E-Commerce

E-Commerce
In its simplest form ecommerce is the buying and selling
of products and services by businesses or consumers
over the World Wide Web.
People use the term "ecommerce" or "online shopping"
to describe the process of searching for and selecting
products in online catalogues and then "checking out"
using a credit card and encrypted payment processing
Definition
E-commerce describes the process of buying
and selling of products, services and
information via computer networks including
internet.
E-commerce is the means to complete online
transaction and integrate the supply chain into
the transaction management process such as
receiving orders, making payments and
tracking down the deliveries or order.
 E-commerce Benefits
Reduced costs by reducing labour,

Reduced paper work,

Reduced errors in keying in data,

Reduced time. Shorter lead times for payment

 E-commerce Benefits
Faster delivery of product .

New Markets. The Internet has the potential to expand your

business into wider geographical locations
Limitation of Traditional
Commerce
Paper work
Delay in transaction
Addition cost of paper, typing, documents storage and
handling.
Time consuming
Delay in payment
Difficult to reach to remote customer
Distributor, agents, wholesaler.
Role of E-Commerce
E-Commerce is used everywhere
On-line education
Online banking
Electronic fund transfer
Online auction
Travel reservation on internet
Online retailing(homeshop18, flip cart)
Three-tier Technical Model
Server side

Client side Service system Backend system

Architecture of Web-based E-
Commerce System
Service system Backend system

Web Server Application Server

Internet Database

Intranet
Firewall
(Secure)

Client side Server side

 Features

E-Commerce provides following features

Non-Cash Payment: E-Commerce enables use of
credit cards, debit cards, smart cards, electronic fund
transfer via bank's website and other modes of
electronics payment.
24x7 Service availability: E-commerce automates
business of enterprises and services provided by them
to customers are available anytime, anywhere. Here
24x7 refers to 24 hours of each seven days of a week.
 Advertising / Marketing: E-commerce increases the reach
of advertising of products and services of businesses. It helps
in better marketing management of products / services.
Improved Sales: Using E-Commerce, orders for the products
can be generated any time, any where without any human
intervention. By this way, dependencies to buy a product
reduce at large and sales increases.
Support: E-Commerce provides various ways to provide pre
sales and post sales assistance to provide better services to
customers.
.
 Inventory Management: Using E-Commerce,
inventory management of products becomes
automated. Reports get generated instantly when
required. Product inventory management becomes very
efficient and easy to maintain.
Communication improvement: E-Commerce provides
ways for faster, efficient, reliable communication with
customers and partners
Advantages:E-Commerce
Advantages
E-Commerce advantages can be broadly
classified in three major categories:

Advantages to Organizations

Advantages to Consumers

Advantages to Society
 Advantages to Organizations

Using E-Commerce, organization can expand their

market to national and international markets with
minimum capital investment. An organization can
easily locate more customers, best suppliers and
suitable business partners across the globe.
E-Commerce helps organization to reduce the cost to
create process, distribute, retrieve and manage the
paper based information by digitizing the information.
E-commerce improves the brand image of the company.
 Advantages to Organizations

E-commerce helps organization to provide better

customer services.
E-Commerce helps to simplify the business processes
and make them faster and efficient.
E-Commerce reduces paper work a lot.
E-Commerce increased the productivity of the
organization. It supports "pull" type supply
management. In "pull" type supply management, a
business process starts when a request comes from a
customer and it uses just-in-time manufacturing way.
 Advantages to Customers

24x7 support. Customer can do transactions for the

product or enquiry about any product/services provided
by a company any time, any where from any location.
Here 24x7 refers to 24 hours of each seven days of a
week.
E-Commerce application provides user more options
and quicker delivery of products.
E-Commerce application provides user more options to
compare and select the cheaper and better option.
 A customer can put review comments about a product
and can see what others are buying or see the review
comments of other customers before making a final buy.
E-Commerce provides option of virtual auctions.
Readily available information. A customer can see the
relevant detailed information within seconds rather than
waiting for days or weeks.
E-Commerce increases competition among the
organizations and as result organizations provides
substantial discounts to customers.
Advantages to Society

