E- Commerce
Unit – I
Table of Contents
• Introduction of e-Commerce
• Internet & other Novelties
• Model for e-
Commerce Transactions
• Online Commerce
Solutions
Introduction of e-
Commerce
• E-Commerce stands for “Electronic
Commerce”. It initially started during the
Berlin Airlift, Germany in 1948 when big
corporate started taking order for goods
electronically with the help of telephones
and other private networks.
Introductio
•
n Definition
• What is E-Business?
• Key Drivers of E-Com
• Impact of E-Commerce
• Benefits of E-Commerce for
Organizations
• Benefits of e-commerce to
consumers
• Benefits of e-commerce to
society
Definition
• E-Commerce is a very vast field and can
be applied in majority of applications and
areas. Hence, there is
no agreed upon definition of it. Its
definition may vary from context to
context.
• It also pertains to “any form of business
transaction in which the parties interact
electronically rather than by physical
exchanges or direct physical contact”.
What is E-Business?
• “E-business is the conduct of business
on the Internet, not only buying and
selling but also servicing customers and
collaborating with business partners”.
• “E-business includes customer service
(e-service) and intra-business tasks”.
• “The development of intranet and
extranet is part of e-business”.
Primary processes
are enhanced in
E-business
Customer- Internal
Production
focused management
processes, processes
processes
Key Drivers of E-
•Com
Technological factors
• Political factors
• Social factors
• Economic factors
Some others factors at organizational level:
Organizational culture
Commercial benefits
Skilled and committed workforce
Requirements of customers and suppliers
Impact of E-
Major areas that e-com has effected:
Commerce
• Marketing
• Computer sciences
• Finance and accounting
• Economics
• Production and operations
management
• Production and operations
management (manufacturing)
Benefits of E-Commerce for
Organizations
• International marketplace
• Operational cost savings
• Mass customization
• Enables reduced inventories and
overheads by facilitating ‘pull’-type
supply chain management
• Lower telecommunications cost
• Digitization of products and
processes
Digitization of products and
processes
• 24/7 access
• More choices
• Price comparisons
• Improved delivery processes
• An environment of competition
LIMITATIONS OF E-
COMMERCE
• Lack of sufficient system security, reliability,
standards and communication protocols.
• Rapidly evolving and changing technology
• Under pressure to innovate
• Facing increased competition
• Problems with compatibility of older and ‘newer’
technology
• Computing equipment
• Cost of access to the Internet
• Cost of computing
• equipment
A lack of trust because they are interacting with
INTERNET & OTHER
NOVELTIES
• Internet is the world wide network of computers that
help one assist in sharing resources, instant
messaging, emails, videoconferencing, social
networking, e-commerce applications, etc. Everyone
knows about the internet and I don’t think there is any
need to explain the internet.
The Intranet
The Extranet
The Intranet
• An intranet is a computer network that
Internet Protocol technology to securely
uses
share any part of an organization's
information or network operating system within
that organization.
• An intranet can be understood as a private analog
of the Internet, or as a private extension of the
Internet confined to an organization.
Benefits of Intranet
• Workforce productivity
• Time
• Communication
• Web
• publishing
• Business operations and management
• Cost-effective
• Enhance collaboration
• Cross-platform capability
• Built for one audience
• Promote common corporate culture
Immediate updates
The Extranet
• An extranet is a computer network that
allows controlled access from the
outside, for specific business or
educational purposes. An extranet can be
viewed as an extension of a company's
intranet that is extended to users outside the
company, usually partners, vendors, and
suppliers.
Advantages
• Exchange large volumes of data using
Electronic Data Interchange (EDI)
• Share product catalogs exclusively with
trade partners
• Collaborate with other companies on
joint development efforts
• Jointly develop and use training programs with other
companies
Disadvantages
• Extranets can be expensive to implement and
maintain within an organization (e.g., hardware,
software, employee training costs), hosted
internally rather
if than by an application
provider. service
• Security of extranets can be a concern when hosting
valuable or proprietary information.
MODEL FOR E-
COMMERCE
•TRANSACTIONS
E-commerce transactions can be modeled
by identifying the partners directly
transaction.
involved Thisinis the most convenient and useful way of
building models for e-com transactions. Some significant
models are as follows:
• Business-to-Business e-Commerce (B2B)
• Business-to-consumer (B-to-C)
• Business-to-Government (B-to-G)
• Consumer-to-Consumer (C-to-C)
• Consumer-to-Government (C2G) model
• Consumer-to-Business (C-to-B)
• E-Government
Business-to-Business e-Commerce
(B2B)
• It is companies buying from and selling to each other
online. But there's more to it than purchasing. It's
evolved to encompass supply chain management as more
companies outsource parts of their supply chain to their
trading partners. Business- to- business commerce
includes a broad range of intercompany transactions,
including wholesale trade as well as company purchases
of services, resources,
technology, manufactured parts and components,
and capital equipment.
