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Copyright © 2004 Pearson Education, Inc. Slide 6-1 E-Commerce Applications Supreet Wahee BCA –VI
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Copyright copy 2004 Pearson Education Inc Slide 6-1
E-Commerce Applications
Supreet Wahee
BCA ndashVI
Copyright copy 2004 Pearson Education Inc Slide 6-2
What is today about
Getting around
( Self Introduction Exercise)Name
School
Career Aspirations
An adjective that describes you starting from the first alphabet of your name
Ground rules
Copyright copy 2004 Pearson Education Inc Slide 6-3
Unit 1
E-Commerce Basics
Learning Objectives Overview of e-Commerce E-business E-business Vs Traditional business Applications of e-Commerce Advantages Disadvantages of E-business Functions of e-Business Business Models Types of E-commerce Convergence ndashMedia convergence Multimedia Content for e-commerce applications Multimedia Storage Servers amp electronic Commerce
applications information delivery transport amp e-commerce applications
Consumer Access devices know about various Applications of ndashEcommerce
E-business framework architecture
Copyright copy 2004 Pearson Education Inc Slide 6-5
Overview
E- Commerce amp E-Business
Meaning of E-commerce
Buying
Selling
Marketing
amp Servicing
Computer Networks
Electronic Commerce
Internet intranets extranets amp other networks
Enterprise
Uses
Of
Product
Services
Information
Over
What is E-commerce It stands for Electronic commerce
E-Commerce is buying and selling of products or services over the electronic systems such as Internet anytime anywhere with anyone
E-Commerce is the ability to deliver products services information or payments via networks such as Internet
Electronic commerce is a general concept covering any form of commercial transaction or information exchange executed using information amp communication technologies (ICTrsquos)
Scope of E-commerce E-commerce covers the following activities E-tailing Electronic Data Interchange (EDI) Email amp fax Business to consumer selling Business to business buying amp selling Security of Business transactions
E-commerce Vs Traditional Commerce
In E-commerce
Everything is digital
Less overhead costs
Elimination of the middleman
Financial transactions on the internet can actually be more secure in traditional environments
Speed
personalization
E-commerce definition
E-COMMERCE vs TRADITIONAL COMMERCE Key elements E-commerce Traditional commerce Technology Technology enabled carried
through internet EDI amp other technologies
Does not use Modern technology
Pricing Low prices as distribution cost are minimum
Often higher prices due to the cost of intermediaries or middleman
Competitive edge Based on smarter products innovations low prices etc
Based on improved products
Entry Barrier No entry barriers as regards space time capital one can start online operations anytime
They are entry barriers
Customer interface Screen-to-face Face-to-face Communication Technology-mediated channels Personal Accessibility 24 x 7 Limited time Customer interaction
Self-service Seller influenced
Consumer behavior Personalization One-to-one marketing
Standardization Massone-way marketing
Product Commodity Perishables feel amp touch
Modes of e-commerce Mainstream of e-commerce covers the following three areas
E-Business E-Business refers to online transactions including interactions
with business partners customers and vendors E-Business interactions are aimed at improving business processes and efficiency
The term ldquoE-Business therefore refers to the integration within
the company of tools based on information and communication
technologies (generally referred to as business software) to
improve their functioning in order to create value for the
enterprise its clients and its partners
Scope of E-business Production ndashfocused process these include
procurement ordering automated stock replenishment payment processing amp other electronic links with suppliers as well as production control amp processes more directly related to the production processes
Customer Focused processes these include marketing electronic selling processing of customerrsquos orders amp payments amp customer management amp support
Internal or Management ndashfocused processes These include automated employee services training information sharing video ndashconferencing amp recruiting
E-business objectives E-Business is a conduct of business on the internet
In E-business organization have several goals in mind Reach new markets Create new products and services Build customer loyalty Make the best use of existing and emerging technologies Achieve market leadership and competitive advantage
15
Six Key Business Process that can be looked to E-enable
Company
AccountingBilling Inventory Control
Procurement
HR
CRM
Marketing
16
E-business Opportunities Tourism amp travel Sector Banking Sector Healthcare Sector Stock Sector Financial Sector
E-business Functions E-Advertising E-catalogue E-publishing E-Banking E-Procurement E-BiddingE-Auction E-Communication E-Trading
18
Difference between E-business And Traditional Business
Reduction of data error
Reduction of cost
Reduction of paper Work
Reduction of process Cycle time
19
Electronic commerce (e-commerce EC) The process of buying selling transferring or exchanging products services andor information via computer networks including the Internet
E-business A broader definition of EC including buying and selling of goods and services and also servicing customers collaborating e-learning and conducting electronic transactions within an organization
Overview of E-Business and E-Commerce
E-Commerce amp E-Business
E-Commerce is what you dohellipE-Business is what you arehellip
bull Marketingbull Sellingbull Buying of
products and services on the Internet
E-Businessbull Enterprise designed for success
in the Information Agebull Creates new sources of shareholder
valuendash Building customer loyaltyndash Optimizing business processndash Creating new products and servicesndash Managing risk and compliancendash Reaching new marketsndash Enhancing human capitalndash Harnessing technologyndash Achieving market leadership
E-Commerce
Advantages of E-commerceOnline Business
All Time processing Economy Better Customer services Quick Comparison shopping Productivity gains Teamwork Information sharing convenience and control Fast and Time saving Customization
Limitations Cost factor System and data integrity System scalability Reliability Fulfillment and customer relationship problems Products people resist buying online Cultural language and trust issues Lack of customer Awareness High risk of Internet start-up
23
Benefits of E-commerceBenefits to organization
The availability of natural and international markets The decreased cost of processing distributing and retrieving information
Benefit to customerThe access to a vast number of products and services around the clock
Benefit to society The ability to deliver information services and product to people in cities in rural areas and in developing countries
24
Limitations Technological
The lack of universally accepted quality security and reliability standards
Insufficient telecommunication bandwidth
Need for special web servers in addition to network servers
Expensive accessibility
Nontechnological
A perception that EC is insecure
Unresolved legal issue
A lack of a critical mass of sellers and buyers
Opportunities Of E-commerce
bullProperty
transactions
bullsale amp Purchase of
goods
bullInsurance
bullBanking
bullOnline share
trading
bullPayment of taxes
amp services
bullTransportation
bullRenewal of
licenses
bullElectronic
payments
bullImport amp export
bullTravel amp Tourism
bullSecret information
amp coded online are
used by defense
forces
bullDesigning amp
development of
weapons and
information about
nuclear weapon
bullResearch in case
of new model
bullBooking of
tickets for
cinemas amp
concerts online
bullOnline games ndash
chess checkers
amp scrabble
bullMovies TV
bullOnline music
bullOnline education
bullDistant training amp
learning
bullVirtual university amp
tele- conferencing
bullResearch work
online
bullExpert Consultation
via audio amp video
Conf
bullTreatment amp
diagnosis online
bullEncyclopedia
Britannica online
bullCD-Rom refer -
Microsoft Encarta
Dictionaries amp
Thesauri
Copyright copy 2004 Pearson Education Inc Slide 6-26
A Quick Check
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Copyright copy 2004 Pearson Education Inc Slide 6-2
What is today about
Getting around
( Self Introduction Exercise)Name
School
Career Aspirations
An adjective that describes you starting from the first alphabet of your name
Ground rules
Copyright copy 2004 Pearson Education Inc Slide 6-3
Unit 1
E-Commerce Basics
Learning Objectives Overview of e-Commerce E-business E-business Vs Traditional business Applications of e-Commerce Advantages Disadvantages of E-business Functions of e-Business Business Models Types of E-commerce Convergence ndashMedia convergence Multimedia Content for e-commerce applications Multimedia Storage Servers amp electronic Commerce
applications information delivery transport amp e-commerce applications
Consumer Access devices know about various Applications of ndashEcommerce
E-business framework architecture
Copyright copy 2004 Pearson Education Inc Slide 6-5
Overview
E- Commerce amp E-Business
Meaning of E-commerce
Buying
Selling
Marketing
amp Servicing
Computer Networks
Electronic Commerce
Internet intranets extranets amp other networks
Enterprise
Uses
Of
Product
Services
Information
Over
What is E-commerce It stands for Electronic commerce
