UNIT : III

WEB TECHNOLOGY AND COMMERCE (MCSE 201) 

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INTRODUCTION TO COMMERCE :

Commerce is the exchange of something of value between two entities. That "something“ may  be
goods, services, information, money, or anything else the two entities consider to have value.
Commerce is the central mechanism from which capitalism is derived.
INTRODUCTION TO ELECTRONIC COMMERCE :  

Electronic commerce, commonly known as e-commerce or e-Commerce, is a type of industry

where the buying and selling of products or services is conducted over electronic systems such
as the Internet and other computer networks. Electronic commerce draws on technologies such
as mobile commerce,  electronic funds transfer,  supply chain management,  Internet
marketing,  online transaction processing,  electronic data interchange (EDI),inventory
management systems, and automated data collection systems.

Electronic commerce is generally considered to be the sales aspect of e-business. It also consists
of the exchange of data to facilitate the financing and payment aspects of business transactions.
This is an effective and efficient way of communicating within an organization and one of the most
effective and useful ways of conducting business.
E-commerce can be divided into 7 subsections:

   E-tailing or "virtual storefronts" on websites with online catalogs, sometimes gathered into a
"virtual mall"
   Buying or selling on websites and/or  online marketplaces
   The gathering and use of demographic data through web contacts and social media
   Electronic data interchange, the business-to-business exchange of data
   E-mail and fax and their use as media for reaching prospective and established customers
(for example, with newsletters)
   Business-to-business buying and selling
   The security of business transactions

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E-tailing or The Virtual Storefront and the Virtual Mall

 As a place for direct retail shopping, with its 24-hour availability, a global reach, the ability to
interact and provide custom information and ordering, and multimedia prospects, the Web is
rapidly becoming a multibillion dollar source of revenue for the world's businesses. A number of
businesses already report considerable success. As early as the middle of 1997, Dell Computers
reported orders of a million dollars a day. By early 1999, projected e-commerce revenues for
business were in the billions of dollars and the stocks of companies deemed most adept at e-
commerce were skyrocketing.

Market Research
In early 1999, it was widely recognized that because of the interactive nature of the Internet,
companies could gather data about prospects and customers in unprecedented amounts -through
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site registration, questionnaires, and as part of taking orders. The issue of whether data was being
collected with the knowledge and permission of market subjects had been raised.

Electronic Data Interchange (EDI)

EDI is the exchange of business data using an understood data format. It predates today's
Internet. EDI involves data exchange among parties that know each other well and make
arrangements for one-to-one (or point-to-point) connection, usually dial-up.

E-Mail, Fax, and Internet Telephony

E-commerce is also conducted through the more limited electronic forms of communication called
e-mail, fax, and the emerging use of telephone calls over the Internet. Most of this is business-
to-business, with some companies attempting to use e-mail and fax for unsolicited ads (usually
viewed as online junk mail or  spam) to consumers and other business prospects. An increasing
number of business Web sites offer e-mail newsletters for subscribers. A new trend is opt-in e-
mail in which Web users voluntarily sign up to receive e-mail, usually sponsored or containing
ads, about product categories or other subjects they are interested in.

Business-to-Business Buying and Selling

Thousands of companies that sell products to other companies have discovered that the Web
provides not only a 24-hour-a-day showcase for their products but a quick way to reach the right
people in a company for more information.

The Security of Business Transactions

Security includes authenticating business transactors, controlling access to resources such as
Web pages for registered or selected users, encrypting communications, and, in general, ensuring
the privacy and effectiveness of transactions. Among the most widely-used security technologies
is the Secure Sockets Layer (SSL), which is built into both of the leading Web browsers.

 
• Electronic commerce was identified as the facilitation of commercial transactions
electronically, using technology such as Electronic Data Interchange (EDI) and Electronic
Funds Transfer (EFT).
 
• What is EDI?
 
• What is EFT?
Electronic Data Interchange: EDI is the structured transmission of data between organizations by
electronic means. It is used to transfer electronic documents or business data from one computer
system to another computer system.

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Electronic Funds Transfer : EFT is the electronic exchange or transfer of money from one account
to another.
HİSTORY OF E-COMMERCE :

 
• The growth and acceptance of credit cards, automated teller machines (ATM) and
telephone banking in the 1980s were also forms of electronic commerce.
 
• Another form of E-Commerce was the airline reservation system, for example Sabre in the
USA and Travicom in the UK.
 
• By the end of 2000, many European and American business companies offered their
services through the World Wide Web.
 