• Examples:
Intel selling microprocessor to Dell.
Heinz selling ketchup to McDonalds.
Web-based
B-to-B
includes:
Direct selling
and support E-procurement Information sites
to business
Business-to-consumer (B-to-C)
• It is defined as the exchange of products,
information or services between business and
consumers in a retailing relationship. Some of the
first examples of B-to-C e-commerce were
amazon.com and dell.com in the USA and
lastminute.com in the UK. In this case, the ‘C’
represents either consumer or customer. The B2C
model involves transactions between business
organizations and consumers.
The major benefits of B2C are as follows:
• B2C e-commerce reduces transactions costs.
• Model the cost of the product is reduced as we
can eliminate the middle men.
• Major thing in B2c model is customer care.
Pre-Cautions of B2C E-commerce:
• Check for digital certificates of the site and it
hacker free.
• Check for shipping price.
• See the previous service going through the
reviews of the old customers
• Purchasing with the appropriate cards.
Business-to-Government (B-to-G)
• It is the exchange of information, services and
products between business organizations and
government agencies on-line. It refers to the use
of the Internet for public procurement, licensing
procedures, and other government- related
operations. This may include:
• E-procurement services
• A virtual workplace
• Rental of on-line applications and
databases
Consumer-to-Consumer (C-to-C)
• Inthis category consumers
interact directly with other
consumers.
simply C2C between
commerce is private
individuals or They
consumers. exchange information
such as:
• Expert knowledge
• Opinions
Consumer-to-Government (C2G)
model
• In this model, an individual consumer interacts
with the government. For example, a consumer
can pay his income tax or house tax online.
The transactions involved in this case are C2G
transactions. Examples where consumers provide
services to government have yet to be
implemented. It is not that popular approach and
is quite rare. A possible example could be when a
hacker is offering his services to the government
for defence against cyber terrorism.
Consumer-to-Business (C-to-B)
• This is the exchange of products,
information or services from individuals to
business. A classic example of this would
be individuals selling their services to
businesses. Consumer-to- business (C2B)
transactions involve reverse auctions,
which empower the consumer to drive
transactions.
E-Government
E-Government (short for electronic government, also known as
e-gov, digital government, online government, or connected
government) is digital interactions
between a government and citizens (G2C),
government and businesses/ (G2B),
government Commerce and employees, between
government and governments
and /agencies
also (G2G).
The e-Government delivery can be
models briefly
summed up as:
• G2C (Government to Citizens)
• G2B (Government to Businesses)
• G2E (Government to Employees)
• G2G (Government to Governments)
Disadvantages of e-gov
The main disadvantages concerning e-government is the lack of
equality in public access to the internet, reliability of
information on the web, and hidden agendas of government
groups that could influence bias public opinions,
and impacts on and factors,
vulnerability
economic, social,
to cyber attacks, and disturbances
political to the status quo
in these areas.
•Hyper-surveillance - Once e-government begins to
develop and become more sophisticated, citizens will be
forced to interact electronically with the government on a
larger scale. This could potentially lead to a lack
of privacy for civilians as their
government obtains more and more information on them.
•Cost - Although “a prodigious amount of money has been
spent” on the development and implementation of e-
government, some say it has yielded only a mediocre
product.
•Digital divide - An e-government site that provides web access
and support often does not offer the “potential to reach many users
including those who live in remote areas, are homebound, have low
literacy levels, exist on poverty line incomes”. It is the division
between people having or not having communication technology.
•False sense of transparency and accountability - Opponents of e-
gov online governmental transparency is dubious because it is
maintained by the themselves. Information can be added or
removed from the public eye.
Advantages of e-gov
•E-democracy - One goal of e-government will be
greater citizen participation. Through the internet, people
from all over the country caninteract with politicians
or public servants and make their voices
heard. Blogging and interactive surveys will
allow politicians or public servants to see the views of the people
they represent on any given issue. Chat rooms can place citizens
in real-time contact with elected officials, their offices or
provide them with the means to replace them by interacting
directly with public servants, allowing voters to have a direct
impact and influence in their government.
•Paperless office - Proponents of e-government argue that
online government services would lessen the need for hard copy
forms.