Customers need not to travel to shop a product thus

less traffic on road and low air pollution.
E-Commerce helps reducing cost of products so less
affluent people can also afford the products.
E-Commerce has enabled access to services and
products to rural areas as well which are otherwise not
available to them.
E-Commerce helps government to deliver public
services like health care, education, social services at
reduced cost and in improved way.
E-Commerce Disadvantages

E-Commerce disadvantages can be broadly classified in

two major categories:
Technical disadvantages
Non-Technical disadvantages
Technical Disadvantages

There can be lack of system security, reliability or

standards owing to poor implementation of e-Commerce.
Software development industry is still evolving and keeps
changing rapidly.
In many countries, network bandwidth might cause an
issue as there is insufficient telecommunication
bandwidth available.
Special types of web server or other software might be
required by the vendor setting the e-commerce
environment apart from network servers.
 Sometimes, it becomes difficult to integrate E-
Commerce software or website with the existing
application or databases.
There could be software/hardware compatibility issue as
some E-Commerce software may be incompatible with
some operating system or any other component.
Non-Technical Disadvantages

Initial cost: The cost of creating / building E-Commerce

application in-house may be very high. There could be
delay in launching the E-Commerce application due to
mistakes, lack of experience.
User resistance: User may not trust the site being
unknown faceless seller. Such mistrust makes it difficult
to make user switch from physical stores to
online/virtual stores.
 Security/ Privacy: Difficult to ensure security or privacy
on online transactions.
Lack of touch or feel of products during online shopping.
E-Commerce applications are still evolving and
changing rapidly.
Internet access is still not cheaper and is inconvenient
to use for many potential customers like one living in
remote villages.
Types of Electronic commerce
Business - to - Business (B2B)

Business - to - Consumer (B2C)

Consumer - to - Consumer (C2C)

Consumer - to - Business (C2B)

B2B
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.
Business - to - Consumer(B2C)
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.
Consumer - to - Consumer (C2C)
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)
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 banks via website. Business
organization who fulfills the consumer's requirement
within specified budget approaches the customer and
provides its services.
E-commerce definition
Business originating from . . .
Business Consumers

And selling to . . .

Business
B2B
B2B C2B
C2B
Consumers

B2C
B2C P2P
P2P
E-commerce categories
Business originating from . . .
Business Consumers

And selling to . . . Publishers

Publishersorder
orderpaper
paper

Business
supplies from paper
supplies from paper
companies
companies Consumers
Consumers aggregate
aggregate to
to
bulk
bulk purchasefrom
purchase fromAmazon
Amazon
Amazon
Amazon orders
orders from
from
Consumers publishers
publishers

Consumers
Consumersbuy buythousands
thousands
of Consumers resell
of Harry Potter books from
Harry Potter books from copies on eBay
Amazon
Amazon

Single chain (or converging categories) of e-commerce

Elements of E-Commerce
Database
Website(with all details)
Cookies
SSL(secure sockets layer)
Secure Certificate
Electronic payment system.
Merchant Account
Payment Gateway
Example of Electronic Commerce

B2C: www.amazon.com
C2C: www.eBay.com
B2B: www.tpn.com
C2B: www.priceline.com
Measuring Benefits
Tangible benefits of electronic commerce initiatives
include:
Increased sales
Reduced costs

Intangible benefits of electronic commerce initiatives

include:
Increased customer satisfaction
 Catalog
A catalog represents a collection of products that
you group into categories.
You can then use this information to create, within
a Commerce Server-enabled Web site,
Web pages that let your customers browse your
collection of products.
The categories in your catalogs can have sub-
categories, and products may appear in multiple
categories.
 Catalog
You can define a product with variations, for example,
the same shirt can have different colors. These are
called a product variants.
You can also create catalogs that display on your Web
site in different languages and different currencies.
You can link two products together, so that when one is
viewed, the other appears somewhere on your Web site
page as an alternate suggestion..
 Catalog
Catalogs contain hierarchies and relationships that you
use to organize the products in the catalog
It is used to make it easier for customers to navigate to
the products that they want to buy.
You can create category hierarchies and relationships
among categories and products that are in the same
catalog or in different catalogs.

