Development of Web Information Systems: Conceptual Models and Examples from the Retail Financial Services Industry Christian Bauer *
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Arno Scharl */**
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* Electronic Commerce Network, Curtin University of Technology, Perth / Western Australia ** Information Systems Department, Vienna University of Economics, Vienna / Austria
Abstract Gaining competitive advantages becomes increasingly difficult in Electronic Commerce. Where a mere on-line presence was sufficient a few years ago to acquire the reputation of an “Internet pioneer”, more sophisticated technologies and functions are required today. Based on an evolutionary framework for the current and future development of Web Information Systems, several stages of on-line innovation are introduced and described. The commercial application and development strategies for each of these stages are outlined through conceptual models and real-world examples. These concepts provide not only an overview of the medium- and long-term development of commercial Web Information Systems, but also guidelines for successful Web Information Systems development strategies for each stage.
Introduction The development of Web Information Systems (WIS) for the presentation of information and the delivery of transactions has been a challenge to commercial and non-profit organisations since the emergence of the World Wide Web in the early 1990s. In this context, the term “development” really represents two sides of the same coin: On one hand the initial development (and the on-going maintenance afterwards) of Web Information Systems (= “building of systems”), and on the other hand the development of the World Wide Web over time as new technologies and tools are introduced (= “technological change of systems”). This paper will cover both aspects of the “development of Web Information Systems”. First, the changing technologies and user communication models are presented in a “stage model”. Secondly, for each of these stages, typical scenarios and characteristics of the Web Information Systems development process are discussed. This discussion draws upon the retail banking industry to provide illustration of these concepts. The categorisation into stages in Figure 1 introduces an evolutionary classification of the development of commercial Web Information Systems (compare Scharl, 1997; Scharl and Brandtweiner, 1998). Four stages are identified: 1. Static Web Information Systems (Stage one; a detailed description for each stage is given in a designated section below): Web servers deliver simple, static hypermedia compound documents to the Web browser. Information flows in one direction only – from the server to the client – since user feedback is disregarded at this early stage. 2. Dynamic Web Information Systems (Stage two): Planned analysis of implicit and/or explicit user feedback is introduced in stage two. 3. Adaptive Web Information Systems (Stage three): User feedback is being processed instantly within the expected Web Information System response time. User profiles based on preferences allow to personally address customers with dynamically generated documents, and improve communication with dynamic responses generated onthe-fly. 4. Agent Negotiation (Stage four): Principal-agent relations replace the traditional clientserver approach with agent software acting as clients and servers at the same time. The
"request-response" model predominant during the first three stages and the underlying protocol (HTTP) will be dissolved by the direct interaction of equal partners in an agentdriven communication network environment.
Figure 1: Evolution of Web Information Systems communication models and technologies The evolutionary framework of Web Information Systems development has been described in detail in previous publications (Bauer, Glasson, & Scharl, 1999; Bauer & Scharl, 1999). Each of the following sections covers one distinct Web Information Systems evolution stage. For each stage an example application from the retail banking industry is given first. Similar stage models to the one presented in Figure 1 have been observed in on-line retail banking (Bauer, 1998c). These examples illustrate the conceptual Web Information Systems development models, which are generalising the development approach for each stage. Finally, strategies to optimise the Web Information Systems development are discussed and implementations in commercial scenarios are outlined.
Stage One: Static Web Information Systems By disregarding user feedback for the design of Web Information Systems, interactivity is not available at stage one. This restriction naturally limits the potential applications for the designers and therefore stage one can usually only be found for small Web Information Systems. Indeed, the example Web Information System selected from the retail banking industry, as a demonstration case is the smallest of all Web Information Systems presented in this paper. Accordingly the model for the development strategy is the least complex and the typical technical and organisational infrastructure required is relatively easily implemented. Example Web Information System from Retail Banking: The Rock Building Society Figure 2 shows a screenshot of the homepage of a small Australian building society from Queensland, “The Rock Building Society” (http://www.therock.com.au). This Web site is very limited in scope, but provides the most important information for existing and potential customers. Some of the information, for example the “home loan information and interest rates” or the “savings interest rates”, has to be updated regularly. The feedback and queries
can only be sent to the organisation through e-mail, there is no user feedback through a Web interface.
