing System. Some examples of information provided by such systems areprocessing of orders, posting of entries in bank, evaluating overdue purchaser orders etc.
Transaction Processing Systems
TPS processes business transaction of the organization. Transaction can be any activity of the organization. Transactions differ from organization to organization. For example, take a railway reservation system. Booking, canceling, etc are all transactions. Any query made to it is a transaction. However, there are some transactions, which are common to almost all organizations. Like employee new employee, maintaining their leave status, maintaining employees accounts, etc.
This provides high speed and accurate processing of record keeping of basic operational processes. These include calculation, storage and retrieval.
Transaction processing systems provide speed and accuracy, and can be programmed to follow routines functions of the organization.
Management Information Systems
These systems assist lower management in problem solving and making decisions. They use the results of transaction processing and some other information also. It is a set of information processing functions. It should handle queries as quickly as they arrive. An important element of MIS is database.
A database is a non-redundant collection of interrelated data items that can be processed through application programs and available to many users.
Decision Support Systems
These systems assist higher management to make long term decisions. These type of systems handle unstructured or semi structured decisions. A decision is considered unstructured if there are no clear procedures for making the decision and if not all the factors to be considered in the decision can be readily identified in advance.
These are not of recurring nature. Some recur infrequently or occur only once. A decision support system must very flexible. The user should be able to produce customized reports by giving particular data and format specific to particular situations.
Categories of Information System
Characteristics
Transaction Processing System
Substitutes computer-based processing for manual procedures.
Deals with well-structured processes. Includes record keeping applications.
Management information system
Provides input to be used in the managerial decision process. Deals with supporting well structured decision situations. Typical information requirements can be anticipated.
Decision support system
Provides information to managers who must make judgments about particular situations. Supports decision-makers in situations that are not well structured.
Office Information Systems
An office information system, or OIS (pronounced oh-eye-ess), is an information system that uses hardware, software and networks to enhance work flow and facilitate communications among employees. Win an office information system, also described as office automation; employees perform tasks electronically using computers and other electronic devices, instead of manually. With an office information system, for example, a registration department might post the class schedule on the Internet and e-mail students when the schedule is updated. In a manual system, the registration department would photocopy the schedule and mail it to each student’s house.
What is a Database?
One of the technology terms that most people have become accustomed to hearing either at work or while surfing the internet is the database. The database used to be an extremely technical term, however with the rise of computer systems and information technology throughout our culture, the database has become a household term.
The definition of a database is a structured collection of records or data that is stored in a computer system. In order for a database to be truly functional, it must not only store large amounts of records well, but be accessed easily. In addition, new information and changes should also be fairly easy to input. In order to have a highly efficient database system, you need to incorporate a program that manages the queries and information stored on the system. This is usually referred to as DBMS or a Database Management System. Besides these features, all databases that are created should be built with high data integrity and the ability to recover data if hardware fails.
Types of Databases
There are several common types of databases; each type of database has its own data model (how the data is structured). They include; Flat Model, Hierarchical Model, Relational Model and Network Model.
1 The Flat Model Database
In a flat model database, there is a two dimensional (flat structure) array of data. For instance, there is one column of information and within this column it is assumed that each data item will be related to the other. For instance, a flat model database includes only zip codes. Within the database, there will only be one column and each new row within that one column will be a new zip code.
2 The Hierarchical Model Database
The hierarchical model database resembles a tree like structure, such as how Microsoft Windows organizes folders and files. In a hierarchical model database, each upward link is nested in order to keep data organized in a particular order on a same level list. Forinstance, a hierarchal database of sales, may list each days sales as a separate file. Within this nested file are all of the sales (same types of data) for the day.
3 The Network Model
In a network model, the defining feature is that a record is stored with a link to other records – in effect networked. These networks (or sometimes referred to as pointers) can be a variety of different types of information such as node numbers or even a disk address.