E-Commerce is buying and selling of products or services over the electronic systems such as Internet anytime anywhere with anyone
E-Commerce is the ability to deliver products services information or payments via networks such as Internet
Electronic commerce is a general concept covering any form of commercial transaction or information exchange executed using information amp communication technologies (ICTrsquos)
Scope of E-commerce E-commerce covers the following activities E-tailing Electronic Data Interchange (EDI) Email amp fax Business to consumer selling Business to business buying amp selling Security of Business transactions
E-commerce Vs Traditional Commerce
In E-commerce
Everything is digital
Less overhead costs
Elimination of the middleman
Financial transactions on the internet can actually be more secure in traditional environments
Speed
personalization
E-commerce definition
E-COMMERCE vs TRADITIONAL COMMERCE Key elements E-commerce Traditional commerce Technology Technology enabled carried
through internet EDI amp other technologies
Does not use Modern technology
Pricing Low prices as distribution cost are minimum
Often higher prices due to the cost of intermediaries or middleman
Competitive edge Based on smarter products innovations low prices etc
Based on improved products
Entry Barrier No entry barriers as regards space time capital one can start online operations anytime
They are entry barriers
Customer interface Screen-to-face Face-to-face Communication Technology-mediated channels Personal Accessibility 24 x 7 Limited time Customer interaction
Self-service Seller influenced
Consumer behavior Personalization One-to-one marketing
Standardization Massone-way marketing
Product Commodity Perishables feel amp touch
Modes of e-commerce Mainstream of e-commerce covers the following three areas
E-Business E-Business refers to online transactions including interactions
with business partners customers and vendors E-Business interactions are aimed at improving business processes and efficiency
The term ldquoE-Business therefore refers to the integration within
the company of tools based on information and communication
technologies (generally referred to as business software) to
improve their functioning in order to create value for the
enterprise its clients and its partners
Scope of E-business Production ndashfocused process these include
procurement ordering automated stock replenishment payment processing amp other electronic links with suppliers as well as production control amp processes more directly related to the production processes
Customer Focused processes these include marketing electronic selling processing of customerrsquos orders amp payments amp customer management amp support
Internal or Management ndashfocused processes These include automated employee services training information sharing video ndashconferencing amp recruiting
E-business objectives E-Business is a conduct of business on the internet
In E-business organization have several goals in mind Reach new markets Create new products and services Build customer loyalty Make the best use of existing and emerging technologies Achieve market leadership and competitive advantage
15
Six Key Business Process that can be looked to E-enable
Company
AccountingBilling Inventory Control
Procurement
HR
CRM
Marketing
16
E-business Opportunities Tourism amp travel Sector Banking Sector Healthcare Sector Stock Sector Financial Sector
E-business Functions E-Advertising E-catalogue E-publishing E-Banking E-Procurement E-BiddingE-Auction E-Communication E-Trading
18
Difference between E-business And Traditional Business
Reduction of data error
Reduction of cost
Reduction of paper Work
Reduction of process Cycle time
19
Electronic commerce (e-commerce EC) The process of buying selling transferring or exchanging products services andor information via computer networks including the Internet
E-business A broader definition of EC including buying and selling of goods and services and also servicing customers collaborating e-learning and conducting electronic transactions within an organization
Overview of E-Business and E-Commerce
E-Commerce amp E-Business
E-Commerce is what you dohellipE-Business is what you arehellip
bull Marketingbull Sellingbull Buying of
products and services on the Internet
E-Businessbull Enterprise designed for success
in the Information Agebull Creates new sources of shareholder
valuendash Building customer loyaltyndash Optimizing business processndash Creating new products and servicesndash Managing risk and compliancendash Reaching new marketsndash Enhancing human capitalndash Harnessing technologyndash Achieving market leadership
E-Commerce
Advantages of E-commerceOnline Business
All Time processing Economy Better Customer services Quick Comparison shopping Productivity gains Teamwork Information sharing convenience and control Fast and Time saving Customization
Limitations Cost factor System and data integrity System scalability Reliability Fulfillment and customer relationship problems Products people resist buying online Cultural language and trust issues Lack of customer Awareness High risk of Internet start-up
23
Benefits of E-commerceBenefits to organization
The availability of natural and international markets The decreased cost of processing distributing and retrieving information
Benefit to customerThe access to a vast number of products and services around the clock
Benefit to society The ability to deliver information services and product to people in cities in rural areas and in developing countries
24
Limitations Technological
The lack of universally accepted quality security and reliability standards
Insufficient telecommunication bandwidth
Need for special web servers in addition to network servers
Expensive accessibility
Nontechnological
A perception that EC is insecure
Unresolved legal issue
A lack of a critical mass of sellers and buyers
Opportunities Of E-commerce
bullProperty
transactions
bullsale amp Purchase of
goods
bullInsurance
bullBanking
bullOnline share
trading
bullPayment of taxes
amp services
bullTransportation
bullRenewal of
licenses
bullElectronic
payments
bullImport amp export
bullTravel amp Tourism
bullSecret information
amp coded online are
used by defense
forces
bullDesigning amp
development of
weapons and
information about
nuclear weapon
bullResearch in case
of new model
bullBooking of
tickets for
cinemas amp
concerts online
bullOnline games ndash
chess checkers
amp scrabble
bullMovies TV
bullOnline music
bullOnline education
bullDistant training amp
learning
bullVirtual university amp
tele- conferencing
bullResearch work
online
bullExpert Consultation
via audio amp video
Conf
bullTreatment amp
diagnosis online
bullEncyclopedia
Britannica online
bullCD-Rom refer -
Microsoft Encarta
Dictionaries amp
Thesauri
Copyright copy 2004 Pearson Education Inc Slide 6-26
A Quick Check
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Copyright copy 2004 Pearson Education Inc Slide 6-3
Unit 1
E-Commerce Basics
Learning Objectives Overview of e-Commerce E-business E-business Vs Traditional business Applications of e-Commerce Advantages Disadvantages of E-business Functions of e-Business Business Models Types of E-commerce Convergence ndashMedia convergence Multimedia Content for e-commerce applications Multimedia Storage Servers amp electronic Commerce
applications information delivery transport amp e-commerce applications
Consumer Access devices know about various Applications of ndashEcommerce
E-business framework architecture
Copyright copy 2004 Pearson Education Inc Slide 6-5
Overview
E- Commerce amp E-Business
Meaning of E-commerce
Buying
Selling
Marketing
amp Servicing
Computer Networks
Electronic Commerce
Internet intranets extranets amp other networks
Enterprise
Uses
Of
Product
Services
Information
Over
What is E-commerce It stands for Electronic commerce
E-Commerce is buying and selling of products or services over the electronic systems such as Internet anytime anywhere with anyone
E-Commerce is the ability to deliver products services information or payments via networks such as Internet
Electronic commerce is a general concept covering any form of commercial transaction or information exchange executed using information amp communication technologies (ICTrsquos)
Scope of E-commerce E-commerce covers the following activities E-tailing Electronic Data Interchange (EDI) Email amp fax Business to consumer selling Business to business buying amp selling Security of Business transactions
E-commerce Vs Traditional Commerce
In E-commerce
Everything is digital
Less overhead costs
Elimination of the middleman
Financial transactions on the internet can actually be more secure in traditional environments
Speed
personalization
E-commerce definition
E-COMMERCE vs TRADITIONAL COMMERCE Key elements E-commerce Traditional commerce Technology Technology enabled carried
through internet EDI amp other technologies
Does not use Modern technology
Pricing Low prices as distribution cost are minimum
Often higher prices due to the cost of intermediaries or middleman
Competitive edge Based on smarter products innovations low prices etc
Based on improved products
Entry Barrier No entry barriers as regards space time capital one can start online operations anytime
They are entry barriers
Customer interface Screen-to-face Face-to-face Communication Technology-mediated channels Personal Accessibility 24 x 7 Limited time Customer interaction
Self-service Seller influenced
Consumer behavior Personalization One-to-one marketing
Standardization Massone-way marketing
Product Commodity Perishables feel amp touch
