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Ecommerce: Technologies That Do Steal!
Fay Cobb Payton, College of Management,
North Carolina State University
Decision Line, March 2001 13
ECOMMERCE
KENNETH E. KENDALL, Feature Editor, School of Business-Camden, Rutgers University
The other side of security is privacy. In order to make your Web site more secure,
you must ask the user or customer to give up some privacy. In the Internet world,
where someone can invade your privacy by taking a snapshot of your computer
screen without you even being aware of it, we need to be on guard. Without resorting to
trickery, companies still exercise a great deal of power over the data their customers
provide them. The same tenets of ethical and legal behavior apply to Web site design as
to the design of any traditional application which accepts personal data from customers.
However, the Web allows the data to be collected faster and allows different data to be
collected (such as the browsing habits of customer). In general, information technology
makes it possible to store more data and distribute it more widely. In this month’s
feature article, Fay Cobb Payton explores three technologies—personalization techniques,
e-marketing technologies, and analytics—that impact privacy in our world today.
Ecommerce: Technologies That
Do Steal!
Fay Cobb Payton, College of Management,
North Carolina State University
Industry forecasts have all suggested
that the growth of ecommerce is clear
and will be directly related to businessto-
business (B2B) and business-to-consumer
(B2C) activity from the United
States, Europe, Asia-Pacific, and Japan.
While Turner (2000) suggests that security
is the dominant concern of electronic commerce,
information privacy—as implied by
Turner—cannot be overlooked as organizations
move rapidly to enable B2B and
B2C online marketplaces. Thus, the balance
among privacy, security, and social participation
stand to provide major challenges
to ecommerce. In fact, Mason, Culnan,
Ang, and Mason (2001) contend that “new
technologies, in particular ecommerce applications,
will greatly augment individuals’
and organizations’ ability to collect and
use information about people and their behavior”
(p. 209).
Ecommerce Challenges the
Notion of Individual Privacy
While noting that ecommerce is not limited
to online purchasing (Kendall, 2000),
emerging and current technologies stand
to challenge current definitions of privacy,
which Mason et al. (2001) defines as the
state of being free from intrusion in one’s
private life or affairs. Despite this notion,
information technology and ecommerce
applications have proven to erode such freedom.
Among these applications are personalization,
emarketing, and analytics (PC
Magazine, 2001), which have combined to
define ecustomer relationship management
(eCRM). What do these applications
enable organizations to do, and how does
each contest privacy as defined by Mason
et al. (2001)?
Emerging Technologies
Impacting Privacy
Technologies that enable us to accomplish
more in less time can have other implications.
In this column, I will examine three
of them: personalization technologies,
EMarketing technologies, and analytics.
Personalization technologies
Personalization technologies enable organizations
to tailor the individuals’ Web experience
to one’s preferences. For example,
if you purchased a book from
BarnesandNoble.com, the Website can suggest
another novel in a similar category
based on your online behavior. Personalization
applications are growing significantly
in the banking, cable, retail, and
Fay Cobb Payton
is an assistant professor of information
technology at
North Carolina State University.
She earned a Ph.D. in
MIS from Case Western Reserve
University where she
was a General Electronic Fellow.
Her research focuses on privacy, data management,
e-marketplaces, health care, and
diversity. She has served as the chair and member
of the PhD Project IS Student Association as
co-sponsored by the KPMG Peat Marwick Foundation
(1996-2000). Dr. Payton has served as
a reviewer for MIS Quarterly, Decision Sciences,
the Academy of Management Conference,
the AIS Conference and ICIS. She has published
in and/or has publications forthcoming in the
Communications of the ACM, Computer
Personnel, Computers and Society, Health
Care Management Review, Information and
Management, and Information Journal of
Technology Management. Dr. Payton has
worked with private and public organizations
including IBM, PricewaterhouseCoopers,
Quintiles Transnational, KPMG and several state
medical societies. She is a member of the Academy
of Management, Decision Science Institute,
ACM and other professional societies.
email: fay_payton@ncsu.edu
14 Decision Line, March 2001
Kenneth E. Kendall
School of Business-Camden
Rutgers University
Camden, NJ 08102
(856) 225-6586
fax: (856) 424-6157
ken@thekendalls.org
http://www.thekendalls.org
numerous other industries. Most notably,
these applications can make use of a range
of tools that include data mining, databases,
cookies, and rules-based forecasting and
inferencing. All of which engender dynamic
transformation of organizational
activities while extending the traditional
meaning of what is the organization and
where is its location.