Figure 2. Screenshot of the homepage of “The Rock Building Society” A (Comprehensive) Model of Development Strategies for Stage One Communication in static Web Information Systems flows into only one direction, from the server to the client, since user feedback is not analysed in this early stage of Web Information Systems. Nevertheless, the development of such Web Information Systems can be quite substantial in scale and requires a planned, organised and structured approach. Such methods have been suggested in the research of Nanard and Nanard (1995), Isakowitz et al. (1995), Bichler and Nusser (1996) or Scharl (1998). A classification of academic and commercial approaches can be found in Bauer (1998a). These and similar publishing approaches integrate a conceptual data and navigational model and are usually equally applicable for structured as well as unstructured information. Meta-data object type definitions and interactive, graphical tools provide designers with a framework and graphical notation during the development process.
Figure 3. Web Information System Design and Implementation The development process can be broken down into a very simplistic model with only two phases at this early stage. Figure 3 provides a graphical representation of this model with a planned Web Information Systems design process, supported by a Web Information Systems design method (e.g., eW3DT) and a suitable tool (e.g., WebDesigner) and leading to a static implementation on a simple Web server. Since user feedback is disregarded in the first stage, any redevelopment starts again with the design process, but no (formal) links between the implementation and the re-design are established. Scenarios of Commercial Web Information Systems Development in Stage One The development and implementation of a small Web Information System like the example from “The Rock Building Society” does not require major investments, the deployment of a sophisticated technical infrastructure or significant change in the corporate culture. Typically the development of such Web Information Systems is outsourced to Web consultants or Internet Service Providers due to the lack of Web design skills and Internet literacy within the organisation. In the absence of any automated processes (e.g., on-line forms and CGI-scripts) and without automated maintenance from existing databases, there is no need for a dedicated Web server and the Web Information System can be hosted by an external Internet Service Provider (ISP). Internet access within the organisation can still be delivered through a modem connection to the telephone system. Typical tools for the required tasks are graphical design software (e.g., Adobe PhotoShop), Web Information System and HTML editors (e.g., Microsoft Frontpage) and HTML converters (e.g., in Microsoft Word). The intensity of maintenance (i.e., how often are updates required) is the most important factor for the integration of the Internet activities into the existing organisational structure. Usually the Web Information Systems are designed in a manner that does not make much maintenance necessary to save cost. In that case the maintenance and Web Information System updates can be easily outsourced and kept in the project management style of the initial deployment phase. However, if regular and substantial updates are required, the responsible product managers (i.e., the owners of the information) have to be integrated closer into the maintenance process. Business processes and technical infrastructures have to be introduced that allow information owners to request and specify a fast update of appropriate Web Information System content. In the case of “The Rock Building Society”, the Web Information System is rather small and not technically sophisticated. However, it provides a lot of quickly outdating information (e.g., home loan and savings interest rates) generating the need for regular maintenance. A likely infrastructure for such a scenario is a Web Information System hosted by an external ISP, initially developed by an Internet consultant, who is still providing the technical expertise and quality assurance for the maintenance. The responsibility for the updates of the
critical content would be included into the job description of one (more or less) Internetliterate staff member.