4 The Relational Model
The relational model is the most popular type of database and an extremely powerful tool, not only to store information, but to access it as well. Relational databases are organized as tables. The beauty of a table is that the information can be accessed or added without reorganizing the tables. A table can have many records and each record can have many fields.
Tables are sometimes called a relation. For instance, a company can have a database called customer orders, within this database will be several different tables or relations all relating to customer orders. Tables can include customer information (name, address, contact, info, customer number, etc) and other tables (relations) such as orders that the customer previously bought (this can include item number, item description, payment amount, payment method, etc). It should be noted that every record (group of fields) in a relational database has its own primary key. A primary key is a unique field that makes it easy to identify a record.
Relational databases use a program interface called SQL or Standard Query Language. SQL is currently used on practically all relational databases. Relational databases are extremely easy to customize to fit almost any kind of data storage. You can easily create relations for items that you sell, employees that work for your company, etc.
Accessing Information Using a Database
While storing data is a great feature of databases, for many database users the most important feature is quick and simple retrieval of information. In a relational database, it is extremely easy to pull up information regarding an employee, but relational databases also add the power of running queries. Queries are requests to pull specific types of information and either show them in their natural state or create a report using the data. For instance, if you had a database of employees and it included tables such as salary and job description, you can easily run a query of which jobs pay over a certain amount. No matter what kind of information you store on your database, queries can be created using SQL to help answer important questions.
Storing a Database
Databases can be very small (less than 1 MB) or extremely large and complicated (terabytes as in many government databases), however all databases are usually stored and located on hard disk or other types of storage devices and are accessed via computer. Large databases may require separate servers and locations, however many small databases can fit easily as files located on your computer's hard drive.
Securing a Database
Obviously, many databases store confidential and important information that should not be easily accessed by just anyone. Many databases require passwords and other security features in order to access the information. While some databases can be accessed via the internet through a network, other databases are closed systems and can only be accessed on site.
What is e-commerce?
Electronic commerce or e-commerce refers to a wide range of online business activities for products and services. It also pertains to “any form of business transaction in which the parties interact electronically rather than by physical exchanges or direct physical contact.”
E-commerce is usually associated with buying and selling over the Internet, or conducting any transaction involving the transfer of ownership or rights to use goods or services through a computer-mediated network.3 Though popular, this definition is not comprehensive enough to capture recent developments in this new and revolutionary business phenomenon. A more complete definition is: E-commerce is the use of electronic communications and digital informationprocessing technology in business transactions to create, transform, and redefine relationships for value creation between or among organizations, and between organizations and individuals
What are the different types of e-commerce?
The major different types of e-commerce are: business-to-business (B2B); business-to- consumer (B2C); business-to-government (B2G); consumer-to-consumer (C2C); and mobile commerce (m-commerce).
What is B2B e-commerce?
B2B e-commerce is simply defined as e-commerce between companies. This is the type of e-commerce that deals with relationships between and among businesses. About 80% of e-commerce is of this type, and most experts predict that B2B ecommerce will continue to grow faster than the B2C segment. The B2B market has two primary components: e-frastructure and e-markets. E frastructure is the architecture of B2B, primarily consisting of the following:
E-markets are simply defined as Web sites where buyers and sellers interact with each other and conduct transactions.
The more common B2B examples and best practice models are IBM, Hewlett Packard (HP), Cisco and Dell. Cisco, for instance, receives over 90% of its product orders over the Internet.
What is B2C e-commerce?
Business-to-consumer e-commerce, or commerce between companies and consumers, involves customers gathering information; purchasing physical goods (i.e., tangibles such as books or consumer products) or information goods (or goods of electronic material or digitized content, such as software, or e-books); and, for information goods, receiving products over an electronic network.12
It is the second largest and the earliest form of e-commerce. Its origins can be traced to online retailing (or e-tailing).13 Thus, the more common B2C business models are the online retailing companies such as Amazon.com, Drugstore.com, Beyond.com, Barnes and Noble and ToysRus. Other B2C examples involving information goods are E-Trade and Travelocity.