• Speed, efficiency & convenience - E-
government allows citizens to interact with
computers to achieve objectives at any
and any location, and eliminates the
time
necessity for travel to
government
physical
agents sitting behind desks and windows.
•e-participation - Recent trials of
e- government have been met with
and with increasing frequency, and
acceptance
people, who traditionally display youngminimal
interest in government affairs, are drawn to e-
voting procedures.
Government-to-Government (G2G)
model
This model involves transactions between 2 governments. For
example, if American
government the oil from the Arabian
wantstransaction involved
the to by government, are categorized in the
may also be defined as the G2Gelectronic
model.transactions
It between two
governments within a nation like centre & state govt. or state &
state information sharing, not commerce in most of the occasions.
•Vertical Govt. Integration – e-commerce among govt. agencies
up and down and local levels. Example: County Councils –
dealing with the Dept. of the Environment.
•Horizontal Govt. Integration – e-commerce among agencies
within one level. Example: National Roads Authority dealing with
the Heritage council.
Government-to-Consumer
(G2C) model
In this model, the government transacts with an
individual consumer. For example, a government can
enforce laws pertaining to tax payments on individual
consumers over the Internet by using the G2C model.
•Does not fit well at all within the traditional supply-
and-demand e-commerce notion.
•Paying taxes, registering vehicles,
grant applications, CAO applications, etc.
•Big drive to get all local government services
on web.
Government-to-Business
(G2B) model
This model involves transactions between a government and
business organizations. For example, the government plans
to build a fly over. For this, the government requests for tenders
from various contractors. Government can do this over the
Internet by using the G2B model.
• Not a large e-commerce market.
•Example – Govt selling research services through
Universities and Institutes of Technology to SMEs (Small and
Medium sized Enterprises).
•Holding auctions and selling off used / confiscated
items (most times, you must be a
“business” to participate in these auctions).
• Ordinance Survey selling detailed survey data to businesses.
Business-to-Government
(B2G)model
In this model, the business houses transact with the government over
the Internet. For example, similar to an individual consumer, business
houses can also pay their taxes on the Internet.
•Lockheed Martin providing aviation products, satellites,
naval systems, and services to US Dept of Defence (80% of
its revenue).
• Fairly large e-commerce model in terms of revenue.
•Most U.S. government entities (for sure at the federal level)
won’t do business with your business if you can’t do it
electronically.
•In Europe – governments use e-tenders to get companies to
supply goods and services.
M-commerce
Mobile commerce is the buying and selling of goods and
services through wireless technology-i.e. handhelddevices
such as cellular telephones and personal digital assistants
(PDAs). Mobile Commerce is any transaction, involving the
transfer of ownership or rights to use goods and services,
which is initiated and/or completed by using mobile access to
computer-mediated networks with the help of an electronic device.
Mobile Ticketing – Tickets can be
sent to mobile phones using a variety
of technologies. Users are then able to
use their tickets immediately, by presenting
their phones at the venue.
Ticketscan be bookedand cancelled
on the mobile device with the help of
service
simple Example: orPeople
application downloads, getting the
by accessing movie
WAPtickets
portals or
providers.
of various travel agents or direct
Mobile vouchers, coupons and loyalty
cards - Mobile ticketing technology can also be
used for the distribution of vouchers,
coupons, and loyalty cards. These items
are represented by a virtual token that is sent to the mobile phone. A
they had presenting
customer the traditional token.withStores
a mobile phone one ofmay send atcoupons
these tokens to
the point of
customers
the using sale
location-based
receives the sameservices
benefitstoas determine
if when
customer is nearby.
Information Services – Example: Commuters getting PNR inquiry on
mobiles by doing sms on 139. Another example is getting tram arrival
time on their mobile through sms.
Examples of it are News, Stock quotes, sport scores, financial records,
traffic reporting, etc.
Mobile Banking – Banks and other financial institutions use mobile
commerce to allow their customers to access account information and make
transactions, such as purchasing stocks, remitting money. This service
is often referred to as Mobile Banking, or M-Banking.
Example: Account holders getting sms after every transaction from their
banks on their mobile.
Content purchase and delivery - Currently, mobile content purchase
and delivery mainly consistsof the sale of ring-tones, wallpapers, and
games for mobile phones. The convergence of mobile phones,
portable audio players, and video players into a single device is
increasing the purchase and delivery of full-length music tracks and
video. The download speeds available with 4G networks make it
possible to buy a movie on a mobile device in a couple of seconds.