 Catalog
For example, if you have a large catalog, you can create
a parent category that includes several other
categories, known as child categories.
When customers navigate to the parent category, the
child categories appear; enabling customers to navigate
quickly to the category that contains the products they
want.
For example, you could define an "alternate"
relationship so that when one product is viewed,
another appears somewhere on your Web site page as
an alternate suggestion.
 Merchant account
A merchant account is a type of bank account that allows
businesses to accept payments by payment cards, typically debit
or credit cards. A merchant account is established under an
agreement between an acceptor and a merchant acquiring bank
for the settlement of payment card transactions. In some cases a
payment processor, independent sales organization (ISO), or
member service provider (MSP) is also a party to the merchant
agreement. Whether a merchant enters into a merchant
agreement directly with an acquiring bank or through an
aggregator, the agreement contractually binds the merchant to
obey the operating regulations established by the
card associations.
 What is an Internet merchant account?
It's an account with a bank that allows you to process
credit cards online.
 How it works
.
Your Online Shop
Payment Gateway
InternetMerchant Account
 How it works
Your customer inputs credit card information in Your
Online Shop.
The Payment Gateway encrypts data and sends it
securely to your Internet Merchant Account.
The transaction is reviewed for authorisation by the
customers issuing bank.
The result is encrypted and sent back through the
gateway.
You get the results and decide whether or not to fulfil
the order.
 Supply chain management
(SCM)
Supply chain management is the integration of
the activities that procure(buy) materials and
services, transform them into intermediate goods
and final products, and deliver them through a
distribution system.
But in general, Supplychain management means the
management of upstream anddownstream relationships
with suppliers and customers to deliversuperior
customer value at less cost to the supply chain as a
whole
 Enterprise resource planning
(ERP)
Enterprise resource planning (ERP) is a business management
softwareusually a suite of integrated applicationsthat a company can
use to collect, store, manage and interpret data from many business
activities, including:-
Product planning, cost and development
Manufacturing or service delivery
Marketing and sales
Inventory management
Shipping and payment
ERP provides an integrated view of core business processes, often in real-
time, using common databases maintained by a database management
system
 ERP software is considered an enterprise application as
it is designed to be used by larger businesses and often
requires dedicated teams to customize and analyze the
data and to handle upgrades and deployment.
So Generally there are lot of ERP package vendors in
the
market like,SAP,Oracle,BANN,JD Edwards,SIEBEl
etc.Each
vendor is specialized in one or many resources.SAP
comes
under ERP Package which gives business solutions to a
business setup in all areas like Finance,Sales,Costing
 SAP
SAP stands for Systems Applications and Products
in Data Processing.
SAP is an Enterprise Resource Planning (ERP) system
by SAP AG, company based out of Walldorf in Germany.
AG is derived from the German word AKtiengesellschaft.
According to German Language SAP Stands for
Systeme, Anwendungen und Produkte in Der
Datenverarbeitung.SAP software suite that is being
implemented as part of re-engineering and Provides end
to end solutions for financial, logistics, distribution,
inventories. Present scenario large number of
companies are using sap software for their day to day
 SAP
SAP is beautifully and neatly integrated ERP software.
SAP is a leader when it comes to easy integration
among all the departments. It provides industry specific
solutions for different industries other then its basic SAP
modules. SAP suit contains SAP FI, CO, SD, MM, PP, HR,
PA and other modules
 Procurement
(obtain)
The act of obtaining or buying goods and services. The
process includes preparation and processing of a
demand as well as the end receipt and approval of
payment.
 EDI

EDI stands for Electronic Data Exchange.