The more common applications of this type of e-commerce are in the areas of purchasing products and information, and personal finance management, which pertains to the management of personal investments and finances with the use of online banking tools (e.g., Quicken).
What is B2G e-commerce?
Business-to-government e-commerce or B2G is generally defined as commerce between companies and the public sector. It refers to the use of the Internet for public procurement, licensing procedures, and other government-related operations. This kind of e-commerce has two features: first, the public sector assumes a pilot/leading role in establishing e-commerce; and second, it is assumed that the public sector has the greatest need for making its procurement system more effective.15
Web-based purchasing policies increase the transparency of the procurement process (and reduce the risk of irregularities). To date, however, the size of the B2G ecommerce market as a component of total e-commerce is insignificant, as government e-procurement systems remain undeveloped.
What is C2C e-commerce?
Consumer-to-consumer e-commerce or C2C is simply commerce between private individuals or consumers.
This type of e-commerce is characterized by the growth of electronic marketplaces and online auctions, particularly in vertical industries where firms/businesses can bid for what they want from among multiple suppliers.16 It perhaps has the greatest potential for developing new markets.
This type of e-commerce comes in at least three forms:
● Auctions facilitated at a portal, such as eBay, which allows online real-time bidding on items being sold in the Web;
● peer-to-peer systems, such as the Napster model (a protocol for sharing files between users used by chat forums similar to IRC) and other file exchange and later money exchange models; and
● Classified ads at portal sites such as Excite Classifieds and e Wanted (an interactive, online marketplace where buyers and sellers can negotiate and which features “Buyer Leads & Want Ads”).
Consumer-to-business (C2B) transactions involve reverse auctions, which empower the consumer to drive transactions. A concrete example of this when competing airlines gives a traveler best travel and ticket offers in response to the traveler’s post that she wants to fly from New York to San Francisco.
There is little information on the relative size of global C2C e-commerce. However,
C2C figures of popular C2C sites such as eBay and Napster indicate that this market is quite large. These sites produce millions of dollars in sales every day.
It is combination of three words i.e. Management, Information and System. To understand the concept MIS, we try to understand these three words.
Management: Various scholars have described ‘Management’ in various ways. But Koontz’s definition is widely considered, “Management is the art of getting things done through and with the efforts of other people.” However, a manager gets things done by performing basic managerial functions. These functions are: Planning, Organizing, Staffing, Directing and Controlling.
Information:
It is the second component of ‘MIS’. Information is a data which is processed and presented to decision makers and helps them in making decisions.
System:
The word ‘System’ is a set of elements that are inter-related and interdependent to achieve a common goal.
MIS: Definition:
After discussing three components of MIS, now we shall try to understand its definition. While discussing the components: Management, Information and System, it has been cleared that decision making is an important part of managerial functions. For taking adequate decisions, Management Information (MI) is necessary as it works as a vital input.
A system which consists of people, machines, procedures, databases and data models as its components is known as Management Information System. This system collects data from external and internal sources of an organization, analyses it and supplies management information to managers and helps them in making decisions. MIS follows the system approach in which output is greater than the sum total of input.
According to G.B. Davis, “MIS is a man or machine that provide information to support management in decision making process.”
Information Technology and MIS:-
Information Technology (IT) is sometimes called as a technological side of an information system, which includes hardware, software, networks and other devices. In other words, IT is a sub-system of an information system.
Nature and Scope of MIS:-
MIS is neither a pure science nor an art; it is recognized as a combination of both. It has been much analyzed on the issue whether MIS is management-oriented or computer-oriented. Applications in MIS are found in computers and because of this MIS may be described as Computer-Based MIS (CBMIS).
MIS Functions:-
1) Data is collected from various internal and external sources. Collected data may be manual or computerized.
2) Then data is processed.
3) Information is stored for future use.
4) Stored information is retrieved by users when required.
Characteristics of MIS:-
1) The information system follows the system’s approach to study the system and its performance in the light of purpose for which it has been developed.