Stage Two: Dynamic Web Information Systems Web Information Systems user feedback is introduced into the underlying communication models in stage two. This added functionality requires the analysis of explicit (i.e., with the cooperation of the Web Information System user) and/or implicit feedback (Bauer and Scharl, 1999). The data from explicit user feedback is obtained relatively easily (although the design of Web Information Systems becomes critical to ensure user participation) and well researched based on traditional disciplines, such as for example marketing research. However, user cooperation cannot be taken for granted and can be destructive to the desired “flow experience” of commercial Web Information System usage. Therefore implicit feedback becomes important, although it typically provides less information. The inclusion of interactivity and user feedback adds significant complexity to the Web Information Systems design, the development strategy and the required infrastructure. Example Web Information System from Retail Banking: The Bendigo Bank More sophisticated Web Information Systems, which include interactivity, presentation of product catalogues and detailed product information, and on-line transactions can be found at stage two. Figure 4 shows the basic interface of an on-line banking application, the “Bendigo Bank” (http://www.benbank.com.au). The functionality includes account summaries and balances, money transfer, bill payment and a variety of support functions, e.g. customer services, search, and so on. These functions require the extensive integration with Web Information Systems user feedback. A (Comprehensive) Model of Development Strategies for Stage Two To optimally utilise the potential of the more sophisticated communication model, stage two needs to be supported by new development strategies. In Figure 5, a closer integration of Web Information Systems development is achieved by extending the design and implementation phases with usage and analysis and combining all four phases to an on-going feedback cycle. The user feedback, represented by Web Information Systems usage behaviour and patterns (e.g., clickstreams) can be combined with additional explicit information that is available about particular users or user groups and fed into tool-based Web Information Systems analysis methods. Gathering, reporting, and visualisation of implicit feedback usually requires more sophisticated approaches (Scharl and Bauer, 1998) and is still underutilised in many commercial Web Information Systems despite the availability of an array of suitable software solutions (Malchow and Thomsen, 1998). Minimum requirements for such tools are data mining capabilities for maintenance of large databases with user records, statistical analysis for aggregation of available information and visualisation for human-computer interfacing and establishing causal relationships. The integration of analysis with design methods is still missing in almost all development methodologies and tools.
Figure 4. Screenshot of the on-line banking (demonstration) of the “Bendigo Bank” WebMapper, a Java-based prototype for visualising individual and aggregated access patterns, represents an effort to overcome this shortcoming by interpreting log-file data of HTTP servers and matching the results to the Web Information System design represented in the eW3DT methodology (extended World Wide Web Design Technique; Bauer and Scharl, 1999). Scenarios of Commercial Web Information Systems Development in Stage Two The higher complexity of Web Information Systems at stage two leads to increased requirements for the technical infrastructure and the need for closer organisational integration of the Internet into the existing business processes. In most cases, simple project management by itself is not capable of delivering the full commercial potential of the Internet and providing a satisfactory managerial framework for a functioning Web business. The product managers have to be strongly involved in the development, implementation and on-going maintenance of the Web Information System, making outsourcing more difficult and the deployment of tools, which allow end-users (information owners without high Internet literacy) to update the Web Information System content directly, a necessity. To stay competitive in a fast moving industry – and the Web is certainly reducing time-to-market and lead times of innovators – a development strategy as outlined in section 0 has to be adopted. A consistent, evolutionary development cycle incorporating Web Information Systems user feedback (see Figure 5) also requires the adoption of the appropriate development methods and integrated tools.
Figure 5: Integrated feedback cycle for developing dynamic Web Information Systems On-line transactions, like the functionality offered in on-line banking in Figure 4, also require a much more sophisticated information infrastructure for their implementation. Dedicated Web servers, protected by firewalls and other security concepts, and permanently connected to the Internet with sufficient bandwidth are only starting points. The connection between the Web interface in the Client/Server-environment and the existing banking applications, usually hosted on legacy systems, can be a cumbersome and expensive task (Bauer, 1998b).
Stage Three: Adaptive Web Information Systems The move from stationary to automatically generated Web Information Systems content overcomes currently dominant communication patterns and sets stage three apart from the previous stages in the Web Information Systems evolution. While the user feedback has a (more or less) important impact on the Web Information System design in stage two of the Web Information Systems evolution, this impact does not become apparent immediately. The Web Information System implementation can be called stationary or pre-defined in so far, as the hypermedia structure and content does not react to implicit and/or explicit feedback in real time. Adaptive Web Information Systems add an automatic element to Web Information Systems implementation by introducing immediate responsiveness. User feedback causes instantaneous regeneration of content, presentation, and navigational structure. Example Web Information System from Retail Banking: CitiBank Australia CitiBank Australia (http://www.citibank.com.au/)does not only provide complete on-line banking similar to the application presented in section 0, but also goes a first step towards adaptive Web Information Systems with a personalised news channel. The information to create the underlying user model is generated with explicit user feedback through an on-line form (see the screenshot in Figure 6). The user information is utilised to design the news and product information according to the user preferences and the organisation’s marketing strategies.
