IST 1101

Foundations of Information
Systems and Technology

Lecture 6
 Introduction to
Electronic Commerce
(e-Commerce) and E-
Business
 Introduction to Electronic Services
• The application of ICTs to support service delivery in
businesses, government organizations,
community/society has resulted in terminologies such as:
– E-Commerce and E-Business
– E-Government and E-Governance
– E-Health
– E-Learning and E-education
– E-Agriculture
– etc
• The above instances of e-services are covered in another
course unit. 4 PART 2 Elaborates e-commerce
 Role of e-Business in Business

• Many businesses today are using internet

technologies to:
1. Web-enable business processes
2. Create innovative e-business applications
Role of e-Business in
Business
 E-Commerce (1)
• Is the buying, selling, marketing and servicing of products,
services and information over a variety of computer networks
• Many businesses now use the internet, intranets, extranets and
other networks to support every step of the commercial process
– The commercial process includes:
• Advertising,
• Sales,
• Customer support on the WWW,
• Security & payment mechanisms
Food for thought for you: What is the difference between
Internet and WWW (or web)?
 E-Commerce (2)
• Internet has been realised as a cost-effective channel for
distributing information and or products.

• Internet initially used to facilitate communication by email,

now its potential tapped for dissemination of product & other
marketing information.
– Which internet-based ways are currently being used to
disseminate product and marketing information?

• Organisations with physical infrastructure use the web to

enhance their distribution channels, e.g. bank statements,
ordering of products
 Broad Categorization of E-commerce
• Business-to-consumer (B2C)
– Organisations provide information online to customers, who order
and pay for products via internet
– We see this in our interactions with: banks, hotels, hospitals,
universities etc
• Business-to-business (B2B)
– Business partners collaborate electronically
– We see this with: distributed & integrated information systems in
the banking sector (EFT), medical sector, trade sector (e.g. the
recent “asycuda world” service)
• Consumer-to-Consumer (C2C)
– individuals sell products or services directly to other individuals
– Online auctions or retailers like E-bay, Amazon, etc
 E-Commerce Technologies
• Network Infrastructure: internet, intranet, extranets.
Remember you came across these when attempting
class task in chapter 2
• Software tools: for website dev’t & maintenance,
secure ordering & payment methods.
• Resources for information sharing, communication &
collaboration.
***m-commerce: where e-commerce is done in a
wireless environments e.g. using cellphones.
 B2C e-commerce
• Sellers are organisations & buyers are individuals
• Search engines are used to locate & compare
products/services without restrictions.
• Customers are able to make enquiries about
products, place orders, pay accounts & obtain
service support via internet at anytime from
anywhere.
• A lot of work has to be done by the company to
ensure that customers visit the website, will use it,
and return after their first visit.
 E-Commerce website
should:
• Be attractive to look at
• Be easy to use
• Offer customers easy performance through
supporting personalisation
• Provide incentives to purchase
• Ensure high level of security
• Encourage customer loyalty: offer discussion forums
& links to related sites, discounts
Food for thought for you: Which websites do you know that posses at least one
of these qualities listed above?
 B2B e-commerce

• Both sellers & buyers are business organisation.

• Comprises e-transactions involving supply chain
between organisations and their distributors, resellers,
suppliers & other partners.
• B2B e-commerce has lead to efficient mgt of the
supply chain:
– cuts costs and hence increases profits
– improves relationships with customers & suppliers
 B2B Technologies
• Email: support communication in
organisations

• Electronic Data Interchange (EDI): enables

• Electronic Funds Transfer (EFT)

 C2C e-commerce
• Involves electronically-facilitated transactions between
individuals, often through a third party
• Commonly practiced through online auctions.
– an individual can list an item for sale and other individuals
can bid to purchase it
– Auction sites act as intermediaries who match buyers with
sellers, charge commission to the sellers using them, and
have little control over the quality of the products offered
• Other C2C activities include:
– Online classified advertising, online retailers (like Amazon)
– selling of personal services e.g. medical advice e.t.c.
 Growing business importance of e-
commerce
• E-commerce enables market expansion with
minimal capital outlay
• E-commerce improves procurement and
marketing and increases consumer choice
• However, there is still a need for: universally
accepted standards for information quality
and security, and the provision of sufficient
telecommunications bandwidth
 Current issues in E-Commerce
• Hardware & telecom infrastructure reliably
running all the time.
• Easy to use & reliable software (for handling
loads of transactions).
• Gaining trust of customers.
• Access control to personal / financial
information.
• Website customisation to appeal to people of
different backgrounds (nationality, culture)
 Class Task 4.2
• With examples, discuss at least two benefits
and at least two limitations of e-commerce to
organisations, customers and society.

• Distinguish e-business and e-commerce

 Electronic Commerce

• Electronic Commerce (EC) is where business

transactions take place via telecommunications
networks, especially the Internet.
– Electronic commerce describes the buying and selling
of products, services, and information via computer
networks including the Internet.
– The infrastructure for EC is a networked computing
environment in business, home, and government.
– E-Business describes the broadest definition of EC. It
includes customer service and intrabusiness tasks. It
is frequently used interchangeably with EC.
18
 The Driving Forces of
Electronic Commerce
• The New World of Business
– Business pressures
– Organizational responses
– The role of Information Technology (including
electronic commerce)

19
 Electronic Commerce Terms
• Business-to-business (B2B)
– Businesses make online transactions purchases
with other business
• Business-to-consumer (B2C)
– Online transactions between businesses and
consumers
• Consumer-to-Consumer (C2C)
– Online auctions, posting to newspaper sites,
personal websites, e-commerce portals
20
 Electronic Commerce Terms
(cont.)
• Pure vs. Partial EC: based on the degree of digitization
of
– Product
– Process
– Delivery agent
• Traditional commerce: all dimensions are physical
• Pure EC: all dimensions are digital
• Partial EC: all other possibilities include a mix of digital
and physical dimensions

21