Modes of e-commerce Mainstream of e-commerce covers the following three areas
E-Business E-Business refers to online transactions including interactions
with business partners customers and vendors E-Business interactions are aimed at improving business processes and efficiency
The term ldquoE-Business therefore refers to the integration within
the company of tools based on information and communication
technologies (generally referred to as business software) to
improve their functioning in order to create value for the
enterprise its clients and its partners
Scope of E-business Production ndashfocused process these include
procurement ordering automated stock replenishment payment processing amp other electronic links with suppliers as well as production control amp processes more directly related to the production processes
Customer Focused processes these include marketing electronic selling processing of customerrsquos orders amp payments amp customer management amp support
Internal or Management ndashfocused processes These include automated employee services training information sharing video ndashconferencing amp recruiting
E-business objectives E-Business is a conduct of business on the internet
In E-business organization have several goals in mind Reach new markets Create new products and services Build customer loyalty Make the best use of existing and emerging technologies Achieve market leadership and competitive advantage
15
Six Key Business Process that can be looked to E-enable
Company
AccountingBilling Inventory Control
Procurement
HR
CRM
Marketing
16
E-business Opportunities Tourism amp travel Sector Banking Sector Healthcare Sector Stock Sector Financial Sector
E-business Functions E-Advertising E-catalogue E-publishing E-Banking E-Procurement E-BiddingE-Auction E-Communication E-Trading
18
Difference between E-business And Traditional Business
Reduction of data error
Reduction of cost
Reduction of paper Work
Reduction of process Cycle time
19
Electronic commerce (e-commerce EC) The process of buying selling transferring or exchanging products services andor information via computer networks including the Internet
E-business A broader definition of EC including buying and selling of goods and services and also servicing customers collaborating e-learning and conducting electronic transactions within an organization
Overview of E-Business and E-Commerce
E-Commerce amp E-Business
E-Commerce is what you dohellipE-Business is what you arehellip
bull Marketingbull Sellingbull Buying of
products and services on the Internet
E-Businessbull Enterprise designed for success
in the Information Agebull Creates new sources of shareholder
valuendash Building customer loyaltyndash Optimizing business processndash Creating new products and servicesndash Managing risk and compliancendash Reaching new marketsndash Enhancing human capitalndash Harnessing technologyndash Achieving market leadership
E-Commerce
Advantages of E-commerceOnline Business
All Time processing Economy Better Customer services Quick Comparison shopping Productivity gains Teamwork Information sharing convenience and control Fast and Time saving Customization
Limitations Cost factor System and data integrity System scalability Reliability Fulfillment and customer relationship problems Products people resist buying online Cultural language and trust issues Lack of customer Awareness High risk of Internet start-up
23
Benefits of E-commerceBenefits to organization
The availability of natural and international markets The decreased cost of processing distributing and retrieving information
Benefit to customerThe access to a vast number of products and services around the clock
Benefit to society The ability to deliver information services and product to people in cities in rural areas and in developing countries
24
Limitations Technological
The lack of universally accepted quality security and reliability standards
Insufficient telecommunication bandwidth
Need for special web servers in addition to network servers
Expensive accessibility
Nontechnological
A perception that EC is insecure
Unresolved legal issue
A lack of a critical mass of sellers and buyers
Opportunities Of E-commerce
bullProperty
transactions
bullsale amp Purchase of
goods
bullInsurance
bullBanking
bullOnline share
trading
bullPayment of taxes
amp services
bullTransportation
bullRenewal of
licenses
bullElectronic
payments
bullImport amp export
bullTravel amp Tourism
bullSecret information
amp coded online are
used by defense
forces
bullDesigning amp
development of
weapons and
information about
nuclear weapon
bullResearch in case
of new model
bullBooking of
tickets for
cinemas amp
concerts online
bullOnline games ndash
chess checkers
amp scrabble
bullMovies TV
bullOnline music
bullOnline education
bullDistant training amp
learning
bullVirtual university amp
tele- conferencing
bullResearch work
online
bullExpert Consultation
via audio amp video
Conf
bullTreatment amp
diagnosis online
bullEncyclopedia
Britannica online
bullCD-Rom refer -
Microsoft Encarta
Dictionaries amp
Thesauri
Copyright copy 2004 Pearson Education Inc Slide 6-26
A Quick Check
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Learning Objectives Overview of e-Commerce E-business E-business Vs Traditional business Applications of e-Commerce Advantages Disadvantages of E-business Functions of e-Business Business Models Types of E-commerce Convergence ndashMedia convergence Multimedia Content for e-commerce applications Multimedia Storage Servers amp electronic Commerce
applications information delivery transport amp e-commerce applications
Consumer Access devices know about various Applications of ndashEcommerce
E-business framework architecture
Copyright copy 2004 Pearson Education Inc Slide 6-5
Overview
E- Commerce amp E-Business
Meaning of E-commerce
Buying
Selling
Marketing
amp Servicing
Computer Networks
Electronic Commerce
Internet intranets extranets amp other networks
Enterprise
Uses
Of
Product
Services
Information
Over
What is E-commerce It stands for Electronic commerce
E-Commerce is buying and selling of products or services over the electronic systems such as Internet anytime anywhere with anyone
E-Commerce is the ability to deliver products services information or payments via networks such as Internet
Electronic commerce is a general concept covering any form of commercial transaction or information exchange executed using information amp communication technologies (ICTrsquos)
Scope of E-commerce E-commerce covers the following activities E-tailing Electronic Data Interchange (EDI) Email amp fax Business to consumer selling Business to business buying amp selling Security of Business transactions
E-commerce Vs Traditional Commerce
In E-commerce
Everything is digital
Less overhead costs
Elimination of the middleman
Financial transactions on the internet can actually be more secure in traditional environments
Speed
personalization
E-commerce definition
E-COMMERCE vs TRADITIONAL COMMERCE Key elements E-commerce Traditional commerce Technology Technology enabled carried
through internet EDI amp other technologies
Does not use Modern technology
Pricing Low prices as distribution cost are minimum
Often higher prices due to the cost of intermediaries or middleman
Competitive edge Based on smarter products innovations low prices etc
Based on improved products
Entry Barrier No entry barriers as regards space time capital one can start online operations anytime
They are entry barriers
Customer interface Screen-to-face Face-to-face Communication Technology-mediated channels Personal Accessibility 24 x 7 Limited time Customer interaction
Self-service Seller influenced
Consumer behavior Personalization One-to-one marketing
Standardization Massone-way marketing
Product Commodity Perishables feel amp touch
Modes of e-commerce Mainstream of e-commerce covers the following three areas
E-Business E-Business refers to online transactions including interactions
with business partners customers and vendors E-Business interactions are aimed at improving business processes and efficiency
The term ldquoE-Business therefore refers to the integration within
the company of tools based on information and communication
technologies (generally referred to as business software) to
improve their functioning in order to create value for the
enterprise its clients and its partners
Scope of E-business Production ndashfocused process these include
procurement ordering automated stock replenishment payment processing amp other electronic links with suppliers as well as production control amp processes more directly related to the production processes
Customer Focused processes these include marketing electronic selling processing of customerrsquos orders amp payments amp customer management amp support
Internal or Management ndashfocused processes These include automated employee services training information sharing video ndashconferencing amp recruiting
E-business objectives E-Business is a conduct of business on the internet
In E-business organization have several goals in mind Reach new markets Create new products and services Build customer loyalty Make the best use of existing and emerging technologies Achieve market leadership and competitive advantage
15
Six Key Business Process that can be looked to E-enable
Company
AccountingBilling Inventory Control
Procurement
HR
CRM
Marketing
16
E-business Opportunities Tourism amp travel Sector Banking Sector Healthcare Sector Stock Sector Financial Sector
E-business Functions E-Advertising E-catalogue E-publishing E-Banking E-Procurement E-BiddingE-Auction E-Communication E-Trading
18