Figure 6. Screenshot of the personalisation form at the Web Information System of CitiBank Australia A (comprehensive) Model of Development Strategies for Stage Three Integrated solutions for designing and analysing Web Information Systems become a necessity in stage three, and explicit and implicit user feedback is processed simultaneously in order to update the underlying user model. These tools are responsible for generating the documents as well as the customised link structure on-the-fly in the design step of the adaptive sub-process(es) of Figure 7 (“implementation” in this context refers to document presentation; i.e., the rendering of HTML or XML (Extensible Markup Language) documents). Required software components rely heavily on adaptive technologies like neural networks, genetic algorithms, natural language generation (Milosavljevic and Paris, 1998), case based reasoning (Finnie and Wittig, 1998), or related soft computing approaches. While the feedback loop for the development cycle of adaptive Web Information Systems does not change so much in structure but in the level of sophistication as outlined above, the processes inside the implementation and usage phase undergo a dramatic change. Based on a central user model with information about that particular user (e.g., stereotypes or overlay domain models), the Web Information System is automatically designing (generating) and implementing (presenting) adaptive documents. These sub-processes do not require human intervention since they are providing users with an instant response, but are planned by the Web Information Systems developers in the design and implementation phases. In the analysis phase the information obtained from the Web Information Systems usage is complemented with previously recorded data and matched with the underlying, pre-defined user model by Artificial Intelligence (e.g., case-based reasoning, neural networks) or statistical (e.g., cluster and regression analysis) methods. It goes without mentioning that these automated feedback loops and the resulting adaptive hypertext documents occur at a much higher frequency than the underlying "manual" Web Information Systems development cycles at stage three.
Figure 7. Adaptive sub-processes responsible for document generation and presentation Scenarios of Commercial Web Information Systems Development in Stage Three The adaptive Web Information Systems of stage three cannot be developed without a clear understanding of the appropriate parameters on which the adaptive behaviour has to rely on. The definition of these parameters requires a detailed economic and marketing analysis as well as an assessment of the technical feasibility to gather the required information into a user model. The requirement of adaptive Web Information Systems to provide an immediate response to user feedback leads to the need of integrated, visual design methods and tools for the creation of commercial applications. These methods may be derived from existing Web Information Systems modelling methods by extending their syntactic structure to dealing with adaptive systems. Tools will be required to incorporate new additions to the repository of Web technologies, such as Artificial Intelligence, and Meta-data information models, to make these technologies available for commercial applications. Because of the difficulty and complexity of adaptive Web Information Systems any technological and organisational infrastructure can only be as good as the integration between the (technical) implementation and (commercial) functionality. Any integration has to overcome two distinct obstacles, the useability of development tools for end-users and senior management and the innovative design of the Web Information System according to market needs.
Stage Four: Agent Negotiations Software agents may be categorised according to their functionality and architectural attributes into information, cooperation and transaction agents (Scharl, Bauer and Kaukal, 1999; Schubert, Zarnekow and Brenner, 1998). The enhanced functionality of autonomous agents negotiating with each other over a network means reinventing World Wide Web communication. Agents as pro-active, intentional systems promise to further increase flexibility and will radically change inherent characteristics of Web Information Systems. Principal-agent relations will replace the traditional client/server approach with agent software acting as clients and servers at the same time (Hansen and Tesar, 1996) depending on their principal's preferences, the requirements of their tasks, and predefined coordination mechanisms. The predominant “request-response” model of the Web and HTTP will be
dissolved by the direct interaction of equal partners in an agent-driven communication network environment. This becomes most apparent in the automation of complex negotiation mechanisms and models for commercial applications (Bichler and Segev, 1998).