• Since then people began to associate a word “E -Commerce" with the ability of purchasing
various goods through the Internet using secure protocols and electronic payment
services.
ADVANTAGES OF E-COMMERCE :

 
• Faster buying/selling procedure, as well as easy to find products.
 
• Buying/selling 24/7.
 
• Low operational costs and better quality of services.
 
• Easy to start and manage a business.
 
• No need of physical company set-ups.
 
• Customers can easily select products from different providers without moving around
physically.
DISADVANTAGES OF E-COMMERCE : 

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•  There is no guarantee of product quality.

•  There are many hackers who look for opportunities, and thus an ecommerce site, service,
payment gateways, all are always prone to attack.
ELECTRONIC COMMERCE AND PHYSICAL COMMERCE : 

Generally speaking, e-commerce is about the sale and purchase of goods or services by
electronic means, particularly over the internet. Figure 1.1 shows that in broad terms one can
distinguish two types of commerce: physical commerce and e-commerce. In a physical or
traditional commerce system, transactions take place via contact between humans usually in a
physical outlet such as a store. For example, if you want to buy a book, you will go to a physical
bookstore and buy the physical book from a
salesman. In a pure e-commerce system, transactions take place via electronic means.

In this case, you will access a cyber bookstore and download a digital book from a server
computer. These two cases represent the extremes: the traditional commerce system on one side
and the pure e-commerce system on the other. There are many variants and in many cases, e-
commerce and physical commerce can complement each other. For example, a physical book is
ordered by electronic means and it is sent to you via physical means [Turban et al., 20001.
 According to Schneider and Perry [2000], e-commerce is more suitable for standard goods, low-
value goods, digital goods, and simple services (i.e. intangible goods), whereas traditional
commerce is more suitable for nonstandard goods, perishable goods, expensive goods, and
extremely low-value goods. Complex products such as cars and nonstandard services are better
served by integrating e-commerce and physical commerce.
Strictly speaking, e-commerce has a very wide scope and can be further divided into different
categories. The most popular type is, of course, Internet Commerce. It refers to business
transactions over the internet and, in most cases, the transactions are carried out over a web
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system, so we may call it Web-based Electronic Business. Another broad categorization of e-

commerce is to separate it into business focused or customer-focused e-commerce. In recent
years, another term called e-business has emerged, In general, e-business has a wider
perspective than e-commerce. It involves using information technologies in all aspects of the
business. Hence, e-commerce can be viewed as a subset of e-business. However, like many
other e-commerce books, we will use the following terms e-commerce, internet commerce, Web-
based electronic business and e-business in an interchangeable manner.

DIFFERENT TYPES OF E-COMMERCE : 

 
 Business-to-business (B2B)
 
 Consumer (B2C)
 
 Business-to-government (B2G)
 
 Consumer-to-consumer (C2C)
 
 Mobile commerce (m-commerce)

What is B2B e-commerce?

  B2B e-commerce is simply defined as ecommerce between companies. About 80% of e-



commerce is of this type.

  Examples:  


  Intel selling microprocessor  to Dell



  Heinz selling ketchup to Mc Donalds



What is B2C ecommerce?

  Business-to-consumer e-commerce, or commerce between companies and consumers,



involves customers gathering information; purchasing physical goods or receiving

products over an electronic network.
  Example:  


  Dell selling me a laptop



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What is B2G ecommerce?

  Business-to-government e-commerce or B2G is generally defined as commerce between



companies and the public sector. It refers to the use of the Internet for public procurement,
licensing procedures, and other government-related operations
  Example:  


  Business pay taxes, file reports, or sell goods and services to Govt. agencies.

What is C2C ecommerce?

  Consumer-to-consumer e-commerce or C2C is simply commerce between private



individuals or consumers.
  Example:  


   Mary buying an iPod from Tom on eBay

   Me selling a car to my neighbour

What is m-commerce?

  M-commerce  (mobile commerce) is the buying and selling of goods and services through


wireless technology-i.e., handheld devices such as cellular telephones

  Mobile Ticketing
  Information Services
  Mobile Banking

BUSSINESS MODELS :

E-Commerce or Electronics Commerce business models can generally categorized in following

categories.

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 Business - to - Business (B2B)

 
 Business - to - Consumer (B2C)

 
 Consumer - to - Consumer (C2C)

 
 Consumer - to - Business (C2B)

 
 Business - to - Government (B2G)

 
 Government - to - Business (G2B)

 
 Government - to - Citizen (G2C)

Business - to - Business (B2B)  

Website following B2B business model sells its product to an intermediate buyer who then sells
the product to the final customer. As an example, a wholesaler places an order from a company's
website and after receiving the consignment, sells the end product to final customer who comes
to buy the product at wholesaler's retail outlet.