Difference between E-business And Traditional Business
Reduction of data error
Reduction of cost
Reduction of paper Work
Reduction of process Cycle time
19
Electronic commerce (e-commerce EC) The process of buying selling transferring or exchanging products services andor information via computer networks including the Internet
E-business A broader definition of EC including buying and selling of goods and services and also servicing customers collaborating e-learning and conducting electronic transactions within an organization
Overview of E-Business and E-Commerce
E-Commerce amp E-Business
E-Commerce is what you dohellipE-Business is what you arehellip
bull Marketingbull Sellingbull Buying of
products and services on the Internet
E-Businessbull Enterprise designed for success
in the Information Agebull Creates new sources of shareholder
valuendash Building customer loyaltyndash Optimizing business processndash Creating new products and servicesndash Managing risk and compliancendash Reaching new marketsndash Enhancing human capitalndash Harnessing technologyndash Achieving market leadership
E-Commerce
Advantages of E-commerceOnline Business
All Time processing Economy Better Customer services Quick Comparison shopping Productivity gains Teamwork Information sharing convenience and control Fast and Time saving Customization
Limitations Cost factor System and data integrity System scalability Reliability Fulfillment and customer relationship problems Products people resist buying online Cultural language and trust issues Lack of customer Awareness High risk of Internet start-up
23
Benefits of E-commerceBenefits to organization
The availability of natural and international markets The decreased cost of processing distributing and retrieving information
Benefit to customerThe access to a vast number of products and services around the clock
Benefit to society The ability to deliver information services and product to people in cities in rural areas and in developing countries
24
Limitations Technological
The lack of universally accepted quality security and reliability standards
Insufficient telecommunication bandwidth
Need for special web servers in addition to network servers
Expensive accessibility
Nontechnological
A perception that EC is insecure
Unresolved legal issue
A lack of a critical mass of sellers and buyers
Opportunities Of E-commerce
bullProperty
transactions
bullsale amp Purchase of
goods
bullInsurance
bullBanking
bullOnline share
trading
bullPayment of taxes
amp services
bullTransportation
bullRenewal of
licenses
bullElectronic
payments
bullImport amp export
bullTravel amp Tourism
bullSecret information
amp coded online are
used by defense
forces
bullDesigning amp
development of
weapons and
information about
nuclear weapon
bullResearch in case
of new model
bullBooking of
tickets for
cinemas amp
concerts online
bullOnline games ndash
chess checkers
amp scrabble
bullMovies TV
bullOnline music
bullOnline education
bullDistant training amp
learning
bullVirtual university amp
tele- conferencing
bullResearch work
online
bullExpert Consultation
via audio amp video
Conf
bullTreatment amp
diagnosis online
bullEncyclopedia
Britannica online
bullCD-Rom refer -
Microsoft Encarta
Dictionaries amp
Thesauri
Copyright copy 2004 Pearson Education Inc Slide 6-26
A Quick Check
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Copyright copy 2004 Pearson Education Inc Slide 6-5
Overview
E- Commerce amp E-Business
Meaning of E-commerce
Buying
Selling
Marketing
amp Servicing
Computer Networks
Electronic Commerce
Internet intranets extranets amp other networks
Enterprise
Uses
Of
Product
Services
Information
Over
What is E-commerce It stands for Electronic commerce
E-Commerce is buying and selling of products or services over the electronic systems such as Internet anytime anywhere with anyone
E-Commerce is the ability to deliver products services information or payments via networks such as Internet
Electronic commerce is a general concept covering any form of commercial transaction or information exchange executed using information amp communication technologies (ICTrsquos)
Scope of E-commerce E-commerce covers the following activities E-tailing Electronic Data Interchange (EDI) Email amp fax Business to consumer selling Business to business buying amp selling Security of Business transactions
E-commerce Vs Traditional Commerce
In E-commerce
Everything is digital
Less overhead costs
Elimination of the middleman
Financial transactions on the internet can actually be more secure in traditional environments
Speed
personalization
E-commerce definition
E-COMMERCE vs TRADITIONAL COMMERCE Key elements E-commerce Traditional commerce Technology Technology enabled carried
through internet EDI amp other technologies
Does not use Modern technology
Pricing Low prices as distribution cost are minimum
Often higher prices due to the cost of intermediaries or middleman
Competitive edge Based on smarter products innovations low prices etc
Based on improved products
Entry Barrier No entry barriers as regards space time capital one can start online operations anytime
They are entry barriers
Customer interface Screen-to-face Face-to-face Communication Technology-mediated channels Personal Accessibility 24 x 7 Limited time Customer interaction
Self-service Seller influenced
Consumer behavior Personalization One-to-one marketing
Standardization Massone-way marketing
Product Commodity Perishables feel amp touch
Modes of e-commerce Mainstream of e-commerce covers the following three areas
E-Business E-Business refers to online transactions including interactions
with business partners customers and vendors E-Business interactions are aimed at improving business processes and efficiency
The term ldquoE-Business therefore refers to the integration within
the company of tools based on information and communication
technologies (generally referred to as business software) to
improve their functioning in order to create value for the
enterprise its clients and its partners
Scope of E-business Production ndashfocused process these include
procurement ordering automated stock replenishment payment processing amp other electronic links with suppliers as well as production control amp processes more directly related to the production processes
Customer Focused processes these include marketing electronic selling processing of customerrsquos orders amp payments amp customer management amp support
Internal or Management ndashfocused processes These include automated employee services training information sharing video ndashconferencing amp recruiting
E-business objectives E-Business is a conduct of business on the internet
In E-business organization have several goals in mind Reach new markets Create new products and services Build customer loyalty Make the best use of existing and emerging technologies Achieve market leadership and competitive advantage
15
Six Key Business Process that can be looked to E-enable
Company
AccountingBilling Inventory Control
Procurement
HR
CRM
Marketing
16
E-business Opportunities Tourism amp travel Sector Banking Sector Healthcare Sector Stock Sector Financial Sector
E-business Functions E-Advertising E-catalogue E-publishing E-Banking E-Procurement E-BiddingE-Auction E-Communication E-Trading
18
Difference between E-business And Traditional Business
Reduction of data error
Reduction of cost
Reduction of paper Work
Reduction of process Cycle time
19
Electronic commerce (e-commerce EC) The process of buying selling transferring or exchanging products services andor information via computer networks including the Internet
E-business A broader definition of EC including buying and selling of goods and services and also servicing customers collaborating e-learning and conducting electronic transactions within an organization
Overview of E-Business and E-Commerce
E-Commerce amp E-Business
E-Commerce is what you dohellipE-Business is what you arehellip
bull Marketingbull Sellingbull Buying of
products and services on the Internet
E-Businessbull Enterprise designed for success
in the Information Agebull Creates new sources of shareholder
valuendash Building customer loyaltyndash Optimizing business processndash Creating new products and servicesndash Managing risk and compliancendash Reaching new marketsndash Enhancing human capitalndash Harnessing technologyndash Achieving market leadership
E-Commerce
Advantages of E-commerceOnline Business
All Time processing Economy Better Customer services Quick Comparison shopping Productivity gains Teamwork Information sharing convenience and control Fast and Time saving Customization
Limitations Cost factor System and data integrity System scalability Reliability Fulfillment and customer relationship problems Products people resist buying online Cultural language and trust issues Lack of customer Awareness High risk of Internet start-up
23
Benefits of E-commerceBenefits to organization
The availability of natural and international markets The decreased cost of processing distributing and retrieving information
Benefit to customerThe access to a vast number of products and services around the clock
Benefit to society The ability to deliver information services and product to people in cities in rural areas and in developing countries
24
Limitations Technological
The lack of universally accepted quality security and reliability standards
Insufficient telecommunication bandwidth
Need for special web servers in addition to network servers
Expensive accessibility
Nontechnological
A perception that EC is insecure
Unresolved legal issue
A lack of a critical mass of sellers and buyers
Opportunities Of E-commerce
