Electronic Commerce

Uma Lakshmi K

Electronic Commerce
Distributing, buying, selling, marketing and Servicing of products or services over electronic systems such as computer and other networks. It is an electronic business application aimed at commercial transactions.

Electronic Commerce
The seamless application of information and communication technology from its point of origin to its end point along the entire value chain of business processes conducted electronically and designed to enable the accomplishment of a business goal

Information Era ² Dramatic Roles 
1955 1974 Electronic Data Processing (EDP)  1975-1994  1995-2014

MIS & Strategic Information Era Internet

backdrop of E-Commerce Internet 
Late 1800s;Emergence of large business organizations  1950 s; use of computers in Business  1960 s; information exchange on punched cards and magnetic

tapes. But only large trading corporations could afford it as the translating formats were specific to companies. Majorly freight and shipping companies 

Late 1969 s ARPANET,US Defence dept

control weapon systems and transfer research files  1970 s EDI; the Senior of E-Commerce

e-mail on USENET by students of Duke and North Carolina University 1989. Every year apart from information. with the new structure based on four Network Access Points (NAP). who sell network access rights directly to large customers and indirectly to small firms through ISPs (Internet Service Providers)  Potential of Internet not realized initially. NSF (National Science Foundation) permitted two commercial e-mail services. billions of dollars change hands over internet. MCI-mail and CompuServe  1991 1994. within 30 years it has become one of the most amazing technologies and social accomplishment of 20th century.. privatization of Internet.backdrop of E-Commerce Internet   1979. . each operated by a separate company called Network Access Providers.

Marc Andreessen at NCSA (National Centre for Super computing Applications) developed web browser for X Windows called Mosaic and 1994 he started his own company later known as Netscape Communications .backdrop of E-Commerce World Wide Web  1990. .   1991. 1993. Switzerland. 50 web servers. Tim Berner Lee at CERN (Conseil Europeen pour la Recherche Nucleaire). the European Laboratory for Particle Physics in Geneva. 1993. WWW publicly available from CERN. GUI web browser for X Windows and Macintosh available. proposed HTML to enable exchange of information among high-energy physics community.

Netscape navigator (Mozilla) 2000 s Dot-com burst E-Commerce now is more of a norm than exception . World Wide Web Organization was announced by CERN and MIT.1994. to guide technical developments and standards for the evolution of the web. 1994 s Amazon.com . the pioneer of E-Commerce 1995. which later was known as W3C (World Wide Web Consortium) .

8 million hosts 2.3 million domain names  2007.E-Commerce some milestones  1992 1 million hosts  1993 50 web servers  1993.155 hosts 25 million users 90% users are from USA  1997.12.InterNic created to handle domain name registration  1996.12.1350 million users .1.

Dimensions of E-Commerce  Business  Technology  Society . national Sovereignty. .E-Commerce has challenged the concept of privacy. intellectual property. and governance.

E-Commerce  Technology mediated exchanges between parties (Individuals & Organizations or within organizations) electronically facilitated. E-Business  Digital enabling of transactions and processes in a firm involving Information Systems. .

2001 . September . 1300 employees laid off.00 / share Jan. 1996. December. 1999 Person of the year on Time Magazine.VP at a wall street investment Bank     read that Internet is likely to grow at 2300% per year. 2008 Top Web billionaire of the world .$545 million net loss in the last quarter itself. Sr.Jeff Bejos .Testimonials from Amazon  1994 .3 million titles of Books No touch and feel required by customers. $113.

ATM interfaces) Technology mediated transactions more than human contact. Intra and inter organizational activities that exchange in Business environment. .Characteristics of e-commerce  Exchange of Digitized Information between     Parties communication. coordination for the transmission of goods/ services It is technology enabled (web browsers.

