College of Education
School of Continuing and Distance Education2017
INFS 401
AUTOMATION OF
INFORMATION SYSTEMS
Session 11 – THE FUNDAMENTALS OF E-COMMERCE
Lecturer: Prof. Ellis Edwin Badu, Dept. of Information Studies Contact Information: [email protected]
Session Overview
Welcome to Session 11 the fundamentals of E-Commerce. Section attempts to explain what E-Commerce is, the scope of E-Commerce and the essential processes of E-Commerce.
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Session Outline
By the end of this section you should be able to
• Explain what E-Commerce is
• Describe E-Commerce architecture
• Understand the essential processes of E-commerce
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Reading List
• Burton Paul and Peteric Howard (1991) Information Management Technology. London: Chapman and Hall
• Clayton Marlene (1992) Managing Library Automation. London: Ashgate• Haag, Stephen (2002) Management Information System for the
Information Age. N.Y: McGraw-Hill• Kimber T. R. (1974) Automation in Libraries N. Y.: Pergamon Press • Mayo, William E. (1991) Introduction to Computing for Engineers. Y.N.:
Mc Graw-Hill• O’Brien, James (2003) Introduction to Information System Boston:
McGraw-Hill• Rosenblatt, Snelly (2006) Systems Analysis and Design 6th ed. Boston:
Thompson Course Technology• Wright Keith (1993) Computer-related technologies in Library
Operations. Gower
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E-COMMERCETopic One
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ELECTRONIC BUSINESS
eBusiness (e-Business) or Electronic Business is the administration of conducting business via the Internet. This includes the buying and selling of goods and services, along with providing technical or customer support through the Internet.
Electronic Business is a broader term that encompasses other common terms such as e-commerce and e-tailing it refers to the use of the Web, Internet, intranets, extranets or some combination thereof to conduct business.
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ELECTRONIC BUSINESS CONT’D
E-Business goes beyond the simple buying and selling of products and services online. E-Business includes a much wider range of business processes such as supply chain management, electronic order processing and customer relationship management.
E-Commerce (electronic commerce or EC) falls under the broad heading of electronic business. E-commerce is the buying and selling of goods and services, or transmitting of funds or data, over an electronic network, primarily the Internet.
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HISTORY OF E-COMMERCE
The beginnings of e-commerce can be traced to the 1960s, when businesses started using ELECTRONIC DATA INTERCHANGE (EDI) to share business documents with other companies. In 1979 The American National Standards Institute developed ASCX12 as a universal standard for business to share documents through electronic networks. After the number of individual user sharing electronic documents with each other grew in the 1980s, in the 1990s the rise of eBay and Amason revolutionized the e-commerce industry. Consumers can now purchase endless amounts of items online, both from typical brick and mortar stores with e-commerce capabilities and one another.
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E-COMMERCE APPLICATION
E-Commerce is conducted using a variety of applications, such as email, online catalogs and shopping cart, EDI, File Transfer Protocol and web services. This includes business-to-business activities and outreach such as using email for unsolicited ads to consumers and other business prospects as well as to send out e-newsletters to subscribers. More companies now try to entice consumers directly online using Tools such as digital coupons social media marketing and targeted advertisements.
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E-COMMERCE APPLICATION CONT’D
Benefits of e-commerce include its around-the-clock availability, the speed of access, the wide availability of goods and services for the consumer, easy accessibility, and international reach. Its perceived downsides include sometimes limited customer service, consumers not being able to see or touch a product prior to purchase and the waiting time for shipping.
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SCOPE OF E-COMMERCE
There are four basic categories of E-commerce applications
• Business-to-Consumer B2C
• Business-to-Business B2B
• Consumer- to-Consumer C2C
• Consumer-to-Business C2B
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BUSINESS-TO-CONSUMER (B2C) E-COMMERCE
This is used to describe a transaction conducted over the internet between a business and a consumer for his/her personal use. Eg. Someone buying a TV set from an electronics retailer would be B2C transaction. Any e-commerce website like Amazon. Flipkart, Snapdealetc. are the best example of B2C.
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BUSINESS-TO-BUSINESS (B2B) E-COMMERCE
This is selling products or services between businesses through the Internet via an online sales portal. In general, it is used to improve efficiency for companies. Instead to processing orders manually – by telephone or e-mail- with e-commerce, orders can be processed digitally. Supply chains are distinctive for B2B transactions. They involve companies providing components or raw materials from one to another.
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BUSINESS-TO-BUSINESS (B2B) E-COMMERCE
For example, an automobile manufacturer makes several B2B transactions such as buying tires, glass for windscreens and rubber hoses for its vehicles. A final transaction, a finished vehicle sold to the consumers is a single B2B transaction. Examples of B2B. Industrial supply – Grainger, MSC Industrial, Fastenal, McMaster-Carr, Ferguson, Parts Now. Office supplies – Staples, Quill, Office Max Alibaba, Carolina Biological.
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CONSUMER – TO – CONSUMER
It is a business model that facilitates the transaction of products or services between customers. Examples is the classifieds section of a newspaper or an auction. In both of these cases, a customer, not a business sells goods or services to another customer. E-bay Criaghest is an website and leading service for classified ads consumer buy and sell and conduct other transactions such as housing and job searches.
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CONSUMER – TO – BUSINESS E-COMMERCE
This is a business model in which consumers (individuals) create value and business consume the value. Another form of C2B is the electronic commerce business model in which consumers can offer products and services to companies and the companies pay the consumers.