bullProperty
transactions
bullsale amp Purchase of
goods
bullInsurance
bullBanking
bullOnline share
trading
bullPayment of taxes
amp services
bullTransportation
bullRenewal of
licenses
bullElectronic
payments
bullImport amp export
bullTravel amp Tourism
bullSecret information
amp coded online are
used by defense
forces
bullDesigning amp
development of
weapons and
information about
nuclear weapon
bullResearch in case
of new model
bullBooking of
tickets for
cinemas amp
concerts online
bullOnline games ndash
chess checkers
amp scrabble
bullMovies TV
bullOnline music
bullOnline education
bullDistant training amp
learning
bullVirtual university amp
tele- conferencing
bullResearch work
online
bullExpert Consultation
via audio amp video
Conf
bullTreatment amp
diagnosis online
bullEncyclopedia
Britannica online
bullCD-Rom refer -
Microsoft Encarta
Dictionaries amp
Thesauri
Copyright copy 2004 Pearson Education Inc Slide 6-26
A Quick Check
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Meaning of E-commerce
Buying
Selling
Marketing
amp Servicing
Computer Networks
Electronic Commerce
Internet intranets extranets amp other networks
Enterprise
Uses
Of
Product
Services
Information
Over
What is E-commerce It stands for Electronic commerce
E-Commerce is buying and selling of products or services over the electronic systems such as Internet anytime anywhere with anyone
E-Commerce is the ability to deliver products services information or payments via networks such as Internet
Electronic commerce is a general concept covering any form of commercial transaction or information exchange executed using information amp communication technologies (ICTrsquos)
Scope of E-commerce E-commerce covers the following activities E-tailing Electronic Data Interchange (EDI) Email amp fax Business to consumer selling Business to business buying amp selling Security of Business transactions
E-commerce Vs Traditional Commerce
In E-commerce
Everything is digital
Less overhead costs
Elimination of the middleman
Financial transactions on the internet can actually be more secure in traditional environments
Speed
personalization
E-commerce definition
E-COMMERCE vs TRADITIONAL COMMERCE Key elements E-commerce Traditional commerce Technology Technology enabled carried
through internet EDI amp other technologies
Does not use Modern technology
Pricing Low prices as distribution cost are minimum
Often higher prices due to the cost of intermediaries or middleman
Competitive edge Based on smarter products innovations low prices etc
Based on improved products
Entry Barrier No entry barriers as regards space time capital one can start online operations anytime
They are entry barriers
Customer interface Screen-to-face Face-to-face Communication Technology-mediated channels Personal Accessibility 24 x 7 Limited time Customer interaction
Self-service Seller influenced
Consumer behavior Personalization One-to-one marketing
Standardization Massone-way marketing
Product Commodity Perishables feel amp touch
Modes of e-commerce Mainstream of e-commerce covers the following three areas
E-Business E-Business refers to online transactions including interactions
with business partners customers and vendors E-Business interactions are aimed at improving business processes and efficiency
The term ldquoE-Business therefore refers to the integration within
the company of tools based on information and communication
technologies (generally referred to as business software) to
improve their functioning in order to create value for the
enterprise its clients and its partners
Scope of E-business Production ndashfocused process these include
procurement ordering automated stock replenishment payment processing amp other electronic links with suppliers as well as production control amp processes more directly related to the production processes
Customer Focused processes these include marketing electronic selling processing of customerrsquos orders amp payments amp customer management amp support
Internal or Management ndashfocused processes These include automated employee services training information sharing video ndashconferencing amp recruiting
E-business objectives E-Business is a conduct of business on the internet
In E-business organization have several goals in mind Reach new markets Create new products and services Build customer loyalty Make the best use of existing and emerging technologies Achieve market leadership and competitive advantage
15
Six Key Business Process that can be looked to E-enable
Company
AccountingBilling Inventory Control
Procurement
HR
CRM
Marketing
16
E-business Opportunities Tourism amp travel Sector Banking Sector Healthcare Sector Stock Sector Financial Sector
E-business Functions E-Advertising E-catalogue E-publishing E-Banking E-Procurement E-BiddingE-Auction E-Communication E-Trading
18
Difference between E-business And Traditional Business
Reduction of data error
Reduction of cost
Reduction of paper Work
Reduction of process Cycle time
19
Electronic commerce (e-commerce EC) The process of buying selling transferring or exchanging products services andor information via computer networks including the Internet
E-business A broader definition of EC including buying and selling of goods and services and also servicing customers collaborating e-learning and conducting electronic transactions within an organization
Overview of E-Business and E-Commerce
E-Commerce amp E-Business
E-Commerce is what you dohellipE-Business is what you arehellip
bull Marketingbull Sellingbull Buying of
products and services on the Internet
E-Businessbull Enterprise designed for success
in the Information Agebull Creates new sources of shareholder
valuendash Building customer loyaltyndash Optimizing business processndash Creating new products and servicesndash Managing risk and compliancendash Reaching new marketsndash Enhancing human capitalndash Harnessing technologyndash Achieving market leadership
E-Commerce
Advantages of E-commerceOnline Business
All Time processing Economy Better Customer services Quick Comparison shopping Productivity gains Teamwork Information sharing convenience and control Fast and Time saving Customization
Limitations Cost factor System and data integrity System scalability Reliability Fulfillment and customer relationship problems Products people resist buying online Cultural language and trust issues Lack of customer Awareness High risk of Internet start-up
23
Benefits of E-commerceBenefits to organization
The availability of natural and international markets The decreased cost of processing distributing and retrieving information
Benefit to customerThe access to a vast number of products and services around the clock
Benefit to society The ability to deliver information services and product to people in cities in rural areas and in developing countries
24
Limitations Technological
The lack of universally accepted quality security and reliability standards
Insufficient telecommunication bandwidth
Need for special web servers in addition to network servers
Expensive accessibility
Nontechnological
A perception that EC is insecure
Unresolved legal issue
A lack of a critical mass of sellers and buyers
Opportunities Of E-commerce
bullProperty
transactions
bullsale amp Purchase of
goods
bullInsurance
bullBanking
bullOnline share
trading
bullPayment of taxes
amp services
bullTransportation
bullRenewal of
licenses
bullElectronic
payments
bullImport amp export
bullTravel amp Tourism
bullSecret information
amp coded online are
used by defense
forces
bullDesigning amp
development of
weapons and
information about
nuclear weapon
bullResearch in case
of new model
bullBooking of
tickets for
cinemas amp
concerts online
bullOnline games ndash
chess checkers
amp scrabble
bullMovies TV
bullOnline music
bullOnline education
bullDistant training amp
learning
bullVirtual university amp
tele- conferencing
bullResearch work
online
bullExpert Consultation
via audio amp video
Conf
bullTreatment amp
diagnosis online
bullEncyclopedia
Britannica online
bullCD-Rom refer -
Microsoft Encarta
Dictionaries amp
Thesauri
Copyright copy 2004 Pearson Education Inc Slide 6-26
A Quick Check
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
What is E-commerce It stands for Electronic commerce
E-Commerce is buying and selling of products or services over the electronic systems such as Internet anytime anywhere with anyone
E-Commerce is the ability to deliver products services information or payments via networks such as Internet
Electronic commerce is a general concept covering any form of commercial transaction or information exchange executed using information amp communication technologies (ICTrsquos)
Scope of E-commerce E-commerce covers the following activities E-tailing Electronic Data Interchange (EDI) Email amp fax Business to consumer selling Business to business buying amp selling Security of Business transactions
E-commerce Vs Traditional Commerce
In E-commerce
Everything is digital
Less overhead costs
Elimination of the middleman
Financial transactions on the internet can actually be more secure in traditional environments
Speed
personalization
E-commerce definition
E-COMMERCE vs TRADITIONAL COMMERCE Key elements E-commerce Traditional commerce Technology Technology enabled carried
through internet EDI amp other technologies
Does not use Modern technology
Pricing Low prices as distribution cost are minimum
Often higher prices due to the cost of intermediaries or middleman
Competitive edge Based on smarter products innovations low prices etc
Based on improved products
Entry Barrier No entry barriers as regards space time capital one can start online operations anytime
