E-commerce applications

Luisa Calcagno

Course of Software Engineering 2 May 29th 2002

Plan of the talk
• Introduction to e-commerce and ecommerce applications • Issues in developing e-commerce applications • Architecture of e-commerce applications • Bookstore example • Perspectives for e-commerce • References

A definition for e-commerce
• A universally accepted definition does not exist • Anything that uses electronic technology in order to do business can be intended as ebusiness • We can look at e-commerce as to a subset of e-business concerning commerce • Commerce is intended as the activity of exchanging goods and services with some kind of payment

It encompasses many diverse activities including electronic trading of goods and services. electronic share trading.The EU definition for e-commerce • “e-commerce is based on the electronic processing and transmission of data. electronic fund transfer.” (EU(97)/157) . public procurement. on-line delivery of digital content.

Origins of e-commerce applications • E-commerce applications existed long before Internet – EDI (Electronic Data Interchange) – EFT (Electronic Funds Transfer) • Internet offered the general public the opportunity to conduct businesses online .

Taxonomy of e-commerce applications • Three main categories: – Business to consumer (B2C) – Business to business (B2B) – Consumer to consumer (C2C) • Other categories: – Business to government (B2G) – Mobile Commerce .

ryanair.com) • Online car purchasing (e. automall.com) • Booking and purchase of airline tickets (e.com) • Correspond to retail sale • Growth of B2C applications thanks to Internet • A new kind of B2C applications are the Cybermalls .g. amazon.g.g.B2C applications • Offer directly to the customer an interface of activity – Typical examples: • Online book store (e.

B2C applications: advantages and disadvantages • Advantages: – Allow company to extend existing services to customers – Allow company to increase its customers – Offer a wider choice and allow cheaper prices – May give to the company a worldwide visibility – Online shops are accessible 24h a day • Disadvantages: – Low order conversion rates – High risk (see Cyberphobia) .

B2B applications • Realize transactions needed to perform financial or commercial activities by companies over the Internet • Some typical applications: – E-procurement – E-Marketplace • The turnover is much greater than that dealed with B2C applications .

B2B applications: advantages and disadvantages • Advantages: – Help to automate communications between companies making them easier and quicker – Allow to cut prices drastically – Help in reducing mistakes • Disadvantages: – Often need legacy integration .

com .C2C applications • Concern the consumers who run negotations with other consumers sometimes utilizing as intermediary a company – Examples: • Ebay • Autotrader.

C2C applications: advantages and disadvantages • Advantages – Allow consumers to interact directly among them – Give to the consumers a new way of purchasing and selling services and goods • Disadvantages – Little earning capacity .

B2G applications • Correspond to all kind of transactions between company and public administrator • Utilized mostly in the USA .

Mobile commerce applications • Concern doing businesses by means of mobile wireless devices • Can be both B2B and B2C • Have a growing importance in the future of ecommerce applications • Will introduce completely new forms of electronic commerce – E. E-tickets • The development of such applications faces some of the greatest challenges in the security area to secure the trust of consumers .g.

Plan of the talk • Introduction to e-commerce and ecommerce applications • Issues in developing e-commerce applications • Architecture of e-commerce applications • Bookstore example • Perspectives for e-commerce • References .

but they are all critical in the case of e-commerce because of its nature .Issues in developing e-commerce applications (1/2) • Many of the following issues: – – – – – – – Security Flexibility Scalability Fault tolerance Integration Interfaces (graphical and not) Time-to-market are common to many applications.

Issues in developing e-commerce applications (2/2) • A state-of-the-art application always fail if people do not utilize it – A constant attention must be payed to the users over the whole development process • A close integration with every business aspect is needed: – For an online buyer security and easy access to the informations are the primal needs – A manager will need a flexible application to adapt the business to the new trends in a faster way .

Security Issues • Security is a crucial feature – Most transactions take place in a fully automated way – Restricted data are transmitted through a public network • Users must be sure that their money will not be lost or stolen .