 Richness of the data: Text. graphic. and Video  Dynamic (continuous change)  Customization and interactivity.Characteristics of e-commerce  Universal Standards shared by all nations. . sense and respond listening to customers in a new way. Audio.  Information density with technology reducing the cost of Information and raising the quality of information.

retailers.  Disintermediation:Reduced intermediaries between customer and supplier  Improved customer service(reduced lead time)     . and customers is easy.Advantages of E-Commerce Complements traditional business 24 X 7 operations Global reach Relatively less cost of acquiring. serving. and retaining customers  An extended enterprise including suppliers.

(Any time interaction can be closed) Easy to observe and track customer/ consumer behavior Network economics: In Information centric industries gain more mileage.Advantages of E-Commerce  A technology based customer interface with GUI      and interactivity which does not need unnecessary follow ups Interaction controlled by customer. of branches due to increasing online transactions. Friction free commerce . Financial Institutions can reduce the no.

Difficulty in integrating online and off-line processes. highly expensive jewellery.      antiques may be difficult to inspect from remote location.Disadvantages of E-commerce  Perishable foods. Cultural and legal obstacles. it is difficult to calculate ROI Micro transactions may include more transaction charges than product price.(cyber laws not sufficient enough and security concerns) . With emerging and dynamic technology like ECommerce. Recruitment and retention of technical people.

Disciplines concerned with Ecommerce Management science Computer science Economics Sociology Information System Marketing Finance & Accounting .

network effect Mix of click and brick Strategic follower strategy .E-Commerce I (1995 onwards) 2000) Vs E-Commerce II (2001  Technology driven  Revenue growth emphasis  Venture capital financing  Ungoverned  Entrepreneurial  Disintermediate  Perfect markets  Pure online strategy  First mover advantage  Business Driven  Earning and profit        emphasis Traditional financing Strong regulation and governance Large traditional firms Strengthening intermediation Imperfect with markets. brands.

survived after 2000  B2C sales growing by 45 50% per year. .Fact file  Nearly $125 billions of venture capital went into thousands of dot-coms by 1999.  Only 15% of the dot-coms since 1995.

.Network effect Goes by Metcalfe s law which postulates that the value of a network grows by the square of number of participants.

entrepreneurs must find ways to show differentiation in product and service. the web world may expect one     price . Constantly changing prices not realistic. . Security concerns among people Internet yet to reach third world beyond US and other developing countries.Challenges for e-Commerce  One world. Nearly 65% of transactions stop at shopping cart level because of customer uncertainties.

Categories of E-Commerce B B C B2B C C2B B2C C2C / (P2P) .

or between a wholesaler and a retailer.  The volume of B2B (Business-to-Business) transactions is much higher than the volume of B2C transactions . such as between a manufacturer and a wholesaler.B2B  Business-to-business (B2B) describes commerce transactions between businesses.

Sometimes referred to as e-procurement sites. in some cases. Sometimes a company Web site serves as the entrance to an exclusive extranet available only to customers or registered site users. where a company purchasing agent can shop for supplies from vendors.B2B B2B Web sites can be sorted into: ‡ Company Web sites. . bid to make a purchase at a desired price. Company sites can be thought of as round-the-clock mini-trade exhibits. ‡ Product supply and procurement exchanges. some serve a range of industries and others focus on a niche market. since the target audience for many company Web sites is other companies and their employees. and. effectively e-tailing to other businesses. request proposals. Some company Web sites sell directly from the site.

.B2B (contd. and other features. discussion groups. ‡ Brokering sites that act as an intermediary between someone wanting a product or service and potential providers. Equipment leasing is an example. These vertical portal sites have a broader purpose than the procurement sites (although they may also support buying and selling). product listings. .) ‡ Specialized or vertical industry portals which provide a "subWeb" of information.

database. and methodologies as well as transaction software. ‡ Many B2B sites may seem to fall into more than one of these groups. ‡ Another type of B2B enterprise is software for building B2B Web sites. Models for B2B sites are still evolving.B2B Commerce ‡ Information sites (sometimes known as infomediary ). . including site building tools and templates. These include specialized search sites and trade and industry standards organization sites. which provide information about a particular industry for its companies and their employees.

