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C H A P T E R 3
Managing digital business infrastructure
Table of contents
Learning outcomes 37
Management issues 37
Chapter at a glance 37
Suggested teaching and learning approaches 38
Learning outcomes
After completing this chapter the reader should be able to:
Outline the range of hardware and software technologies used to build a digital
business infrastructure
within an organisation and with its partners
Review the management actions needed to maintain service quality for users of digital
platforms
Management issues
The issues for managers raised in this chapter include:
What are the practical risks to the organisation of failure to manage the e-
commerce
infrastructure adequately?
How should we evaluate alternative models of delivering web services?
Chapter at a glance
Main topics
Digital business infrastructure components
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A short introduction to Internet technology
Focus
on
Web services, SaaS, cloud computing and service-oriented architecture (SOA)
Internet governance
Case studies
3.1 Innovation at Google
Suggested teaching and learning approaches
Note on Chapter 3
Based on feedback from lecturers, content introducing Internet technology used in previous
editions has been removed from this edition. If you want to cover this in lectures, please
reference slides from the previous edition.
Introduction key management issues of digital business infrastructure
Start by reviewing the need for general managers to be aware of technology management
issues. Why they are not simply the job of IT.
Supporting the growing range of digital business technology platforms
Cover the need to support different access modes listed in this section across desktop and
mobile. To this we can add social media apps, e.g. Facebook apps.
Digital business infrastructure components and a short introduction to
Internet technology
Discuss components to be managed in Figure 3.3
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Internet-based communications can be discussed via Figure 3.4
Look at worst-case scenario risks if outsourcing agreements fail. How much control is
required?
Management issues in creating a new customer-facing digital service
What needs to be set up if you are creating your own site, i.e. domain registration and
hosting.
Managing digital business applications infrastructure
Discuss the challenges of creating cross-business applications linking to partners via Figures
3.5 to 3.7.
Focus on Web services, SaaS, cloud computing and service-oriented
architecture (SOA)
Many services are delivered via SaaS based on cloud computing, so use Activity 3.2 and
examples to discuss the management challenges and solutions.
Focus on Internet governance
Open-source software
Case studies
Case study 3.1 Innovation at Google
Question
Explain how Google generates revenue and exploits innovation in digital technology to
identify future revenue growth. You should also consider the risk factors for future
revenue generation.
Googles revenue has traditionally been based predominantly on advertising which is divided
into these models:
Chaffey, Digital Business and E-Commerce Management, 6th edition,
Instructors Manual on the Web
Pay-per-click Sponsored links within the Google Search Results (and partner search
engines
such as AOL)
Pay-per-click and CPM model within partner sites of the content network which
Risk factors for future advertising revenue include:
Competition in bidding has traditionally driven up prices but this could fall as
companies
become more effective at optimising their investment through introducing
wastage.
Advertising revenue from the content network may fall as site owners explore other
ad
models and clickthrough rates on Google Ads fall as familiarity increases.
Questions for debate
Debate 3.1 Best-of-breed vs. single-source systems
Selecting best-of-breed applications from multiple system vendors for different digital
business applications such as enterprise resource planning, customer relationship
management, transactional e-commerce and supply chain management is a better
approach for an effective digital business infrastructure than using a single-vendor
solution.
Summary of arguments for are as follows:
More effective in delivering results
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Summary of arguments against are as follows:
Exercises
Self-assessment questions
1. What is the difference between the Internet and the World Wide Web?
Use TV analogy: Internet is the network for transmitting data globally, web is the method of
delivering the content (channels).
The Internet
The
Internet
refers to the physical network that links computers across the globe. It consists
2. Describe the two main functions of an Internet Service Provider (ISP). How do they
differ from applications service providers?
Internet Service Provider (ISP)
A provider enabling home or business users a connection to access the Internet (1). They can
Application server
An application server provides a business application on a server remote from the user.
3. Distinguish between intranets, extranets and the Internet.
Internet is public, intranet restricted to organisations employees, extranet has restricted access
beyond the company.
Intranet
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4. Describe the standards involved when a web page is served from a web server to a
users web browser.
Request page and deliver page (HTTP), transfer request and information (TCP/IP), render page
in browser (HTML).
TCP/IP
The Transmission Control Protocol is a transport layer protocol that moves data between
applications. The Internet protocol is a network layer protocol that moves data between host
computers.
HTTP (Hypertext transfer protocol)
HTML (Hypertext Markup Language)
HTML is a standard format used to define the text and layout of web pages. HTML files usually
have the extension .HTML or .HTM.
5. What are the management issues involved with enabling staff access to a website?
6. Explain the following terms: HTML, HTTP, XML, FTP
HTML (Hypertext Markup Language)
HTML is a standard format used to define the text and layout of web pages. HTML files usually
have the extension .HTML or .HTM.
