E Commerce

MIS
E-Commerce
What is E-commerce?
• Electronic commerce: buying and selling of goods and
services, or the transmitting of funds or data, over an
electronic network, primarily the internet.
• These business transactions occur either as
• business-to-business (B2B),
• business-to-consumer (B2C),
• consumer-to-consumer (C2C)
• consumer-to-business (C2B)
Business to Business E-commerce
• Connecting business partners in a virtual supply chain to cut
resupply times and reduce costs.
• B2B market is considerably larger and grow rapidly
• In US, B2B sales estimated to reach $1.8 trillion by 2023.
• Moving more customers online is key to B2B commerce
success.
• B2B companies are focusing on new ways of engaging their
customer across Multiple channels – both online and offline.
• On average B2B buyer uses six different channels in the
decision to purchase.
Examples
• Apple – Samsung, Intel
• Nissan – Bosch
• Amazon business
• Indiamart
• Etc..
Business to customer E-commerce
• B2C: the process of selling products and services directly
between a business and consumers who are the end-users
of its products or services (through internet).
• When compared to buying retail in traditional commerce,

the consumer usually has more information available in
terms of informative content and
• there is also a widespread idea that you’ll be buying
cheaper, without jeopardizing an equally personalized
customer service, as well as ensuring quick processing and
delivery of your order.
Business to customer E-commerce
Customer to customer e-commerce
• Consumer-to-Consumer (C2C) type e-commerce encompasses all
electronic transactions of goods or services conducted between
consumers. Generally, these transactions are conducted through a third
party, which provides the online platform where the transactions are
actually carried out.
E-Government
• Use of information and communications

technology to:
• Simplify information sharing
• Speed formerly paper-based processes
• Improve relationships between citizens and
government
• Forms of e-government:
• Government-to-citizen/consumer (G2C)
• Government-to-business (G2B)
• Government-to-government (G2G)
Stair/Reynolds, Principles of Information Systems, 14th Edition. © 2021 Cengage. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Introduction to M-Commerce
• Concepts and strategies stayed the same,

but tactics of e-commerce had to change
• Smaller-sized user interface
• Mobile commerce (m-commerce) relies on
use of wireless devices to place orders and
conduct business
• Smartphones and tablets
M-Commerce in Perspective
• North America m-commerce market

• Maturing much later than that in other countries
• In 2017 m-commerce accounted for 35
percent of all e-commerce sales
• By 2021, its portion of e-commerce sales is
expected to reach 54 percent
• The number of mobile Web sites worldwide
has grown rapidly
• Advances in wireless broadband technologies
M-Commerce Sites
Ran Company
k
1 eBay
2 Amazon
3 Apple
4 Burberry
5 John Lewis
6 Lush
TABLE 9.4 Highly rated m-commerce retail Web sites
Advantages of E-Commerce
• Conversion to an e- or m-commerce
system enables organizations to:
• Reach new customers
• Reduce costs
• Speed the flow of goods and information
• Increase the accuracy of orders
• Improve customer service
Multistage Model for E-Commerce
(1 of 3)
FIGURE 9.2
Multistage model for
e-commerce (B2B and B2C)
A successful e-commerce
system addresses the stages that
consumers experience in the sales
life cycle.
(2 of 3)
• A successful e-commerce system must
address the many stages that consumers
experience in the sales life cycle
• Search and identification
• Select and negotiate
• Purchase products and services electronically
• Deliver products and services
• After-sales service
(3 of 3)
FIGURE 9.3
Product and Information flow When a customer orders an HP printer online, the order goes first to FedEx,
which ships the order, triggering an email notification to the customer and an inventory notice to HP.
E-Commerce Challenges
• Three key challenges to e-commerce

• Dealing with consumer privacy concerns
• About one-third of all adult Internet users will not buy
online due to privacy concerns
• Overcoming consumers’ lack of trust
• Online marketers must create specific trust-building
strategies for their Web sites
• Overcoming global issues
• Cultural, language, time and distance, infrastructure,
currency, and law challenges
E-Commerce and M-Commerce
Applications
• Areas in which applications are used
• Wholesale e-commerce
• Manufacturing
• Marketing
• Advertising
• Bartering
• Retargeting, price comparison, and couponing
• Investment and finance
• Banking
• Online personalized shopping
Strategies for Successful
E-Commerce and M-Commerce
• Companies must develop effective Web
sites that include the following
characteristics:
• Easy to use
• Accomplish the goals of the company
• Safe and secure
• Affordable to set up and maintain
Defining an Effective E-Commerce
Model and Strategy (1 of 2)
• Company’s decision on the effective e-
commerce model it wants to use
• First major challenge for a successful
e-commerce site
• Three components of a successful model:
• Community
• Content
• Commerce
Defining an Effective E-Commerce
Model and Strategy (2 of 2)
FIGURE 9.11
Content, commerce, and
community
A successful e-commerce model
includes three basic components.
Defining the Functions of a Web Site
• Decide which tasks the site must

accomplish
• Create an attractive presence for the
company
• Meet visitor needs
• Redefine the site as needed
Establishing a Web Site
• Web site hosting companies