A consumer provides a business with a fee based opportunity to market their products on the consumer’s blog. It is a reversal of the traditional business model of B2C. Examples could be a blogger of a photographer offering stock images to businesses.
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ESSENTIAL E-COMMERCE PROCESS
For E-Commerce operators to be successful, the following nine key components of E-Commerce processes are required.
• Access Control & Security
• Profiling and Personalising
• Search Management
• Content Management
• Catalogue Management
• Work flow Management
• Event Notification
• Collaboration and Tracking
• Electronic Payment Powers
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ESSENTIAL E-COMMERCE PROCESS CONT’D
ACCESS CONTROL AND SECURITY
E-commerce process must establish mutual trust and secure access between the parties in an e-commerce transaction by authenticating users authorizing access and enforcing security features. Access Control and Security make sure that a customer and the e-commerce site are who they say they are through user name password encryption keys or digital certificates and signatures. The e-commerce site authorizes access to only those parts of the site that an individual user needs to accomplish his or her transactions.
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ESSENTIAL E-COMMERCE PROCESS CONT’D
PROFILING AND PERSONALISING
Data is gathered on anyone who visits an e-commerce website as well as his behavior and choices and preferences. User profiles are developed using profiling tools such as user registration cookie files, website behavior tracking software and user feedback. People are recognized using these profiles and are provided with a personalized view of the contents of the site as well as product recommendation and personalized Web advertising as past of a one – to –one marketing strategy.
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ESSENTIAL E-COMMERCE PROCESS CONT’D
SEARCH MANAGEMENT
E-commerce must have an efficient and effective search system that will help customers to find the specific product they want to check or buy. This is achieved by using a good website search engine. Some of these search engine software may be acquired from companies such as EXCITE and REQUISITE TECHNOLOGY.
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ESSENTIAL E-COMMERCE PROCESS CONT’D
CONTENT AND CATALOG MANAGEMENT
E-Commerce content frequently takes the form of multimedia catalogs of product information so generating and managing catalog content is a major subset of content management. Content management software helps e-commerce companies develop, generate, deliver, update and archive text data and multimedia information at e-commerce websites.
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ESSENTIAL E-COMMERCE PROCESS CONT’D
WORKFLOW MANAGEMENT
A workflow management software is used to manage and partially automate many e-commerce applications. Workflow systems ensure that the proper transactions, decisions, and work activities are performed and the correct data and documents are routed to the right employees, customers, suppliers and other business stakeholders.
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ESSENTIAL E-COMMERCE PROCESS CONT’D
EVENT NOTIFICATIONMost e-commerce applications are event-driven systems that respond to a multitude of events from a new customers first website access, to payment and delivery processes, and to innumerable customer relationship and supply chain management activities. Customers, suppliers, employees and other stakeholders are notified of all events that might affect their status in a transaction. Event notification software works with the workflow management software to monitor all e-commerce processes, and record all relevant events including unexpected changes or problem situations. It also works with user-profiling software to automatically notify all involved stakeholders of important transaction events using appropriate user-preferred methods of electronic messaging such as e-mail, newsgroup, pager and fax communications.
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ESSENTIAL E-COMMERCE PROCESS CONT’D
Collaboration and Trading
Tools such as e-mail, chat systems and discussion groups are used to nurture online communities of interest among employees and customers to enhance customer service and build another loyalty in e-commerce.
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ESSENTIAL E-COMMERCE PROCESS CONT’D
Electronic Payment Process
Electronic Payment System is a way of making transaction or paying for goods and services through an electronic medium without the use of cheque or cash. It is also called e-payment or online payment.
Methods of electronic payments include credit-card payment process, Electronic funds transfer, micro payment systems and secure electronic payments. For all these methods of electronic payment, there are three main types of transactions.
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ESSENTIAL E-COMMERCE PROCESS CONT’D
• A one-time customer-to-vendor payment. This is commonly used when you shop online at an e-commerce site such as Amazon. You click on the shopping cart icon, type in your credit card information and click on the check out button. The site processes your credit card information and sends you an e-mail notifying you that your payments was received. Can also use an electronic funds transfer.
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ESSENTIAL E-COMMERCE PROCESS CONT’D
• Recurring Customer- to – vendor payment - This is when you pay a bill through a regularly scheduled direct debit from your current account or an automatic charge to your credit card. This type of payment plan is commonly offered by car insurance companies, phone companies and loan management companies. Some long time contracts require this type of automated payment schedule.
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ESSENTIAL E-COMMERCE PROCESS CONT’D
• Automatic bank-to-vendor payment bank offers a service called online bill pay. You log to your banks website, enter the vendors information and authorize your bank to electronically transfer money from your account to pay your bill, In most cases, you can choose whether to do this manually for each billing cycle or have your bills automatically paid on the same day each month.
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References
• Burton Paul and Peteric Howard (1991) Information Management Technology. London: Chapman and Hall
• Clayton Marlene (1992) Managing Library Automation. London: Ashgate• Haag, Stephen (2002) Management Information System for the
Information Age. N.Y: McGraw-Hill• Kimber T. R. (1974) Automation in Libraries N. Y.: Pergamon Press • Mayo, William E. (1991) Introduction to Computing for Engineers. Y.N.:
Mc Graw-Hill• O’Brien, James (2003) Introduction to Information System Boston:
McGraw-Hill• Rosenblatt, Snelly (2006) Systems Analysis and Design 6th ed. Boston:
Thompson Course Technology• Wright Keith (1993) Computer-related technologies in Library
Operations. Gower
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THANK YOU
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