Flexibility Issues • E-commerce systems are subject to frequent structural changes because of mutations of: – Products and services provided by the firm – Commercial partnerships .

even millions) without compromising performances • It is important because a slow application often means to lose customers (especially in B2C) since they have very small patience .Scalability • Capability to support a certain number of users (thousands.

Fault tolerance • A less fault-tolerant application will be less available to the user • Every minute that a site is not available costs 1400$ to the company (survey on 400 major companies by Oracle) • It is easy to lose customers forever • It is necessary to redirect the users without they perceive it .

Integration • Always needed since no application offering every commercial functionality can be realized • Critical because the commercial funcionalities are often realized by many different legacy and third-party applications – Examples: • ERP systems • Legacy systems .

User Interfaces • Must be intuitive.easily comprehensible and of simple utilization • In the case of B2C must support profiling in order to anticipate the customer requests • They also need to be customizable .

Multi-channel interfaces • Application interfaces must support several kinds of connections: – Web browsers – Web TV – Cellular phones (via WAP) – PDA .

Time-to-market • Has greater importance than elsewhere • Emphasis on COTS and reuse .

Plan of the talk • Introduction to e-commerce and ecommerce applications • Issues in developing e-commerce applications • Architecture of e-commerce applications • Bookstore example • Perspectives for e-commerce • References .

Two-tier Architecture (client server) • Data reside on a server • Business logic and user interfaces reside on clients • Drawbacks : – Clients sustain the main load and consequently result to be heavyweight – Excessive overhead – Simple but unsuitable for e-commerce applications .

Three-tier architecture • Separates the business logic of the application from user interfaces and from data access • Middle tier can be furtherly divided • In this case we call it multi-tier architecture: – Easier to modify one component – Lower cost to deploy and maintain .

Three-tier architecture .

Application server • Software that runs on the middle tier of a three-tier environment • In multi-tier environments it is often a distributed and complex software • Commercial implementations exist: – Microsoft Commerce Server 2000 – Sun iPlanet – IBM WebSphere Application Server .

Application Server-based e-commerce platform architecture E-commerce platform ERP Presentation Layer Business Logic Layer Data & Legacy Access Layer Resource Load Pooling balancing Legacy systems Transactions Security Session Horizontal Services Database Application Server Client tier Server tier Data tier .

Example: iPlanet architecture .

Plan of the talk • Introduction to e-commerce and ecommerce applications • Issues in developing e-commerce applications • Architecture of e-commerce applications • Bookstore example • Perspectives for e-commerce • References .

Domain Model .

Use Case Model .

Plan of the talk • Introduction to e-commerce and ecommerce applications • Issues in developing e-commerce applications • Architecture of e-commerce applications • Bookstore example • Perspectives for e-commerce • References .

you'd definitely have to pick consumers” • “It lets you go out to the Internet and look at products and services of every kind. April 2000) .Future Perspectives (1/2) • “Electronic commerce is going to reduce a lot of overhead in the economy” • “It will allow a purchase order to go from being about a $75 cost to about $10” • “if you had to pick who's the big winner in all of this. that never would have been available through traditional distribution channels” • (Bill Gates at the White House Conference on the New Economy.

Future Perspectives (2/2) • In spite of Bill’s words. in Europe there is a strong tendency towards the acceptance of Mobile Commerce • EITO (European Information Technology Observatory) 2002 highlights the growing importance of Mobile Commerce (see next page) . people still lack trust in e-commerce • However.

Trends in Mobile Commerce for the EU Markets: entertainment .

Trends in Mobile Commerce for the EU Markets: banking and finance .

Worldwide TLC markets by region .

Plan of the talk • Introduction to e-commerce and ecommerce applications • Issues in developing e-commerce applications • Architecture of e-commerce applications • Bookstore example • References .

Kerzner et al..References (1/4) • Introduction to e-commerce and the development of e-commerce applications: – Professional Java E-Commerce. M. 2001 • EU definition for e-commerce: – “A European Initiative in Electronic Commerce – Communication to the European Parliament. Wrox Press. the Economic and Social Committee and the Committee of the Regions” (COM(97)/157) . the Council.