• Set up a Web page and conduct e-commerce
within a matter of days
• Little up-front cost
• Storefront broker
• Company that acts as an intermediary between
your Web site and online merchants who have
the products and retail expertise
Building Traffic to Your Web Site
• Measures to attract customers

• Obtain and register a domain name
• Make your site search-engine friendly
• Listing link and other resources
• Use Web site traffic data analysis software
• Provide quality, keyword-rich content
• Consider paying the search engine companies to
include you as a “sponsored” ad
• Add new content on a regular basis
• Acquire links to your site from other Web sites
Maintaining and Improving Your Web
Site
• Personalization: process of tailoring Web
pages to specifically target individual
consumers
• Two types of personalization techniques to
capture data and build customer profiles
• Implicit personalization captures data from customer
Web sessions
• Explicit personalization captures user-provided
information
Technology Infrastructure Required to
Support E-Commerce and M-Commerce
• Poor Web site performance drives
consumers to abandon some e-commerce
sites in favor of those with better, more
reliable performance
• Slow response time, inadequate customer
support, and lost orders
Hardware (1 of 2)
• The Web server’s storage capacity and

computing power depend on:
• Software that must run on the server
• Volume of e-commerce transactions to be
processed
• Successful e-commerce solutions are
designed to be highly scalable
• Can be upgraded to meet unexpected user
traffic
Hardware (2 of 2)
• Key decision for a new e-commerce

company
• Choosing whether to host its own Web site or
to enlist a third-party Web service provider
Web Server Software
• Fundamental services performed by Web

server software:
• Security and identification
• Retrieving and sending Web pages
• Web site tracking
• Web site development
E-Commerce Software
• Five core tasks that must be supported by

e-commerce software:
• Catalog management
• Product configuration
• Shopping cart facilities
• E-commerce transaction processing
• Web traffic data analysis
M-Commerce Hardware and Software
• Limitations of handheld devices that

complicate use
• Screens are small
• Less processing power and less bandwidth
than desktop or laptop computers
• Operate on limited-life batteries
• Web developers must often rewrite Web
applications so users with mobile devices
can access them more efficiently
Electronic Payment Systems (1 of 4)
• Authentication technologies
• Used by many organizations to confirm the
identity of a user requesting access
• Digital certificate
• Attachment to an e-mail message or data
embedded in a Web site that verifies the
identity of a sender or Web site
• Certificate authority (CA)
• Trusted third-party organization or company
that issues digital certificates
• Various measures are being implemented

to increase the security associated with the
use of credit cards
• Address Verification System is a check built
into the payment authorization request
• Compares the address on file with the address
provided by the cardholder
• Card Verification Number
• Check of the additional digits typically printed on the
back of the card
• Transport Layer Security (TLS)

• Communications protocol that ensures privacy
between communicating applications and their
users on the Internet
• Electronic cash
• Amount of money that is computerized, stored,
and used as cash for e-commerce transactions
• Credit, charge, debit, and smart cards
• Many online shoppers use credit and charge
cards for most of their Internet purchases
Payment
System Description Advantages Disadvantages
Carries preset spending limit The unpaid balance accumulates

Each month the user can pay all or
Credit card based on the user’s credit part of the amount owed. interest charges—often at a high
history rate of interest.
Looks like a credit card but Does not involve lines of credit and The entire amount charged to the
Charge card carries no preset spending does not accumulate interest card is due at the end of the billing
limit charges period or the user must pay a fee.
Looks like a credit card or
Operates like cash or a personal Money is immediately deducted
Debit card automated teller machine
(ATM) card check from user’s account balance.
Is a credit card device with Better protected from misuse than

embedded microchip capableconventional credit, charge, and Slowly becoming more widely
Smart card
of storing facts about debit cards because the smart card used in the United States</TBTX1>
cardholder information is encrypted
TABLE 9.8 Comparison of payment systems
Summary (1 of 2)
• Organizations must define and execute an

effective strategy to be successful in e-
commerce
• E-commerce is evolving, providing new
ways of conducting business that present
both potential benefits and potential
problems
Summary (2 of 2)
• E-commerce can be used in many

innovative ways to improve the operations
of an organization
• E-commerce requires the careful planning
and integration of many technology
infrastructure components

E Commerce

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E Commerce

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MIS

• When compared to buying retail in traditional commerce,

• Use of information and communications

• Concepts and strategies stayed the same,

• North America m-commerce market

TABLE 9.4 Highly rated m-commerce retail Web sites

• Three key challenges to e-commerce

• Decide which tasks the site must

• Web site hosting companies

• Measures to attract customers

• The Web server’s storage capacity and

• Key decision for a new e-commerce

• Fundamental services performed by Web

• Five core tasks that must be supported by

• Limitations of handheld devices that

• Various measures are being implemented

• Transport Layer Security (TLS)

Carries preset spending limit The unpaid balance accumulates

Is a credit card device with Better protected from misuse than

TABLE 9.8 Comparison of payment systems

• Organizations must define and execute an

• E-commerce can be used in many

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