first-served basis. . While B2C merchants sell on a first-come.B2B ‡ Business-to-business (B2B) e-commerce is significantly different from business-to-consumer (B2C) e-commerce. most B2B commerce is done through negotiated contracts that allow the seller to anticipate and plan for how much the buyer will purchase. In some cases B2B is not so much a matter of generating revenue as it is a matter of making connections with business partners.

was first announced in February 2000 Worldwide Retail Exchange (WWRE).B2B Commerce Supplier management Procurement Inventory Management Sales and marketing activities Industry sponsored marketplaces (ISMs) & consortia-led exchanges Covisint. Roebuck & Co. an e-marketplace backed by the major auto makers General Motors. Ford Motor Co. and Oracle. and Albertson's. GNX was also formed in early 2000. among others.. and DaimlerChrysler. It began with 57 original investors. Carre-four. Its founding companies included Sears. Walgreen.. including companies such as Coca-Cola and Procter & Gamble .     Transora is a consortia-led exchange serving packaged goods manufacturers and the retail industry. was formed in early 2000 by a group of retailers including the Gap. Target. Best Buy.

 Ex: Amazon.Sify. sometimes also called Business-to-Customer) describes activities of businesses serving end consumers with products and/or services.com .B2C  Business-to-consumer (B2C.  B2C stands for "business-to-consumer" and applies to any business or organization that sells its products or services to consumers over the Internet for its own use.com Shopping.

a web site should be a standard part of the promotional and advertising mix for every business. Typically. ‡ These days. along with other tools such as Yellow Pages. individual sites can be created within minutes of the retailer selecting a template and supplying graphics such as logos. newspaper advertising and signage. other than internet access.B2C Commerce ‡ Using the latest internet application technology. . retailers will pay only a modest monthly rental charge and retailers require no specialist hardware or software.

B2C Advantages of B2C e-commerce B2C e-commerce has the following advantages: ‡ Shopping can be faster and more convenient. . so acquiring and keeping new customers is difficult. Challenges faced by B2C e-commerce ‡ The two main challenges faced by B2C e-commerce are building traffic and sustaining customer loyalty. ‡ Broadband telecommunications will enhance the buying experience. ‡ Call centers can be integrated with the website. Due to the winner-take-all nature of the B2C structure. ‡ Offerings and prices can change instantaneously. ‡ In addition. many smaller firms find it difficult to enter a market and remain competitive. online shoppers are very price-sensitive and are easily lured away.

thanks to developments in template-based online stores which are based on packaged applications that are delivered over the internet. content management and member management. order baskets.B2C ‡ B2C (Business to Consumer): Refers to a business communicating with or selling to an individual rather than a company. payment processing. with each store effectively renting its own copy of the applications. B2C e-commerce jumped from $11. ‡ Doing business online no longer requires a huge investment by retailers. .2 billion in 1998 to $31. ‡ As nearly all online stores will require the same functions: catalogues.2 billion in 1999. it makes sense for those components to be created once and shared by all stores.

‡ The consumer reviews the bids and selects the company that will complete the project. . ‡ A student wants to fly from London to New York. The beauty of the Internet is that it brings together a large number of customers to create a marketplace that a number of airlines (that will have to otherwise fly with empty seats) will be interested in. but has only £200 ($320) in the bank to pay for this round trip. seeking airlines that are willing to offer the transatlantic round trip for £200 or less. They put up an ad in an Internet C2B site.C2B ‡ A consumer posts his project with a set budget online and within hours companies review the consumer's requirements and bid on the project.

 Ex: ebay. to construct these e-commerce systems because of their diverse nature.C2B  Many analysts state that C2B and C2C e- commerce will thrive in the near future. It is a challenging task.com . however.

2003. xv). They are often described as Peer-to-Peer (P2P) . p.C2C ‡ C2C applications are any transactions between and amongst consumers (QUT School of International Business.