HTTP (Hypertext transfer protocol)
HTTP or Hypertext transfer protocol is a standard which defines the way information is
transmitted across the Internet between web browsers and web servers.
XML or eXtensible Markup Language
File Transfer
Protocol
(FTP)
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7.
What is the difference between static web content written in HTML and dynamic
content developed using a scripting language such as JavaScript?
8. What software and hardware are required to access the Internet from home?
Essay and discussion questions
1. Without the development of the World Wide Web by Tim Berners-Lee, the Internet is
unlikely to have become a commercial medium. Discuss.
Suggested approach:
2. In the future the distinction between intranets, extranets and the intranet for
marketing purposes is likely to disappear. Discuss.
Suggested approach:
Define the differences between them.
3. Discuss the merits and disadvantages of locating company digital business services
inside a company, in comparison with outsourcing to an ISP or ASP.
Suggested approach:
Select digital business services, for example, site hosting and email management.
4. You are consultant to a small retailer interested in setting up a transactional e-
commerce site. Create a summary guide for the company about the stages that are
necessary in the creation of a website and the management issues involved.
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Suggested approach:
Domain name registration
Examination questions
1. You have been tasked with arranging Internet access for other employees in your
company. Summarise the hardware and software needed.
2. How would you explain to a friend what they need to purchase to access the World
Wide Web using the Internet? Explain the hardware and software needed.
3. Explain the term electronic data interchange. Is it still relevant to companies?
4. Describe how the following tools would be used by a company hosting a website:
HTML, FTP, RSS.
5. The existence of standards such as HTML and HTTP has been vital to the success
and increased use of the World Wide Web. Explain why.
6. What benefits to a business-to-business company does the XML standard offer
beyond those of HTML?
7. Explain why the digital business coordinator of a company might investigate the use
of applications service providers.
8. Explain the differences between intranet, extranet and the Internet from a digital
business perspective.
The Internet is used to communicate with all interested parties, while the intranet is to manage
Activity answers
Activity 3.1 Infrastructure risk assessment
Make a list of the potential technology problems faced by customers of an online retailer.
Consider problems faced by users of digital business applications which are either internal
or external to the organisation. Base your answer on problems you have experienced on a
website that can be related to network, hardware and software failures or problems with
data quality.
Some of the possible problems you may have identified are:
2. Website not available.
4. Ordered products not delivered on time.
6. Customers privacy or trust is broken through security problems such as credit cards
being
stolen or addresses sold to other companies.
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Activity 3.2 Opportunities for using web services by a B2B company
Develop a balanced case for the managing director explaining the web services approach
and summarising its advantages and disadvantages.
Advantages of web-service
Readily accessible from remote locations.
Disadvantages
Performance slower due to network and shared access.
Activity 3.3 Overcoming limited use of intranets and extranets in a B2B
Company
1. A B2B company has found that after an initial surge of interest in its intranet and
extranet, usage has declined dramatically. Many of the warning signs mentioned in the
KM (2002) article listed above are evident. Suggest ways in which the digital business
manager could achieve the following aims:
1. Increase usage.
2. Produce more dynamic content.
3. Encourage more clients to order (extranet).
1. Increasing usage.
The solution is similar to marketing any product, or indeed a website. First, the digital
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2. Produce more dynamic content.
The manager must check that suitable processes are in place to update static information such as
phone numbers if the intranet is not trusted it will not be used. An education programme
3. Encourage more clients to order.
Encouraging use of an extranet or intranet is similar to encouraging usage of a public facing
open website, that is, its managers:
Need to explain the value proposition (benefits)
Activity 3.4 Selecting open-source software
1. For the different alternatives facing a technical manager below, assess:
(a) Which is most popular (research figures).
(b) The benefits and disadvantages of the Microsoft solution against the alternatives.
(a) Popularity
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C.
Language
(b) Benefits
Benefits could include paid support and a good quality knowledge base. However, many
bulletin boards are available for open-source software. Disadvantages of using the Microsoft
solution are the cost and the time it is likely to take to communicate the problem and have it
solved in a new release.
2. Make recommendations, with justifications, of which you would choose for a small
medium or large organisation.
A. Operating system: Microsoft/Windows XP/Vista/Server or Linux (open-source) for
server and desktop clients.
B. Browser: Internet Explorer browser or rivals such as Mozilla Firefox or Google
Chrome which is part based on open source.
C. Programming language for dynamic e-commerce applications: Microsoft.Net or
independent languages/solutions such as the LAMP combination (Linux operating
system, Apache server software plus the MySQL open source database and scripting
languages such as PHP, Perl or Python).
A. Operating system.
B. Browser.
C. Programming language.
This is more difficult to establish. PHP is used on main free web servers such as Apache, so
possibly is more popular than ASP or ASP.Net.
For small organisations, using non-Microsoft products such as OpenOffice is appealing in terms
of price. For larger organisations, the lack of paid-for support and uncertainty of future support