2) MIS is management oriented.
3) MIS is designed according to the information needs of managers at different levels i.e. strategic planning level, management control level and operational control level.
4) MIS is future oriented.
5) Integration is essential for MIS because of its ability to produce meaningful information.
6) In MIS, common data flows provide an opportunity to avoid data redundancy, joining similar functions, data storage and retrieval process, wherever possible. The constitution of common data flows is economically and logically sound concept.
7) Long Term Planning is involved for developing MIS.
MIS is a sub system concept.
9) MIS is computerized.
10) MIS is user friendly.
Types of Information Systems
Information systems differ in their business needs. Also depending upon different levels in organization information systems differ. Three major information systems are
Transaction processing systems
Management information systems
Decision support systems
Office Information Systems
Figure 1.2 shows relation of information system to the levels of organization. The information needs are different at different organizational levels. Accordingly the information can be categorized as: strategic information, managerial information and operational information.
Strategic information is the information needed by top most management for decision making. For example the trends in revenues earned by the organization are required by the top management for setting the policies of the organization. This information is not required by the lower levels in the organization. The information systems that provide these kinds of information are known as Decision Support Systems.
Figure 1.2 - Relation of information systems to levels of organization
The second category of information required by the middle management is known as managerial information. The information required at this level is used for making short term decisions and plans for the organization. Information like sales analysis for the past quarter or yearly production details etc. fall under this category. Management information system (MIS) caters to such information needs of the organization. Due to its capabilities to fulfill the managerial information needs of the organization, Management Information Systems have become a necessity for all big organizations. And due to its vastness, most of the big organizations have separate MIS departments to look into the related issues and proper functioning of the system.
The third category of information is relating to the daily or short term information needs of the organization such as attendance records of the employees. This kind of information is required at the operational level for carrying out the day-to-day operational activities. Due to its capabilities to provide information for processing transaction of the organization, the information system is known as Transaction Processing System or Data Processing System. Some examples of information provided by such systems areprocessing of orders, posting of entries in bank, evaluating overdue purchaser orders etc.
Transaction Processing Systems
TPS processes business transaction of the organization. Transaction can be any activity of the organization. Transactions differ from organization to organization. For example, take a railway reservation system. Booking, canceling, etc are all transactions. Any query made to it is a transaction. However, there are some transactions, which are common to almost all organizations. Like employee new employee, maintaining their leave status, maintaining employees accounts, etc.
This provides high speed and accurate processing of record keeping of basic operational processes. These include calculation, storage and retrieval.
Transaction processing systems provide speed and accuracy, and can be programmed to follow routines functions of the organization.
Management Information Systems
These systems assist lower management in problem solving and making decisions. They use the results of transaction processing and some other information also. It is a set of information processing functions. It should handle queries as quickly as they arrive. An important element of MIS is database.
A database is a non-redundant collection of interrelated data items that can be processed through application programs and available to many users.
Decision Support Systems
These systems assist higher management to make long term decisions. These type of systems handle unstructured or semi structured decisions. A decision is considered unstructured if there are no clear procedures for making the decision and if not all the factors to be considered in the decision can be readily identified in advance.
These are not of recurring nature. Some recur infrequently or occur only once. A decision support system must very flexible. The user should be able to produce customized reports by giving particular data and format specific to particular situations.
Categories of Information System
Characteristics
Transaction Processing System
Substitutes computer-based processing for manual procedures.
Deals with well-structured processes. Includes record keeping applications.
Management information system
Provides input to be used in the managerial decision process. Deals with supporting well structured decision situations. Typical information requirements can be anticipated.
Decision support system
Provides information to managers who must make judgments about particular situations. Supports decision-makers in situations that are not well structured.
Office Information Systems
An office information system, or OIS (pronounced oh-eye-ess), is an information system that uses hardware, software and networks to enhance work flow and facilitate communications among employees. Win an office information system, also described as office automation; employees perform tasks electronically using computers and other electronic devices, instead of manually. With an office information system, for example, a registration department might post the class schedule on the Internet and e-mail students when the schedule is updated. In a manual system, the registration department would photocopy the schedule and mail it to each student’s house.