Example flip cart receipt send to customer when
product is sent.
EDI stands for Electronic Data Exchange. EDI is an
electronic way of transferring business documents in an
organization internally between its various departments
or externally with suppliers, customers or any
subsidiaries etc. In EDI, paper documents are replaced
with electronic documents like word documents,
spreadsheets etc.
 EDI Documents

Following are few important documents used in EDI:

Invoices
Purchase orders
Shipping Requests
Acknowledgement
Business Correspondence letters
Financial information letters
 EFT
Electronic funds transfer (EFT) is the electronic
exchange, transfer of money from one account to
another, either within a single financial institution or
across multiple institutions, through computer-based
systems.
Cardholder-initiated transactions, using a payment card
such as a credit or debit card
Question: What does "EFT (electronic funds transfer)"
mean?
Answer: The transfer of money from one account to
another by computer.
Back-end EC solution
All ERP vendor Like SAP oracle have also announced
Web Ec strategies and products like.
Peachtree software: complete package for web front and
managing order.
SBT corp Web trader is another c2b web ec package
work in LAN
Great plain software:
a: Dynamic merchant for c2b, dynamic order for b2b

A number of new startup vendor are starting to provide

front end ec
Media convergence
IT + Telecommunication + Media Technology = media convergence
Mobile= telephone + high speed data + broadcast services.
You can watch television on Mobile and computer.
Now a days analogue and digital work together or analogue
becoming digital.
Four types of convergence
Network convergence: different types of networks becoming
capable of carrying multiple kinds of communication services.
Terminal convergence:- making it possible to watch TV on mobile.
Market convergence:- different kind of market like IT, Tele and
media working together.
E-commerce
Architecture
 E-commerce Framework
Framework tells about the detail of how e-commerce can take
place.
It defines actually how e-commerce implemented, how online
trading or business can be done.
It defines important components that should be present to do
some transaction

However determining a right framework for ecommerce solutions

is a major challenge.
Most of the frameworks are quite general and usually depend on
the country or organization needs.
 Four Layer Framework
Barua et al.6 proposed a four-layer framework.
The Internet infrastructure layer addresses the issue of
backbone infrastructure required for conducting
business via the net.
It is Largely made up of telecommunication companies
and other hardware manufacturers such as computer
and networking equipment.
The Internet applications layer provides support systems
for the Internet economy through a variety of software
applications
 The Internet intermediary layer includes a host of
companies that participate in the market making
process in several ways.
Finally, the Internet commerce layer covers companies
that conduct business in an over all ambience provided
by the other three layers
Zwasss Hierarchical Framework
Zwass (1998) presented a very comprehensive
hierarchical framework of E-Commerce, consisting of
three meta-levels:
infrastructure,
services, and
products and structures and
seven functional levels
 This model clearly builds upon the work undertaken by
the developers of the various layered network
protocols or architectures, which have been developed to
explain the
inter-connection of telecommunications networking, such as
the OSI Reference Model.
which use a similar layering approach, where each layer
has a clearly defined area of functionality.
This separation of tasks means that a change at one layer
does not normally affect the other layers, with significant
positive implications for software developers.
The 3-Tier Architecture

The 3-Tier Architecture

This is where the code for each area of responsibility can be cleanly split away from the others
Note here that the presentation layer has no direct communication with the
data access layer - it can only talk to the business layer.
The Rules of the 3 Tier
Architecture
The code for each layer must be contained with separate files which can be maintained
separately.
Each layer may only contain code which belongs in that layer. Thus business logic can only
reside in the Business layer, presentation logic in the Presentation layer, and data access logic
in the Data Access layer.
The Presentation layer can only receive requests from, and return responses to, an outside
agent. This is usually a person, but may be another piece of software.
The Presentation layer can only send requests to, and receive responses from, the Business
layer. It cannot have direct access to either the database or the Data Access layer.
The Business layer can only receive requests from, and return response to, the Presentation
layer.
The Business layer can only send requests to, and receive responses from, the Data Access
layer. It cannot access the database directly.
The Data Access layer can only receive requests from, and return responses to, the Business
layer. It cannot issue requests to anything other than the DBMS which it supports.
 Disadvantage of this approach
The use of a similar approach to analysing E-Commerce would have
equivalent benefits in terms of separating out tasks and enabling
solutions to be developed without impact on other E-Commerce activities.
The disadvantage of this approach, however, is that there is less flexibility
because of the sequence of the layers. Why, for example, are there seven
layers?
We believe that the components of Electronic Commerce are
constantly changing over time and as particular technologies are
pressed into service.
The layering approach, which works very well for networking,
where the functions and activities can be fully described and do
not evolve outside the limits of the model, are thus less applicable
to the very mutable functions and activities of E-Commerce.
Kalakota and Whinston's
Pillars Framework
Kalakota and Whinston have also developed a generic approach to providing a framework for
Electronic Commerce (Kalakota & Whinston 1996).
Using a very different scheme from that taken by Zwass, they use the metaphor of pillars (public
policy and technical standards), to support four infrastructures
(network, multimedia content, messaging, and common business services)
on top of which they place E-Commerce Applications.
These authors suggest that the elements of a framework for E-Commerce are a convergence of
technical, policy and business concern. This model is simple to understand and visually attractive
but it lacks theoretical depth and is not
particularly useful for researchers endeavouring to incorporate it into empirical research
projects.