. Gnutella is a software application that permits consumer to share music with one another directly without the intervention of third party.C2C  A variation in C2C is P2P.

G2C (Government-to-Citizen). C2G (Citizen-to-Government) are other forms of ecommerce that involve transactions with the government--from procurement to filing taxes to business registrations to renewing licenses. G2E (Government-to-Employee). B2G (Business-toGovernment). G2B (Government-to-Business). .Other Miscellaneous commerce ‡ G2G (Government-to-Government).

The website claims that through Ebay. . the company has continued to grow both in size and popularity.au.com. â practically anyone can trade practically anythingâ ? (Ebay. 1995-2004). Ebay is now considered one of the most successful C2C eBusinesses ever. 2000. p. ‡ Seek.au and ‡ CareerOne. Since that time. ‡ Other examples of Consumer-to-Consumer applications are service and employment websites such as ‡ Monster. Employers can advertise on these websites and potential employees can contact their organization for an interview. 1995-2004).109).com is an online auctioning site that facilitates the trade of privately owned items between individuals (May. The company began in September 1995 when Pierre Omidyar decided to establish the first online marketplace (Ebay.C2C ‡ Ebay.com. These websites provide a valuable service to consumers looking for jobs.com.

Channel management system Enterprise wide computing (1990 present) Internet and WWW (1995 present) . spreadsheets. HRP Integrated Finance. messaging Enterprise Automation ERP. HR. CRM. manufacturing Industrial system Automation SCM. DBMS Workgroup Automation Document sharing Project Management E-mail. Design Desktop automation Word . client/server computing (1980 present) Business Application Transaction Automation Payroll and Accounts Receivables Business Function Automation Marketing.Internet and evolution of Corporate Computing Computing Technology Mainframes ( 1950 1975) Mini computers (1970 80) Personal Computer (1980 present) LAN .

and sets the transmission in motion and at the receiving end takes the data off the wire and prepares it for the computer. . protocols govern format.Protocol  A network protocol is a set of rules for communication between computers. timing. this software prepares data for transmission. sequencing and error control.  At the sender system.

but as a structured set of modules. it is refereed to as protocol architecture / protocol stack  OSI protocol stack (7 layers) Open System Interconnection theoretical in nature TCP/IP protocol stack ( 5 layers) Transmission Control Protocol/ internet Protocol More realistic .Protocol architecture  If the protocol does not come as a single module.

OSI protocol stack (7 layers) Application Presentation Session Transport Network Data link Physical .

TCP/IP Protocol Architecture Application layer Transport layer (TCP) Network layer (IP) Data link Physical .

Protocol stack  Application layer: user interface  Presentation layer: removes all file and character formats. synchronization with checkpoints in the data . Encryption (decryption) and compression (decompression)of data  Session layer: dialog control (half-duplex or full duplex).

flow control Network layer: routing of packets from source system to destination system between diff. connection control. Physical layer: transmission media . segmentation and reassembly. adds physical addresses of systems in frame s header.Transport layer: service point addressing (ports). networks.no role) Data link layer: framing data. error control. (same network.

of frame with physical address of source & destination T2.Headers and trailers Except for application layer and physical layer.  Data link: H2 at the beg.signifies end of frame  Network: H3 IP address  Transport : H4 port address  Session layer:  Presentation: . everywhere headers are added to data by each layer..

Protocols in Application + presentation + session  SMTP  FTP  TELNET  DNS  SNMP  NFS and RPC  TFTP .

Ex: 128. Has two parts: net-id and host-id No two physical networks on the internet have same net-id.11. No two systems on a physical network have same host-id. It is a unique identification on internet.21 . which makes routing easy.IP addressing  A 32 bit number used to identify the host      systems on the internet.2.

Backbone controlling organizations  AT & T  Sprint  ANS Advanced Networking Services  Uunet  BBN planet .

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