What is a Database?
One of the technology terms that most people have become accustomed to hearing either at work or while surfing the internet is the database. The database used to be an extremely technical term, however with the rise of computer systems and information technology throughout our culture, the database has become a household term.
The definition of a database is a structured collection of records or data that is stored in a computer system. In order for a database to be truly functional, it must not only store large amounts of records well, but be accessed easily. In addition, new information and changes should also be fairly easy to input. In order to have a highly efficient database system, you need to incorporate a program that manages the queries and information stored on the system. This is usually referred to as DBMS or a Database Management System. Besides these features, all databases that are created should be built with high data integrity and the ability to recover data if hardware fails.
Types of Databases
There are several common types of databases; each type of database has its own data model (how the data is structured). They include; Flat Model, Hierarchical Model, Relational Model and Network Model.
1 The Flat Model Database
In a flat model database, there is a two dimensional (flat structure) array of data. For instance, there is one column of information and within this column it is assumed that each data item will be related to the other. For instance, a flat model database includes only zip codes. Within the database, there will only be one column and each new row within that one column will be a new zip code.
2 The Hierarchical Model Database
The hierarchical model database resembles a tree like structure, such as how Microsoft Windows organizes folders and files. In a hierarchical model database, each upward link is nested in order to keep data organized in a particular order on a same level list. Forinstance, a hierarchal database of sales, may list each days sales as a separate file. Within this nested file are all of the sales (same types of data) for the day.
3 The Network Model
In a network model, the defining feature is that a record is stored with a link to other records – in effect networked. These networks (or sometimes referred to as pointers) can be a variety of different types of information such as node numbers or even a disk address.
4 The Relational Model
The relational model is the most popular type of database and an extremely powerful tool, not only to store information, but to access it as well. Relational databases are organized as tables. The beauty of a table is that the information can be accessed or added without reorganizing the tables. A table can have many records and each record can have many fields.
Tables are sometimes called a relation. For instance, a company can have a database called customer orders, within this database will be several different tables or relations all relating to customer orders. Tables can include customer information (name, address, contact, info, customer number, etc) and other tables (relations) such as orders that the customer previously bought (this can include item number, item description, payment amount, payment method, etc). It should be noted that every record (group of fields) in a relational database has its own primary key. A primary key is a unique field that makes it easy to identify a record.
Relational databases use a program interface called SQL or Standard Query Language. SQL is currently used on practically all relational databases. Relational databases are extremely easy to customize to fit almost any kind of data storage. You can easily create relations for items that you sell, employees that work for your company, etc.
Accessing Information Using a Database
While storing data is a great feature of databases, for many database users the most important feature is quick and simple retrieval of information. In a relational database, it is extremely easy to pull up information regarding an employee, but relational databases also add the power of running queries. Queries are requests to pull specific types of information and either show them in their natural state or create a report using the data. For instance, if you had a database of employees and it included tables such as salary and job description, you can easily run a query of which jobs pay over a certain amount. No matter what kind of information you store on your database, queries can be created using SQL to help answer important questions.
Storing a Database
Databases can be very small (less than 1 MB) or extremely large and complicated (terabytes as in many government databases), however all databases are usually stored and located on hard disk or other types of storage devices and are accessed via computer. Large databases may require separate servers and locations, however many small databases can fit easily as files located on your computer's hard drive.
Securing a Database
Obviously, many databases store confidential and important information that should not be easily accessed by just anyone. Many databases require passwords and other security features in order to access the information. While some databases can be accessed via the internet through a network, other databases are closed systems and can only be accessed on site.
What is e-commerce?
Electronic commerce or e-commerce refers to a wide range of online business activities for products and services. It also pertains to “any form of business transaction in which the parties interact electronically rather than by physical exchanges or direct physical contact.”