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Business - to – Consumer (B2C) 

Website following B2C business model sells its product directly to a customer. A customer can
view products shown on the website of business organization. The customer can choose a
product and order the same. Website will send a notification to the business organization via email
and organization will dispatch the product/goods to the customer.

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Consumer - to - Consumer (C2C) 

Website following C2C business model helps consumer to sell their assets like residential
property, cars, motorcycles etc. or rent a room by publishing their information on the website.
Website may or may not charge the consumer for its services. Another consumer may opt to buy
the product of the first customer by viewing the post/advertisement on the website.

Consumer - to - Business (C2B)  

In this model, a consumer approaches website showing multiple business organizations for a
particular service. Consumer places an estimate of amount he/she wants to spend for a particular
service. For example, comparison of interest rates of personal loan/ car loan provided by various
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banks via website. Business organization who fulfills the consumer's requirement within specified
budget approaches the customer and provides its services.

Business - to - Government (B2G)  

B2G model is a variant of B2B model. Such websites are used by government to trade and
exchange information with various business organizations. Such websites are accredited by the
government and provide a medium to businesses to submit application forms to the government.

Government - to - Business (G2B)  

Government uses B2G model website to approach business organizations. Such websites
support auctions, tenders and application submission functionalities.

Government - to - Citizen (G2C)  

Government uses G2C model website to approach citizen in general. Such websites support
auctions of vehicles, machinery or any other material. Such website also provides services like
registration for birth, marriage or death certificates. Main objectives of G2C website are to reduce
average time for fulfilling people requests for various government services.

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INTEGRATION BUSINESS MODEL-

E-SERVICES :

The concept of e-service  (short for electronic service) represents one prominent application of
utilizing the use of information and communication technologies (ICTs) in different areas.
However, providing an exact definition of e-service is hard to come by as researchers have been
using different definitions to describe e-service. Despite these different definitions, it can be
argued that they all agree about the role of technology in facilitating the delivery of services which
make them more of electronic services.

It seems compelling to adopt Rowley (2006) approach who defines e-services as: “…deeds,
efforts or performances whose delivery is mediated by information technology. Such e-service
includes the service element of e-tailing, customer support, and service delivery”. This definition
reflect three main components- service provider, service receiver and the channels of service
delivery (i.e., technology). For example, as concerned to public e-service, public agencies are the
service provider and citizens as well as businesses are the service receiver. The channel of
service delivery is the third requirement of e-service. Internet is the main channel of e-service

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delivery while other classic channels (e.g. telephone, call center, public kiosk, mobile phone,
television) are also considered.

E-service benefits :

Lu (2001) identifies a number of benefits for e-services, some of these are:

    Accessing a greater customer base

   Broadening market reach
   Lowering of entry barrier to new markets and cost of acquiring new customers
    Alternative communication channel to customers
   Increasing services to customers
   Enhancing perceived company image
   Gaining competitive advantages
   Potential for increasing customer knowledge

E-service domain :

The term ‘e-service’ has many applications and can be found in   many disciplines. The two
dominant application areas of e-services are

E-business (or e-commerce): e-services mostly provided by businesses or [NGO|non-government

organizations] (NGOs) (private sector).

E-government: e-services provided by government to citizens or business (public sector is the

supply side). The use and description of the e-service in this page will be limited to the context of
e-government only where of the e-service is usually associated with prefix “public”: Public e -
services. In some cases, we will have to describe aspects that are related to both fields like some
conferences or journals which cover the concept of “e -Service” in both domains of e -government
and e-business. 
Architecture :

Depending on the types of services, there are certain functionalities required in the certain layers
of e-service architectural framework, these are but not limited to  – Data layer (data sources),
processing layers ( customer service systems, management systems, data warehouse systems,
integrated customer content systems), exchange layer (Enterprise Application Integration – EAI),
Interaction layer ( integrating e-services), and presentation layer (customer interface through
which the web pages and e-services are linked).
E-service cost factor :

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Some major cost factors are (Lu, 2001):

   Expense of setting up applications

   Maintaining applications
   Internet connection
   Hardware/software
   Security concerns
   legal issues
   Training; and
   Rapid technology changes

Major e-service keywords :

Some of the major keywords of e-service as found in the e-government research are as follows:
Acceptance

User acceptance of technology is defined according to Morris (1996, referred by Wu 2005,

p. 1)[21] as “the demonstrable willingness within a user group to employ information technology for
the tasks it is designed to support”. This definition can be brought into the context of e -service
where acceptance can be defined as the users’ willingness to use e -service or the willingness to
decide when and how to use the e-service.
Accessibility