Mobile marketing and advertising - mobile marketing refers to
marketing sent to mobile devices. Companies have reported that they
see better response from mobile marketing campaigns than from
traditional campaigns. Mobile campaigns must be based on the
global Content Generation or what is called Generation C and four
other 'C's: Creativity, Casual Collapse, Control, and Celebrity.
Mobile Purchase - Catalog merchants can accept orders from
customers electronically, via the customer'smobile device. In some
cases, the merchant may even deliver the catalog electronically,
rather than mailing a paper catalog tothe customer. Some
merchants provide mobile websites that are customized for the smaller
screen and limited user interface of a mobile device.
ONLINE COMMERCE SOLUTIONS
Domain Name - online stores must have a unique web
address, All which makes registering a domain name an important
ecommerce solution. When you buy a domain name, you become
the sole owner of that web address and your online business has
a place to call home. personal information will also be
provided
Your to the WHOIS database, where it will be available to the public.
You can keep this information private by electing Private Registration when
you register your domain name.
Ecommerce Shopping Cart Software - Ecommerce shopping cart
software encompasses many aspects of online stores, including
setting up inventory, managing orders from customers, delivery of
products, and customer service. Choosing an ecommerce solution is a
difficult process - many different options exist, including open source,
licensed, and hosted solutions. Determine which ecommerce solution is right
for your business, instead of allowing the solution to determine your business
model.
Ecommerce Web Hosting- Professional Web hosting for online stores is
an ecommerce solution that offers several benefits. When you work with a
web hosting company, you can choose an ecommerce Web hosting package
that satisfies your individual needs for space, bandwidth,
merchandising and even design. Another benefit a Web hosting
company should provide online stores: peace of mind that comes from
knowing customer support is available to assist you 24/7, should
problems or questions arise regarding your online store.
Professional Web Design - Looks may not be everything, but they
are definitely something to consider when starting online stores.
Ecommerce websites can be created with easy-to-use web design
templates or with the help of a professional web designer .
Merchant Account - No matter howimpressive your site is in
terms of design and usability, you may lose customers if you cannot
accept credit card payments. Online stores that cannot process credit
card transactions are fighting an uphill battle, as the vast majority of
online shoppers favor credit card payments. In order to accept
credit card payments online, ecommerce websites need a merchant account to
take money from the bank, and an online gateway to take the money from the
merchant account.
Online Payment Gateway Integration
A payment gateway is an e-commerce application service provider
service that authorizes payments for e-businesses, online retailers, bricks and
clicks, or traditional brick and mortar. It isthe equivalent of a
physical point of sale terminal located in most retail outlets. Payment
gateways protect credit card details by encrypting
information, card numbers,
sensitive such as to ensure that information
credit
is passed securely between the customer and the merchant and also between
merchant and the payment processor.Payment Gateway is a part
of an e-commerce service that empowers the payment mode for
electronic-business. Payment Gateway encrypts confidential information
that transfers in a safe path between a customer and therespective
merchant. A paymentgateway holds a soul of any e-commerce
application. Some famous payment gateways are: PayPal, Google
Checkout, Pay-Me-Now, iBill, etc.
Example of online payment gateway: WorldPay
(formerly RBS WorldPay) is a payment processing
company. It provides payment services for mail order
and internet retailers, as well as of sale
transactions. Customers a point
mix are
of multinational,
multichannel retailers, with the majority being small
business merchants. WorldPay started as an electronic
payment provider called Streamline in 1989 in the UK
but has extended into Mail Order/Telephone
"unattended" payments and handling
Order, secure payments
over the internet through merger and acquisition
of several other companies.
Shipping Gateway Integration
Shipping gateway integration includes
organizations that are responsible for shipping.
Example: FedEx Corporation originally known as
FDX Corporation, is a services
logistics company, based in the States with
headquarters United
in Memphis, Tennessee. The name
"FedEx" is a syllabic abbreviation of the name of
the company's original air division, Federal
Express, which was used from 1973 until 2000.
Inventory Management
Inventory means a list compiled for some formal purpose, such as the
details of an estate going to probate, or the contents of a house let
furnished.
Inventory management is primarily about specifying the shape and
percentage of stocked goods. It is required at different locations within a
facility or within many locations of a supply network to proceed the
regular and planned course of production and stock of materials.
Scope of inventory management concerns the fine lines between
replenishment lead time, carrying costs of inventory, asset
management, inventory forecasting, inventory valuation, inventory
visibility, future inventory price forecasting, inventory,
available physical space for physical management,
replenishment, returns and defective goods and quality
inventory,
demand forecasting.