References (2/4) • Electronic Data Interchange: – Intodruction to EDI.DevEdge online • Cyberphobia and trends in e-commerce: – http://www.com • Application Servers: – Introduction to iPlanet Application Server Architecture.com/developers/evangcentral . vv. 2002 – http://www. Robert Schulteis.sun. .aa.webmergers. Sun Microsystems.

Magliano. 1997 • Architectures for e-commerce: – Architetture. Sciarappa. Netscape Communications Corporation White paper. tecnologie e modelli funzionali nell’ecommerce. Notiziario tecnico Telecom Italia.References (3/4) • Platforms for e-commerce: – Building Applications in the Net Economy. 2000 . Castrogiovanni. December 2001 • Statement of Bill Gates – The White House Conference on the New Economy April 5.

Digital Union 2001 (http://www.com • The Bookstore example: – UML for E-Commerce.com . Doug Rosenberg – http://www.com) • European Information Technology Observatory (EITO): – http://www.References (4/4) • E-procurement and e-marketplaces: – E-procurement white paper.iconixsw.eito.digitalunion.

The End .

Electronic Data Interchange (EDI)
• Electronic exchange of
– Business documents – Business data

• In a standard format (ANSI X12,EDIFACT) • Established between 1968 and 1975 in the transportation industries (U.S.) • Application-to-application communication without human intervention

Electronic Funds Transfer (EFT)
• The banking equivalent of EDI • Denotes the transfer of :
– Electronic checks – Customer accounts – Payment informations

in automated way

Order conversion rates
• Defined as:
– # of orders / # of contacts – By month or year, four-month periods, etc.

• Measure the capability of a certain B2C application to convert an user into a buyer • A survey carried out in August 2000 showed that order conversion rates in USA were of 1.9% (Boston Consulting Group and Shop.org)

such as office items) . perform all of the activities related to generating an order on the buyer’s side • Purchased goods can be : – Direct goods (critical items in the supply chain) – Indirect goods (MRO –Maintenance Repair and Operations .e. i.E-procurement applications (1/3) • Automate enterprise purchasing processes.

E-procurement applications (2/3) • Automating procurement of indirect goods can dramatically reduce costs since: – Lessens maverick buying – Reduces supplier response time .

Payment request electronically forwarded 7. Order is fulfilled by the supplier 6. Purchase request is performed by employees via a Web interface 4.E-procurement applications(3/3) 3. Order approvation compliant to company standards and procedures 2. Purchase order is electronically placed Indirect goods e-procurement 1. Product selection from available catalogues 5. Product receipt . Product delivery 8.

enabling them to reach new customers and reduce transaction costs • E-marketplaces are becoming more fashionable .E-marketplace • An environment that brings buyers and sellers together in a virtual space for ecommerce.

Cybermalls • Include more virtual shops • Appear as web portals with links to single e-shops grouped by different product categories (e.g. music or books) • Advantages for smaller businesses: – Reduced initial investment – Easily traceability through the mall’s brand .

Presentation Layer • Its purpose is to provide a user interface to the end user of the application • Controls the look-and-feel of the application and responds to user events • Serves actually as the front-end of the application .

Business Logic Layer • The heart of the application itself • Contains the business rules and /or processes • Its components link between presentation and data/legacy layers .

Data & Legacy access Layer • Its purpose is to give to the business logic components access to backend data sources such as: – Databases – ERP systems – Other custom systems .

) • Typical services: – – – – – Transactions Security Session Management Resource pooling Load balancing and fail over .Horizontal services • Services provided by the application server by means of an underlying technology (CORBA.etc. COM. EJB.

Session Management • Mantains the correlation among requests generated by the same user .

g.Resource Pooling • Caching the instances of used resources (e. database connections) improves performances .

Load Balancing and Fail Over • Make possible to distribute incoming requests • Handle clients reconnection in the case of system crash .

com crash •“Cyberphobia” is the market’s irrational fear of the Internet due to the several bankruptcies occured in the past years •B2C represent 75% of bankruptcies Internet shutdowns 2000 Jan-Apr 6 2001 220 2002 66 Source:Webmergers.Cyberphobia and the .com .

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