E-commerce is usually associated with buying and selling over the Internet, or conducting any transaction involving the transfer of ownership or rights to use goods or services through a computer-mediated network.3 Though popular, this definition is not comprehensive enough to capture recent developments in this new and revolutionary business phenomenon. A more complete definition is: E-commerce is the use of electronic communications and digital informationprocessing technology in business transactions to create, transform, and redefine relationships for value creation between or among organizations, and between organizations and individuals
What are the different types of e-commerce?
The major different types of e-commerce are: business-to-business (B2B); business-to- consumer (B2C); business-to-government (B2G); consumer-to-consumer (C2C); and mobile commerce (m-commerce).
What is B2B e-commerce?
B2B e-commerce is simply defined as e-commerce between companies. This is the type of e-commerce that deals with relationships between and among businesses. About 80% of e-commerce is of this type, and most experts predict that B2B ecommerce will continue to grow faster than the B2C segment. The B2B market has two primary components: e-frastructure and e-markets. E frastructure is the architecture of B2B, primarily consisting of the following:
E-markets are simply defined as Web sites where buyers and sellers interact with each other and conduct transactions.
The more common B2B examples and best practice models are IBM, Hewlett Packard (HP), Cisco and Dell. Cisco, for instance, receives over 90% of its product orders over the Internet.
What is B2C e-commerce?
Business-to-consumer e-commerce, or commerce between companies and consumers, involves customers gathering information; purchasing physical goods (i.e., tangibles such as books or consumer products) or information goods (or goods of electronic material or digitized content, such as software, or e-books); and, for information goods, receiving products over an electronic network.12
It is the second largest and the earliest form of e-commerce. Its origins can be traced to online retailing (or e-tailing).13 Thus, the more common B2C business models are the online retailing companies such as Amazon.com, Drugstore.com, Beyond.com, Barnes and Noble and ToysRus. Other B2C examples involving information goods are E-Trade and Travelocity.
The more common applications of this type of e-commerce are in the areas of purchasing products and information, and personal finance management, which pertains to the management of personal investments and finances with the use of online banking tools (e.g., Quicken).
What is B2G e-commerce?
Business-to-government e-commerce or B2G is generally defined as commerce between companies and the public sector. It refers to the use of the Internet for public procurement, licensing procedures, and other government-related operations. This kind of e-commerce has two features: first, the public sector assumes a pilot/leading role in establishing e-commerce; and second, it is assumed that the public sector has the greatest need for making its procurement system more effective.15
Web-based purchasing policies increase the transparency of the procurement process (and reduce the risk of irregularities). To date, however, the size of the B2G ecommerce market as a component of total e-commerce is insignificant, as government e-procurement systems remain undeveloped.
What is C2C e-commerce?
Consumer-to-consumer e-commerce or C2C is simply commerce between private individuals or consumers.
This type of e-commerce is characterized by the growth of electronic marketplaces and online auctions, particularly in vertical industries where firms/businesses can bid for what they want from among multiple suppliers.16 It perhaps has the greatest potential for developing new markets.
This type of e-commerce comes in at least three forms:
● Auctions facilitated at a portal, such as eBay, which allows online real-time bidding on items being sold in the Web;
● peer-to-peer systems, such as the Napster model (a protocol for sharing files between users used by chat forums similar to IRC) and other file exchange and later money exchange models; and
● Classified ads at portal sites such as Excite Classifieds and e Wanted (an interactive, online marketplace where buyers and sellers can negotiate and which features “Buyer Leads & Want Ads”).
Consumer-to-business (C2B) transactions involve reverse auctions, which empower the consumer to drive transactions. A concrete example of this when competing airlines gives a traveler best travel and ticket offers in response to the traveler’s post that she wants to fly from New York to San Francisco.
There is little information on the relative size of global C2C e-commerce. However,
C2C figures of popular C2C sites such as eBay and Napster indicate that this market is quite large. These sites produce millions of dollars in sales every day.