We believe that this model is useful for those who are approaching Electronic Commerce
for the first time but do not feel that it can be used as a foundation for more detailed
analytical study.
 Riggins and Rhee's Domain
Matrix
Riggins and Rhee (1998) have used the Harvard matrix approach to identify a
view of E- Commerce based upon type of relationship and internal/external focus.
This descriptive framework takes as its axes the location of the application
user and type of
relationship, thus essentially distinguishing between intranet-based
applications and
those which use either an extranet or the public Internet to provide access to the
applications concerned.
Such a model is clearly useful to companies which wish to classify their trading
partners into internal and external and, within these, into new and ongoing
relationships it categorises E-Commerce applications into four categories
which can be helpful in identifying relationships and technology needs.

 Despite these useful characteristics, however, the

model is limited in its identification of
E-Commerce types being primarily focused upon trading
relationships. It would be more
difficult to use such a model in the development of, say,
a government-sponsored virtual
community such as Victorias Warrnambool on the
Web project. (Warrnambool on the
Web 1999)
Requests and Responses in the 3
Tier Architecture
 If you look carefully at those layers you should see that
each one requires different sets of skills:
The Presentation layer requires skills such as HTML, CSS
and possibly JavaScript, plus UI design.
The Business layer requires skills in a programming
language so that business rules can be processed by a
computer.
The Data Access layer requires SQL skills in the form of
Data Definition Language (DDL) and Data Manipulation
Language (DML), plus database design.
Tier
What is a "tier"?
A "tier" can also be referred to as a "layer".
n the software world Tiers/Layers should have some or
all of the following characteristics:
Each tier/layer should be able to be constructed
separately, possibly by different teams of people with
different skills.
 Several tiers/layers should be able to be joined together
to make a whole "something".
Each tier/layer should contribute something different to
the whole. A chocolate layer cake, for example, has
layers of chocolate and cake.
There must also be some sort of boundary between one
tier and another. You cannot take a single piece of cake,
chop it up into smaller units and call that a layer cake
because each unit is indistinguishable from the other
units.
Each tier/layer should not be able to operate
independently without interaction with other
 Presentation logic - the user interface (UI) which
displays data to the user and accepts input from the
user. In a web application this is the part which receives
the HTTP request and returns the HTML response.
Business logic - handles data validation, business rules
and task-specific behaviour.
Data Access logic - communicates with the database by
constructing SQL queries and executing them via the
relevant API.
Three tier ecommerce architecture
What is a Domain Name?