Users’ ability to access to the e -service is important theme in the previous literature. For example,
Huang (2003)[22]  finds that most of the websites in general fail to serve users with disabilities.
Recommendation to improve accessibility is evident in previous literature including Jaeger
(2006)[23]  who suggests the following to improve e-services’ accessibility like: design for
accessibility from the outset of website development, Involve users with disabilities in the testing
of the site …Focus on the benefits of an accessible Web site to all user  s.
Administrative literacy

 According to Grönlund et al. (2007),[24] for a simple e-service, the needs for knowledge and skills,
content and procedures are considerably less. However, in complicated services there are
needed to change some prevailed skills, such as replacing verbal skills with skill in searching for
information online.
Benchmarking

This theme is concerned with establishing standards for measuring e-services or the best
practices within the field. This theme also includes the international benchmarking of e-
government services (UN reports, EU reports); much critic has been targeting these reports being

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incomprehensive and useless. According Bannister (2007)[25]   “… benchmarks are not a reliable
tool for measuring real e-government progress. Furthermore, if they are poorly designed, they risk
distorting government policies as countries may chase the benchmark rather than looking at real
local and national needs”  
Digital divide

Digital divide is considered one of the main barriers to implementing e-services; some people do
not have means to access the e-services and some others do not know how to use the technology
(or the e-service). According to Helbig et al. (2009),[26] “we suggest E-Government and the digital
divide should be seen as complementary social phenomena (i.e., demand and supply). Moreover,
a serious e-government digital divide is that services mostly used by social elites."
E-readiness

Most of the reports and the established criteria focus on assessing the services in terms of
infrastructure and public policies ignoring the citizen participation or  e-readiness. According to by
Shalini (2009),[27]  “the results of the research project reveal that a high   index may be only
indicating that a country is e-ready in terms of ICT infrastructure and info-structure, institutions,
policies, and political commitment, but it is a very poor measure of the e-readiness of citizens. To
summarize the findings, it can be said that Mauritius is ready but the Mauritians are not”  

``E-readiness, as the Economist Intelligence Unit defines, is the measure of a country’s abi lity to
leverage digital channels for communication, commerce and government in order to further
economic and social development. Implied in this measure is the extent to which the usage of
communications devices and Internet services creates efficiencies for business and citizens, and
the extent to which this usage is leveraged in the development of information and communications
technology (ICT) industries. In general terms, the definition of e-readiness is relative,for instance
depending on a country in question's priorities and perspective.[28] 
Efficiency

 As opposed to effectiveness, efficiency is focused on the internal competence within the
government departments when delivering e-services. There is a complaint that researchers focus
more on effectiveness “There is an emerging trend seemingly moving away from the efficiency
target and focusing on users and governance outcome. While the latter is worthwhile, efficiency
must still remain a key priority for eGovernment given the budget constraints compounded in the
future by the costs of an ageing population. Moreover, efficiency gains are those that can be most
likely proven empirically through robust methodologies”[29]  
Security

Security is the most important challenge that faces the implementation of e-services because
without a guarantee of privacy and security citizens will not be willing to take up e-government
services. These security concerns, such as hacker attacks and the theft of credit card information,

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make governments hesitant to provide public online services. According to the GAO repor t[30] of
2002 “security concerns present one of the toughest challenges to extending the reach of e -
government.The rash of hacker attacks, Web page defacing, and credit card information being
posted on electronic bulletin boards can make many federal agency officials—as well as the
general public—reluctant to conduct sensitive government transactions involving personal or
financial data over the Internet.” By and Large, Security is one of the major challenges that faces
the implementation and development of electronic services. people want to be assured that they
are safe when they are conducting online services and that their information will remain secure
and confidential
Stakeholders

 Axelsson et al. (2009)[31] argue that the stakeholder concept-which was originally used in private
firms-, can be used in public setting and in the context of e-government. According to them,
several scholars have discussed the use of the stakeholder theory in public settings.[32]  The
stakeholder theory suggests that need to focus on all the involved stakeholder s when designing
the e-service; not only on the government and citizens.
Usability

Compared to Accessibility, There is sufficient literature that addresses the issue of usability;
researchers have developed different models and methods to measure the usability and
effectiveness of eGovernment websites. However, But still there is call to improve these measures
and make it more compressive

``The word usability has cropped up a few times already in this unit. In the context of biometric
identification, usability referred to the smoothness of enrollment and other tasks associated with
setting up an identification system. A system that produced few false matches during enrollment
of applicants was described as usable. Another meaning of usability is related to the ease of use
of an interface. Although this meaning of the term is often used in the context of computer
interfaces, there is no reason to confine it to computers.