Figure 8. Screenshot of “rate alert”, a feature of the mortgage service from E*Trade Example Web Information System from Retail Banking: Bankrate.com As (commercial) agent systems are still in a very premature state, actually deployed applications featuring the complete functionality of future software agents are not available yet. The example from “E*Trade” (https://trading.etrade.com/ratealert.html) in Figure 8 is therefore only illustrating the potential of such agents rather than already resembling a full agent. Currently, the “rate alert” feature triggers the electronic mailing of a mortgage service according to market parameters (loan amount, percentage change in interest rates or loan fees, etc.). A more sophisticated (information) agent system would, for example, allow to configure more market parameter (e.g., interest rate falls below a certain, individually set barrier) and the triggered action (e.g., e-mail notification with a two weeks chart history). Another (transaction) agent would negotiate according to the principal’s strategy in the financial markets and constantly change the investment portfolio by entering into agreements with other buyers and sellers (human traders and/or other agents). Similar, early examples of agent implementation in the Financial services industry can be found at “Ernst & Young” (for employment-based savings plans) and “Bankrate.com”. A Model of Development Strategies for Stage Four
The transformation of the Client/Server-infrastructure into an agent environment with birespectively multi-lateral interaction between independent participants in electronic markets requires the extension of the development strategy to include the Web Information Systems development at both ends. Figure 9 incorporates the feedback loops for the development of two (commercial) negotiation systems interacting in an electronic market. The developers on both ends will complete the same cycle of design, implementation, usage and analysis when improving their agent. The design of a negotiation agent deals with the same challenges as the Web Information Systems from the earlier stages, but additionally has to address increased infrastructure requirements of transaction agents and, most importantly, to fulfil the principal's strategies. The reasons for the complexity of the implementation phase of agents have already been described above. In the usage phase agents are less passive compared to earlier stages of Web Information Systems evolution, searching actively for negotiation partners in electronic market environments. It is the usage phase were the agents and their underlying development loops are tangent to each other, with their interaction facilitated by an electronic market or Web Information Systems infrastructure. After the usage, principals will evaluate results and review the negotiation processes. The outcomes and findings of this analysis phase will then be fed back into the design of the next agent. Scenarios of Commercial Web Information Systems Development in Stage Four At this point of time, no prevalent design and/or analysis approaches for agent negotiation can be identified, mainly because of the complexity of such a task and the insecurity in the nature of this upcoming information infrastructure. Negotiation processes between business entities are characterised by high degrees of unpredictability, complexity, and strategic importance to organisations (Beam and Segev, 1997) and it can only be assumed that a number of design and analysis methods for commercial utilisation will be made available with the progress of this technology.
Figure 9. Dual feedback loops connected via standardised transaction environments
Conclusion Through the analysis of the conceptual models and development scenarios, a list of attributes that characterise the development of Web Information Systems for each stage was generated. These attributes are summarised in Figure 10.
Attributes Web Information Systems User feedback Transactions User models Using HTTP Infrastructure Connected Staff Internal Server Bandwidth Customised tool Security Management Outsourcing emphasis Manager involvement Business Processes Maintenance Cost Profit-impact
Stage 1
Stage 2
Stage 3
Stage 4
ü
ü
ü
ü
ü ü
ü
ü
ü ü ü
Few No Low No Medium
Most Likely Medium Maybe Very High
All Yes High Yes Very High
All ? High ? Very High
High Low Few Little Low Low
Medium Medium Some Regularly High Medium
Low High Most Auto Very High High
? High Most Always ? ?
Figure 10. Typical attributes at each individual stage The successful development of Web Information Systems becomes critical for organisations competing for business and consumers on the Internet. Competitive Web Information Systems development is only feasible with a clear understanding of the underlying technical infrastructure and the associated characteristics and features. This paper provides an evolutionary framework to conceptualise the underlying infrastructure and functionality of Web Information Systems and outlines appropriate strategies for the development of Web Information Systems for each stage. Commercial Web Information Systems developers can plan the (long-term) evolutionary path of their Web Information System and gain insight into requirements and scenarios of appropriate technical and organisational infrastructures for current and future Web Information Systems.
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