New computer users often confuse domain names with universal

resource locators, or URLs, and Internet Protocol, or IP, addresses.
The universal resource locator, or URL, is an entire set of directions, and
it contains extremely detailed information.
The domain name is one of the pieces inside of a URL.
An Internet Protocol, or IP, address is different than a domain name
The IP address is an actual set of numerical instructions.
domain name as a nickname for that code so that can remember easily.
Ip could be 232.17.43.22, for example. However, humans cannot
understand or use that code.
That why name given to numeric which difficult to remember.
 For example, in the URL
http://www.pcwebopedia.com/index.html, the domain
name is pcwebopedia.com.
Every domain name has a suffix that indicates which
top level domain (TLD) it belongs to. There are only a
limited number of such domains.
Because the Internet is based on IP addresses, not
domain names, every Web server requires a
Domain Name System (DNS) server to translate domain
names into IP addresses
For example:
gov - Government agencies
edu - Educational institutions
org - Organizations (nonprofit)
mil - Military
com - commercial business
net - Network organizations
ca - Canada
th - Thailand
Difference between HTTP and HTTPS
HTTP, HTTPS
The "S" in HTTPS indicates a secure site.
If you visit a web site or web page, and look at the address in the web
browser.
it will likely begin with the following: http://. This means that the web
site is talking to your browser using the regular 'unsecured' language.
This is why you never ever enter your credit card number in an http
web site
But if the web address begins with https://, your computer is talking
to the web site in a secure code that no one can see.
 Difference Between the Internet
and the WWW?
People commonly use the words "Internet" and "Web"
interchangeably.
This usage is technically incorrect.
The Internet is the large container.
the Web is a part within the container.
the Net is the restaurant.
the Web is the most popular dish on the menu
The World Wide Web, or "Web" for short, is a massive
collection of digital pages.
 the Web is based on hypertext transfer protocol.
But another protocol you can use like ftp etc.
Only http is www another is not.
The Internet, not the Web, is also used for e-mail, which
relies on SMTP, instant messaging and FTP.
So the Web is just a portion of the Internet
Characteristics of Domain Name
Domain names are restricted to
only the ASCII letters 'a' through 'z' (in a case-
insensitive manner).
the digits '0' through '9.
and the hyphen ('-').
 Parts of a Domain Name
Each domain name consists of two parts.
Top Level Domain - A top-level domain (TLD) is the part of the
domain name located to the right of the dot. The most common
top-level domains are .COM, .NET, and .ORG. Some other
popular top-level domains are .BIZ, .INFO, .NAME and .IN etc.
Second Level Domain - . The second-level domain name is the
part of the domain name located to the left of the dot. Steps-to-
make-your-own-website is the second-level domain name and
represents the organization or entity behind the internet.
Second Level Domain name must be registered with an Internet
Corporation for Assigned Names and Numbers (ICANN)-
accredited registrar.
 Domain Name Level
Top Level Domain - A top-level domain (TLD) is the part of the
domain name located to the right of the dot. The most common
top-level domains are .COM, .NET, and .ORG. Some other
popular top-level domains are .BIZ, .INFO, .NAME and .IN etc.
Generic top level maintained by IANA and country code top level
reserved for a country.
Second Level Domain - . The second-level domain name is the
part of the domain name located to the left of the dot.
Third level domain name:-which are written immediately to
the left of a second level Domain.
Each level is separated by a dot or period symbol.
 What is a Subdomain?
A subdomain is a domain name that is a part of the
main domain.
It is used to organize a website with regard to various
functions, sections, topics, etc.
For example www.google.com is the main domain
name.
They have separated Gmail, that handles their mail
section of the website as mail.gmail.com.
Similarly they have other subdomains too which are
other sections of their main website.
like maps.google.com, news.google.com,
 What is DNS?
DNS is the acronym for Domain Name System.
This system translates the number format of your IP
address to the word format.
It is done because it is relatively easier to remember words
than numbers.
it is easier to name an e-mail address as
service@sitesell.com than service@216.95.221.39.
The Domain Name System (DNS) is a hierarchical
distributed naming system for computers, services, or any
resource connected to the Internet or a private network
 Digital Certificate
An attachment to an electronic message used for security purposes
It is trusted ID card in electronic form that binds a websites public
encryption key to their identity for the purpose of public trust.
The most common use of a digital certificate is to verify that a user
sending a message is who he or she claims to be, and to provide
the receiver with the means to encode a reply.
An individual wishing to send an encrypted message applies for a
digital certificate from a Certificate Authority (CA).
The CA issues an encrypted digital certificate containing the
applicant's public key and a variety of other identification
information.
 In the physical world, you protect your written
correspondence by putting it in an envelope before
posting. In the online world, sending an email message
is like sending a postcard.
it is easy to intercept and read as it travels across the
Internet. Instead of risking disclosure of your private
email message,
one option for safeguarding them is to use a digital
certificate