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CATEGORIES OF E-SERVICES :

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WEB-ENABLED SERVICES :

Web enabled refers to a product or service that can be used through, or in conjunction with, the
World Wide Web. A Web-enabled product may be accessed through a Web browser or be able to
connect to other Web-based applications in order to synchronize data.

This term used to be an attractive buzzword to include in a product description, but now it would be
rarer to have technology that is not Web enabled.

Web-enabled, information-based services is clearly a hot area for business model innovation for
companies in nearly every consumer and b2b industry sector. But proving the ROI can be difficult
when most models still rely on advertising dollars for revenue. After studying a number of
successful examples that convert eyeballs to dollars through a number of creative revenue
streams, a few keys to success emerged:

1. With great content comes a community.   A truly useful information-based service will
understand the range of needs of its users, and will aggregate content into one forum, eliminating
the hassle of dealing with providers one by one, question by
question. Arguably, theknot.com   operates this model best, aggregating a range of relevant
wedding-related content at the macro-level, then drilling down to ratings and recommendations of
local service providers by zip code. Good-bye Yellow Book (are they still around?)

2. Enable both virtual and physical communities. This is the Weight Watchers business
model, rated by users as the most successful diet website. It lets the user choose how they want
to viagra usa engage, and provides a range of online-only or in-person options based on personal
preference. If you have ever been to a Weight Watchers meeting, then you know the power that
comes from this physical brand touch point (what company wouldn’t want their users to call
themselves “lifetime members” of th eir services?)

3. Use the data. Identifying a revenue-generating data play is likely the hardest way to monetize
an information-based service, but could have the highest payout. Johnson &
Johnson’s   BabyCenter.com , the #1 website for moms (they reach 70% of all moms in the US)
developed a Marketing Solutions Center that consults to their advertisers and other companies
looking for ways to target moms online. Similarly,VibrantNation.com, the leading forum for
Boomer women, translates the data it receives from its forums into a b2b marketing service.

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  A Web service needs to be created and its interface must be defined



  A Web service needs to be published to one or more intranet or Internet



repositories for potential users to locate

  A Web service needs to be located to be invoked by potential users



  A Web service needs to be invoked to be of any benefit



  A Web service may need to be unpublished when it is no longer available or



needed

Web services interactions

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WEB SERVICES ARCHITECHTURE

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MATCHMAKING SERVICES :

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INFORMATION-SELLING ON THE WEB :

Information selling on the web is in the form of e-books including digital audio and video. Most
people use the Internet to do research, gather business intelligence, find fun things to do, indulge
their hobbies or as a medium for the exchange of information via e-mail. The idea behind this new
business model is to leverage this insatiable hunger for information on the web by creating and
selling digital information for profit.
What are Information Products? For the purpose of this article information products can be
classified into three:
1. eBooks - eBooks are electronic books you can read on your computer or your MP4 player
or print out if you prefer hard copies. eBooks are instantly delivered electronically via a simple
download from the Internet to the customer.
2. Audio - You can record your information using freely available software and a microphone.
 Audio CDs are now being delivered instantly via digital download to the customer.
3. Video - They say a picture is worth a thousand words, a video is even more powerful.
Contrary to popular belief creating a video product is not difficult. Digital video cameras and the
necessary software are readily available. Most video cameras now come with full instructions and
the software to get this done. A well-planned video presentation may be what is needed to reach
your audience.

Why Information Products?

There are several reasons why this business model has become very attractive to many aspiring
entrepreneurs:

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1. Low cost entry. The cost for entry is small, you can create your products, build a website,
pay your hosting fees plus acquire the tools to start an effective e-mail campaign for under $500.
There is probably no other business with this much potential that you can start for so little money.
2. Easy to Create. Once you have gone through the process of creating your first product,
the process becomes second nature to you. You can create as many products as you wish to
enable you build multiple sources of income. The technology to do this is available in the form of
e-Book creation software. These specialized software will help you automate the entire process
including packaging and distribution.
3. Unlimited Inventory. Once you have created a successful product, it becomes an asset
that you own and control. There are no more production costs and the inventory is unlimited. You
do not need to purchase additional inventory because you now own a product that cannot be
depleted. Your job is to continue to market and promote your product for as long as there is
demand for it.
4. No shipping and handling required. Your product is delivered automatically without any
human intervention. No lost packages, no stamps and no delivery costs. The computer handles
all chores and tracks the delivery of your product to your customers.
5. Immediate Payment: No receivables, thank you. Product is delivered automatically once
payment is made.
6. You can work from home no long commutes necessary.

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