They are entry barriers
Customer interface Screen-to-face Face-to-face Communication Technology-mediated channels Personal Accessibility 24 x 7 Limited time Customer interaction
Self-service Seller influenced
Consumer behavior Personalization One-to-one marketing
Standardization Massone-way marketing
Product Commodity Perishables feel amp touch
Modes of e-commerce Mainstream of e-commerce covers the following three areas
E-Business E-Business refers to online transactions including interactions
with business partners customers and vendors E-Business interactions are aimed at improving business processes and efficiency
The term ldquoE-Business therefore refers to the integration within
the company of tools based on information and communication
technologies (generally referred to as business software) to
improve their functioning in order to create value for the
enterprise its clients and its partners
Scope of E-business Production ndashfocused process these include
procurement ordering automated stock replenishment payment processing amp other electronic links with suppliers as well as production control amp processes more directly related to the production processes
Customer Focused processes these include marketing electronic selling processing of customerrsquos orders amp payments amp customer management amp support
Internal or Management ndashfocused processes These include automated employee services training information sharing video ndashconferencing amp recruiting
E-business objectives E-Business is a conduct of business on the internet
In E-business organization have several goals in mind Reach new markets Create new products and services Build customer loyalty Make the best use of existing and emerging technologies Achieve market leadership and competitive advantage
15
Six Key Business Process that can be looked to E-enable
Company
AccountingBilling Inventory Control
Procurement
HR
CRM
Marketing
16
E-business Opportunities Tourism amp travel Sector Banking Sector Healthcare Sector Stock Sector Financial Sector
E-business Functions E-Advertising E-catalogue E-publishing E-Banking E-Procurement E-BiddingE-Auction E-Communication E-Trading
18
Difference between E-business And Traditional Business
Reduction of data error
Reduction of cost
Reduction of paper Work
Reduction of process Cycle time
19
Electronic commerce (e-commerce EC) The process of buying selling transferring or exchanging products services andor information via computer networks including the Internet
E-business A broader definition of EC including buying and selling of goods and services and also servicing customers collaborating e-learning and conducting electronic transactions within an organization
Overview of E-Business and E-Commerce
E-Commerce amp E-Business
E-Commerce is what you dohellipE-Business is what you arehellip
bull Marketingbull Sellingbull Buying of
products and services on the Internet
E-Businessbull Enterprise designed for success
in the Information Agebull Creates new sources of shareholder
valuendash Building customer loyaltyndash Optimizing business processndash Creating new products and servicesndash Managing risk and compliancendash Reaching new marketsndash Enhancing human capitalndash Harnessing technologyndash Achieving market leadership
E-Commerce
Advantages of E-commerceOnline Business
All Time processing Economy Better Customer services Quick Comparison shopping Productivity gains Teamwork Information sharing convenience and control Fast and Time saving Customization
Limitations Cost factor System and data integrity System scalability Reliability Fulfillment and customer relationship problems Products people resist buying online Cultural language and trust issues Lack of customer Awareness High risk of Internet start-up
23
Benefits of E-commerceBenefits to organization
The availability of natural and international markets The decreased cost of processing distributing and retrieving information
Benefit to customerThe access to a vast number of products and services around the clock
Benefit to society The ability to deliver information services and product to people in cities in rural areas and in developing countries
24
Limitations Technological
The lack of universally accepted quality security and reliability standards
Insufficient telecommunication bandwidth
Need for special web servers in addition to network servers
Expensive accessibility
Nontechnological
A perception that EC is insecure
Unresolved legal issue
A lack of a critical mass of sellers and buyers
Opportunities Of E-commerce
bullProperty
transactions
bullsale amp Purchase of
goods
bullInsurance
bullBanking
bullOnline share
trading
bullPayment of taxes
amp services
bullTransportation
bullRenewal of
licenses
bullElectronic
payments
bullImport amp export
bullTravel amp Tourism
bullSecret information
amp coded online are
used by defense
forces
bullDesigning amp
development of
weapons and
information about
nuclear weapon
bullResearch in case
of new model
bullBooking of
tickets for
cinemas amp
concerts online
bullOnline games ndash
chess checkers
amp scrabble
bullMovies TV
bullOnline music
bullOnline education
bullDistant training amp
learning
bullVirtual university amp
tele- conferencing
bullResearch work
online
bullExpert Consultation
via audio amp video
Conf
bullTreatment amp
diagnosis online
bullEncyclopedia
Britannica online
bullCD-Rom refer -
Microsoft Encarta
Dictionaries amp
Thesauri
Copyright copy 2004 Pearson Education Inc Slide 6-26
A Quick Check
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Scope of E-commerce E-commerce covers the following activities E-tailing Electronic Data Interchange (EDI) Email amp fax Business to consumer selling Business to business buying amp selling Security of Business transactions
E-commerce Vs Traditional Commerce
In E-commerce
Everything is digital
Less overhead costs
Elimination of the middleman
Financial transactions on the internet can actually be more secure in traditional environments
Speed
personalization
E-commerce definition
E-COMMERCE vs TRADITIONAL COMMERCE Key elements E-commerce Traditional commerce Technology Technology enabled carried
through internet EDI amp other technologies
Does not use Modern technology
Pricing Low prices as distribution cost are minimum
Often higher prices due to the cost of intermediaries or middleman
Competitive edge Based on smarter products innovations low prices etc
Based on improved products
Entry Barrier No entry barriers as regards space time capital one can start online operations anytime
They are entry barriers
Customer interface Screen-to-face Face-to-face Communication Technology-mediated channels Personal Accessibility 24 x 7 Limited time Customer interaction
Self-service Seller influenced
Consumer behavior Personalization One-to-one marketing
Standardization Massone-way marketing
Product Commodity Perishables feel amp touch
Modes of e-commerce Mainstream of e-commerce covers the following three areas
E-Business E-Business refers to online transactions including interactions
with business partners customers and vendors E-Business interactions are aimed at improving business processes and efficiency
The term ldquoE-Business therefore refers to the integration within
the company of tools based on information and communication
technologies (generally referred to as business software) to
improve their functioning in order to create value for the
enterprise its clients and its partners
Scope of E-business Production ndashfocused process these include
procurement ordering automated stock replenishment payment processing amp other electronic links with suppliers as well as production control amp processes more directly related to the production processes
Customer Focused processes these include marketing electronic selling processing of customerrsquos orders amp payments amp customer management amp support
Internal or Management ndashfocused processes These include automated employee services training information sharing video ndashconferencing amp recruiting
E-business objectives E-Business is a conduct of business on the internet
In E-business organization have several goals in mind Reach new markets Create new products and services Build customer loyalty Make the best use of existing and emerging technologies Achieve market leadership and competitive advantage
15
Six Key Business Process that can be looked to E-enable
Company
AccountingBilling Inventory Control
Procurement
HR
CRM
Marketing
16
E-business Opportunities Tourism amp travel Sector Banking Sector Healthcare Sector Stock Sector Financial Sector
E-business Functions E-Advertising E-catalogue E-publishing E-Banking E-Procurement E-BiddingE-Auction E-Communication E-Trading
18
Difference between E-business And Traditional Business
Reduction of data error
Reduction of cost
Reduction of paper Work
Reduction of process Cycle time
19
Electronic commerce (e-commerce EC) The process of buying selling transferring or exchanging products services andor information via computer networks including the Internet
E-business A broader definition of EC including buying and selling of goods and services and also servicing customers collaborating e-learning and conducting electronic transactions within an organization
Overview of E-Business and E-Commerce
E-Commerce amp E-Business
E-Commerce is what you dohellipE-Business is what you arehellip
bull Marketingbull Sellingbull Buying of
products and services on the Internet
E-Businessbull Enterprise designed for success
in the Information Agebull Creates new sources of shareholder