How does this challenge current privacy
definitions? A recent comment by
Forrester Research public policy analyst Jay
Stanley indicates the two faces of
ecommerce with regard to information
privacy. He concluded: “Data is like gold.
There will be 1,001 temptations for
ecommerce companies to cash in on this”
(http://www.informationweek.com
listserv, January 2001).
To this end, data are an asset that typically
is unseen on the balance sheet, but it
has value once it is collected, analyzed, and
potentially redistributed to customers in
some meaningful manner. The caveat is
whether or not the customer demonstrates
favorable conduct by responding to the
newly suggested book from the
BarnesandNoble site. While the customer
frequently does not request these additional
data steams, the use of an electronic profile
is common practice, quite unbeknownst to
the customer—thereby resulting in what
some consider a “probing” in personal affairs
and preferences.
EMarketing technologies
EMarketing technologies, acting as decision
support tools, enable organizations to develop
more targeted marketing programs
based on likely customer interests. Once
these interests are determined, organizations
can use targeted direct mailings such
as tailored Web sites with banner ads and
emails to entice customers to purchase a
given product. The idea is to increase customer
response through a directed effort
and reduce the costs associated with mass
campaigns.
Given the decision support functionality
associated with emarketing technologies,
the organization must make a
conscious decision to target a customer.
That is, the technology merely offers a recommendation
but does not act on its own
suggestion as an expert system might.
Thus, customers are correct at pointing to
the decision makers in the organization and
not the technology per se that is enabling
the use of their personal data. While the
organizational decision (as recommended
by the technology) may be to extend a discount
to regular purchasers of Dell Computers
who are also known consumers of
Compaq goods and services, corporate
policy should offer some guidance on “how
far” an organization can go without compromising
privacy.
In many cases, organizations display
a privacy policy link on their Web sites.
Typically, these online statements include
information on collection of data; secondary
use of data, children, and the Internet;
and cookies (just to name a few). These
privacy policies, however, are widely diverse
and often limited in detail about current
organizational practices and treatment
of customer data.
Analytics
Lastly, analytics help organizations gain
insight into the customer. Often characterized
by the presence of touch points, organizations
can gather volumes of data about
customers including purchase patterns and
demographics via touch points (e.g., call
centers, online help, and help desks). Touch
points offer customers a myriad of techniques
to interact with the organization.
Data from these touch points can be warehoused
for trend analyses and forecasting
that are based on years of accumulated statistics.
Once deployed and evaluated for
their usefulness, analytic tools can facilitate
Web traffic and market segmentation. It is
worth noting that analytics, in conjunction
with ecommerce, has redefined CRM as
eCRM.
Unresolved Privacy Issues in
B2C Ecommerce and Emerging
Emarketplaces
What remains at issue regarding privacy?
Misuse and errors in customer information
prevail as overriding concerns along with
security issues. These concerns not only
impact the B2C domain, but the emergence
of emarketplaces will also test information
sharing agreements among cooperative
partners that have, to some degree,
evolved from a completely competitive
strategic model. Further, questions regarding
the proper balance among privacy, information
technologies, security and legal
issues, is at the forefront of IT professionals’
concerns as well as the new Bush administration
(http://www.information
week.com/819/prezletter.htm).
Finally, industry analysts’ projections
of ecommerce growth are consistent.
Ecommerce is here to stay, with
emarketplaces, global markets, and business
models transforming the way business
is conducted and data are treated. In
this context, former definitions of privacy
are proving to no longer apply as information
technologies redefine organizational
practices and business models.
References
InformationWeek.com News. (2001).
http://www.informationweek.com/
819/prezletter.htm, January 8.
Kendall, K. (2000). Ecommerce: Thou shall
not steal. Decision Line, 31(4), 12.
Mason, R. O., Culnan, M. J., Ang, S., & Mason,
F. (2001). Privacy in the age of the
internet. In G. Dickson & G. DeSanctis
(Eds.), Information technology and the future
enterprise: New models for managers.
Saddle River, NJ: Prentice Hall.
Turner, E. C. (2000). Public key infrastructure:
Is this digital ID system having an
identity crisis of its own?. Decision Line,
33(6), 15-17.
PC Magazine (2001). http://www.pcmag.
com, Know Who I Am, January 16,
2001.