Online Shopping carts
Shopping cart software is software used in e-commerce to assist
people making purchases online, analogous to the American English
term 'shopping cart'. In British English it is generally known as a
shopping basket, almost exclusively shortened on websites to
'basket'. The software allows online shopping customers to
accumulate a list of items for purchase, described metaphorically
as "placing items in the shopping cart". Upon checkout, the
software typically
calculates a total for the order, including shipping and
the
handling (i.e. postage and packing) charges and
associated taxes, as applicable.
Online shopping carts refer to the facility provided by the e-
com websites to purchase and add multiple items at the same time.
Shopping cart software can be generally categorized into two
main categories:
Licensed software: The software is downloaded and then installed on a
Web server. This is most often associated with a one-time fee,
although there are many free products available as well. The main
advantages of this option are that the merchant owns a license
and therefore can host it on any Web server that meets the server requirements,
and that the source code can often be accessed and edited to customize the
application.
•Hosted service: The software is never downloaded, but rather is provided
by a hosted service provider and is generally paid for on a monthly/annual
basis; also known as the application service provider
(ASP) software model. Some of these services also charge a
percentage of sales addition to the monthly fee. This model
often has predefined templates that a user
in can choose from to
customizetheir look and feel.Predefined templates limit how much
users can modify or customize the software with the advantage of having the
vendor continuouslykeep the software up to date for security
patchesas well as adding new features.
Customer Order Tracking systems
Order TrackingSoftware is build to
improve customer service levels making
management of inquiries / orders more
easy and reliable. With Order Tracking
Software you can track your inquiries /
orders online. You can easily search old
orders and get the latest updated status
on it.
Features of Order Tracking
Software are:
• Easy management of daily inquiries /orders
• Up-to-date information on each and every inquiry
• User friendly Graphical User Interface
• Search any inquiry anytime and from anywhere
• Find old inquiries in milliseconds
• Reminder scheduler helps remember follow ups
• No paperwork involved
•Restricted number of intended users like User,
Management and Administrator
• Secured login and password for every user
• Different features for different users
Tailor Made Payment Gateway
Payment gateways protect credit card details by
encrypting sensitive information, such as credit
card numbers, to ensure that information
passed securely between is the customer and
merchant and also betweenthemerchant and
payment processor. th
Payment gateways can be customized according to e the
user’s needs. Hence providing more benefits &
flexibility to the user.
Tailor Made Payment Gateway
Security features of payment
gateways:
•Since the customer is usually required to enter personal
details, the entire communication of'Submit Order' page (i.e.
customer - payment gateway) is often carriedout
through HTTPS protocol.
•To validate the request of the payment page result, signed request
is often used - which is the result of the hash function in which
the parameters of an application confirmed by a «secret word»,
known only to the merchant and payment gateway.
• To validate the request of the payment page result,
sometimes IP of the requesting server
•has to be verified.
Secure Transactions
Secure Electronic Transaction (SET) was a standard
protocol for securing credit card transactions over insecure
networks, specifically, the Internet. Secure Electronic
Transactions (SET) is an open protocol which has the potential to
emerge as a dominant force in the securing of electronic
transactions.
SET is jointly developed by Visa and MasterCard, in
conjunction with leading computer vendors such as IBM, SET is
an open standard for protecting the privacy, and
ensuring the authenticity, of electronic transactions.
Key features to meet the business
requirements, SET incorporates the
following feature-
• Confidentiality of information
• Integrity of data
• Cardholder account authentication
• Merchant authentication
Auctioning and Online Shop
portals
Overstock - Why it’s good: Big traffic numbers
and a Verified Registered User policy that has
prevented fraud from Day 1 (are you listening
eBay?). Fees are value for money and the
fosters a tight community. We also liked the sitefact that
payment options are more varied.
eBid - eBid has consistently kept its place as one of the
top alternatives to eBay since its launch in 1999.
Available in 14 countries, traffic does vary between sites,
but in general, traffic is high.
BlueJay - BlueJay is extremely popular
with sellers and buyers for very
reason. 100% good and submits
It’s
listings free
to Google shopping, fromallwhich the
majority of buyers come.
eCrater - We had difficulty deciding who was
better out of BlueJay and eCrater. BlueJay won
because of its superior design, however we
strongly encourage you to try both.
Online Auction - Online Auction has one low
monthly fee with no listing or final value fees.
However, as part of the latest site upgrade,
sellers can page $10 to get their auctions
“featured” on Google shopping.
CQOut - CQOut is very big in the UK
and saw it’s listings grow by 100% in
2007. CQOut’s fees are significantly lower
than eBay and if you don’t make a sale, you
don’t need to pay anything.