valuendash Building customer loyaltyndash Optimizing business processndash Creating new products and servicesndash Managing risk and compliancendash Reaching new marketsndash Enhancing human capitalndash Harnessing technologyndash Achieving market leadership
E-Commerce
Advantages of E-commerceOnline Business
All Time processing Economy Better Customer services Quick Comparison shopping Productivity gains Teamwork Information sharing convenience and control Fast and Time saving Customization
Limitations Cost factor System and data integrity System scalability Reliability Fulfillment and customer relationship problems Products people resist buying online Cultural language and trust issues Lack of customer Awareness High risk of Internet start-up
23
Benefits of E-commerceBenefits to organization
The availability of natural and international markets The decreased cost of processing distributing and retrieving information
Benefit to customerThe access to a vast number of products and services around the clock
Benefit to society The ability to deliver information services and product to people in cities in rural areas and in developing countries
24
Limitations Technological
The lack of universally accepted quality security and reliability standards
Insufficient telecommunication bandwidth
Need for special web servers in addition to network servers
Expensive accessibility
Nontechnological
A perception that EC is insecure
Unresolved legal issue
A lack of a critical mass of sellers and buyers
Opportunities Of E-commerce
bullProperty
transactions
bullsale amp Purchase of
goods
bullInsurance
bullBanking
bullOnline share
trading
bullPayment of taxes
amp services
bullTransportation
bullRenewal of
licenses
bullElectronic
payments
bullImport amp export
bullTravel amp Tourism
bullSecret information
amp coded online are
used by defense
forces
bullDesigning amp
development of
weapons and
information about
nuclear weapon
bullResearch in case
of new model
bullBooking of
tickets for
cinemas amp
concerts online
bullOnline games ndash
chess checkers
amp scrabble
bullMovies TV
bullOnline music
bullOnline education
bullDistant training amp
learning
bullVirtual university amp
tele- conferencing
bullResearch work
online
bullExpert Consultation
via audio amp video
Conf
bullTreatment amp
diagnosis online
bullEncyclopedia
Britannica online
bullCD-Rom refer -
Microsoft Encarta
Dictionaries amp
Thesauri
Copyright copy 2004 Pearson Education Inc Slide 6-26
A Quick Check
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
E-commerce Vs Traditional Commerce
In E-commerce
Everything is digital
Less overhead costs
Elimination of the middleman
Financial transactions on the internet can actually be more secure in traditional environments
Speed
personalization
E-commerce definition
E-COMMERCE vs TRADITIONAL COMMERCE Key elements E-commerce Traditional commerce Technology Technology enabled carried
through internet EDI amp other technologies
Does not use Modern technology
Pricing Low prices as distribution cost are minimum
Often higher prices due to the cost of intermediaries or middleman
Competitive edge Based on smarter products innovations low prices etc
Based on improved products
Entry Barrier No entry barriers as regards space time capital one can start online operations anytime
They are entry barriers
Customer interface Screen-to-face Face-to-face Communication Technology-mediated channels Personal Accessibility 24 x 7 Limited time Customer interaction
Self-service Seller influenced
Consumer behavior Personalization One-to-one marketing
Standardization Massone-way marketing
Product Commodity Perishables feel amp touch
Modes of e-commerce Mainstream of e-commerce covers the following three areas
E-Business E-Business refers to online transactions including interactions
with business partners customers and vendors E-Business interactions are aimed at improving business processes and efficiency
The term ldquoE-Business therefore refers to the integration within
the company of tools based on information and communication
technologies (generally referred to as business software) to
improve their functioning in order to create value for the
enterprise its clients and its partners
Scope of E-business Production ndashfocused process these include
procurement ordering automated stock replenishment payment processing amp other electronic links with suppliers as well as production control amp processes more directly related to the production processes
Customer Focused processes these include marketing electronic selling processing of customerrsquos orders amp payments amp customer management amp support
Internal or Management ndashfocused processes These include automated employee services training information sharing video ndashconferencing amp recruiting
E-business objectives E-Business is a conduct of business on the internet
In E-business organization have several goals in mind Reach new markets Create new products and services Build customer loyalty Make the best use of existing and emerging technologies Achieve market leadership and competitive advantage
15
Six Key Business Process that can be looked to E-enable
Company
AccountingBilling Inventory Control
Procurement
HR
CRM
Marketing
16
E-business Opportunities Tourism amp travel Sector Banking Sector Healthcare Sector Stock Sector Financial Sector
E-business Functions E-Advertising E-catalogue E-publishing E-Banking E-Procurement E-BiddingE-Auction E-Communication E-Trading
18
Difference between E-business And Traditional Business
Reduction of data error
Reduction of cost
Reduction of paper Work
Reduction of process Cycle time
19
Electronic commerce (e-commerce EC) The process of buying selling transferring or exchanging products services andor information via computer networks including the Internet
E-business A broader definition of EC including buying and selling of goods and services and also servicing customers collaborating e-learning and conducting electronic transactions within an organization
Overview of E-Business and E-Commerce
E-Commerce amp E-Business
E-Commerce is what you dohellipE-Business is what you arehellip
bull Marketingbull Sellingbull Buying of
products and services on the Internet
E-Businessbull Enterprise designed for success
in the Information Agebull Creates new sources of shareholder
valuendash Building customer loyaltyndash Optimizing business processndash Creating new products and servicesndash Managing risk and compliancendash Reaching new marketsndash Enhancing human capitalndash Harnessing technologyndash Achieving market leadership
E-Commerce
Advantages of E-commerceOnline Business
All Time processing Economy Better Customer services Quick Comparison shopping Productivity gains Teamwork Information sharing convenience and control Fast and Time saving Customization
Limitations Cost factor System and data integrity System scalability Reliability Fulfillment and customer relationship problems Products people resist buying online Cultural language and trust issues Lack of customer Awareness High risk of Internet start-up
23
Benefits of E-commerceBenefits to organization
The availability of natural and international markets The decreased cost of processing distributing and retrieving information
Benefit to customerThe access to a vast number of products and services around the clock
Benefit to society The ability to deliver information services and product to people in cities in rural areas and in developing countries
24
Limitations Technological
The lack of universally accepted quality security and reliability standards
Insufficient telecommunication bandwidth
Need for special web servers in addition to network servers
Expensive accessibility
Nontechnological
A perception that EC is insecure
Unresolved legal issue
A lack of a critical mass of sellers and buyers
Opportunities Of E-commerce
bullProperty
transactions
bullsale amp Purchase of
goods
bullInsurance
bullBanking
bullOnline share
trading
bullPayment of taxes
amp services
bullTransportation
bullRenewal of
licenses
bullElectronic
payments
bullImport amp export
bullTravel amp Tourism
bullSecret information
amp coded online are
used by defense
forces
bullDesigning amp
development of
weapons and
information about
nuclear weapon
bullResearch in case
of new model
bullBooking of
tickets for
cinemas amp
concerts online
bullOnline games ndash
chess checkers
amp scrabble
bullMovies TV
bullOnline music
bullOnline education
bullDistant training amp
learning
bullVirtual university amp
tele- conferencing
bullResearch work
online
bullExpert Consultation
via audio amp video
Conf
bullTreatment amp
diagnosis online
bullEncyclopedia
Britannica online
bullCD-Rom refer -
Microsoft Encarta
Dictionaries amp
Thesauri
Copyright copy 2004 Pearson Education Inc Slide 6-26
A Quick Check
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
E-commerce definition
E-COMMERCE vs TRADITIONAL COMMERCE Key elements E-commerce Traditional commerce Technology Technology enabled carried
through internet EDI amp other technologies
Does not use Modern technology
Pricing Low prices as distribution cost are minimum
Often higher prices due to the cost of intermediaries or middleman
Competitive edge Based on smarter products innovations low prices etc
Based on improved products
Entry Barrier No entry barriers as regards space time capital one can start online operations anytime
They are entry barriers
Customer interface Screen-to-face Face-to-face Communication Technology-mediated channels Personal Accessibility 24 x 7 Limited time Customer interaction
Self-service Seller influenced
Consumer behavior Personalization One-to-one marketing
Standardization Massone-way marketing
Product Commodity Perishables feel amp touch
Modes of e-commerce Mainstream of e-commerce covers the following three areas
E-Business E-Business refers to online transactions including interactions
with business partners customers and vendors E-Business interactions are aimed at improving business processes and efficiency
The term ldquoE-Business therefore refers to the integration within
the company of tools based on information and communication
technologies (generally referred to as business software) to
improve their functioning in order to create value for the
enterprise its clients and its partners
Scope of E-business Production ndashfocused process these include
procurement ordering automated stock replenishment payment processing amp other electronic links with suppliers as well as production control amp processes more directly related to the production processes
Customer Focused processes these include marketing electronic selling processing of customerrsquos orders amp payments amp customer management amp support
Internal or Management ndashfocused processes These include automated employee services training information sharing video ndashconferencing amp recruiting
E-business objectives E-Business is a conduct of business on the internet
In E-business organization have several goals in mind Reach new markets Create new products and services Build customer loyalty Make the best use of existing and emerging technologies Achieve market leadership and competitive advantage
15
Six Key Business Process that can be looked to E-enable
Company
AccountingBilling Inventory Control
Procurement
HR
CRM
Marketing
16
E-business Opportunities Tourism amp travel Sector Banking Sector Healthcare Sector Stock Sector Financial Sector
E-business Functions E-Advertising E-catalogue E-publishing E-Banking E-Procurement E-BiddingE-Auction E-Communication E-Trading
18
Difference between E-business And Traditional Business
Reduction of data error
Reduction of cost
Reduction of paper Work
Reduction of process Cycle time
19
Electronic commerce (e-commerce EC) The process of buying selling transferring or exchanging products services andor information via computer networks including the Internet
E-business A broader definition of EC including buying and selling of goods and services and also servicing customers collaborating e-learning and conducting electronic transactions within an organization
Overview of E-Business and E-Commerce
E-Commerce amp E-Business
E-Commerce is what you dohellipE-Business is what you arehellip
bull Marketingbull Sellingbull Buying of
products and services on the Internet
E-Businessbull Enterprise designed for success
in the Information Agebull Creates new sources of shareholder
valuendash Building customer loyaltyndash Optimizing business processndash Creating new products and servicesndash Managing risk and compliancendash Reaching new marketsndash Enhancing human capitalndash Harnessing technologyndash Achieving market leadership
E-Commerce
Advantages of E-commerceOnline Business
All Time processing Economy Better Customer services Quick Comparison shopping Productivity gains Teamwork Information sharing convenience and control Fast and Time saving Customization
Limitations Cost factor System and data integrity System scalability Reliability Fulfillment and customer relationship problems Products people resist buying online Cultural language and trust issues Lack of customer Awareness High risk of Internet start-up
23
Benefits of E-commerceBenefits to organization
The availability of natural and international markets The decreased cost of processing distributing and retrieving information
Benefit to customerThe access to a vast number of products and services around the clock
Benefit to society The ability to deliver information services and product to people in cities in rural areas and in developing countries
24
Limitations Technological
The lack of universally accepted quality security and reliability standards
Insufficient telecommunication bandwidth
Need for special web servers in addition to network servers
Expensive accessibility
Nontechnological
A perception that EC is insecure
Unresolved legal issue
A lack of a critical mass of sellers and buyers
Opportunities Of E-commerce
bullProperty
transactions
bullsale amp Purchase of
goods
bullInsurance
bullBanking
bullOnline share
trading
bullPayment of taxes
amp services
bullTransportation
bullRenewal of
licenses
bullElectronic
payments
bullImport amp export
bullTravel amp Tourism
bullSecret information
amp coded online are
used by defense
forces
bullDesigning amp
development of
weapons and
information about
nuclear weapon
bullResearch in case
of new model
bullBooking of
tickets for
cinemas amp
concerts online
bullOnline games ndash
chess checkers
amp scrabble
bullMovies TV
bullOnline music
bullOnline education
bullDistant training amp
learning
bullVirtual university amp
tele- conferencing
bullResearch work
online
bullExpert Consultation
via audio amp video
Conf
bullTreatment amp
diagnosis online
bullEncyclopedia
Britannica online
bullCD-Rom refer -
Microsoft Encarta
Dictionaries amp
Thesauri
Copyright copy 2004 Pearson Education Inc Slide 6-26
A Quick Check
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Modes of e-commerce Mainstream of e-commerce covers the following three areas
E-Business E-Business refers to online transactions including interactions
with business partners customers and vendors E-Business interactions are aimed at improving business processes and efficiency
The term ldquoE-Business therefore refers to the integration within
the company of tools based on information and communication
technologies (generally referred to as business software) to
improve their functioning in order to create value for the
enterprise its clients and its partners
Scope of E-business Production ndashfocused process these include
procurement ordering automated stock replenishment payment processing amp other electronic links with suppliers as well as production control amp processes more directly related to the production processes
Customer Focused processes these include marketing electronic selling processing of customerrsquos orders amp payments amp customer management amp support
Internal or Management ndashfocused processes These include automated employee services training information sharing video ndashconferencing amp recruiting
E-business objectives E-Business is a conduct of business on the internet
In E-business organization have several goals in mind Reach new markets Create new products and services Build customer loyalty Make the best use of existing and emerging technologies Achieve market leadership and competitive advantage
15
Six Key Business Process that can be looked to E-enable
Company
AccountingBilling Inventory Control
Procurement
HR
CRM
Marketing
16
E-business Opportunities Tourism amp travel Sector Banking Sector Healthcare Sector Stock Sector Financial Sector
E-business Functions E-Advertising E-catalogue E-publishing E-Banking E-Procurement E-BiddingE-Auction E-Communication E-Trading
18
Difference between E-business And Traditional Business
Reduction of data error
Reduction of cost
Reduction of paper Work
Reduction of process Cycle time
19
Electronic commerce (e-commerce EC) The process of buying selling transferring or exchanging products services andor information via computer networks including the Internet
E-business A broader definition of EC including buying and selling of goods and services and also servicing customers collaborating e-learning and conducting electronic transactions within an organization
Overview of E-Business and E-Commerce
E-Commerce amp E-Business
E-Commerce is what you dohellipE-Business is what you arehellip
bull Marketingbull Sellingbull Buying of
products and services on the Internet
E-Businessbull Enterprise designed for success
in the Information Agebull Creates new sources of shareholder
valuendash Building customer loyaltyndash Optimizing business processndash Creating new products and servicesndash Managing risk and compliancendash Reaching new marketsndash Enhancing human capitalndash Harnessing technologyndash Achieving market leadership
E-Commerce
Advantages of E-commerceOnline Business
All Time processing Economy Better Customer services Quick Comparison shopping Productivity gains Teamwork Information sharing convenience and control Fast and Time saving Customization
Limitations Cost factor System and data integrity System scalability Reliability Fulfillment and customer relationship problems Products people resist buying online Cultural language and trust issues Lack of customer Awareness High risk of Internet start-up
23
Benefits of E-commerceBenefits to organization
The availability of natural and international markets The decreased cost of processing distributing and retrieving information
Benefit to customerThe access to a vast number of products and services around the clock
Benefit to society The ability to deliver information services and product to people in cities in rural areas and in developing countries
24
Limitations Technological
The lack of universally accepted quality security and reliability standards
Insufficient telecommunication bandwidth
Need for special web servers in addition to network servers
Expensive accessibility
Nontechnological
A perception that EC is insecure
Unresolved legal issue
A lack of a critical mass of sellers and buyers
Opportunities Of E-commerce
bullProperty
transactions
bullsale amp Purchase of
goods
bullInsurance
bullBanking
bullOnline share
trading
bullPayment of taxes
amp services
bullTransportation
bullRenewal of
licenses
bullElectronic
payments
bullImport amp export
bullTravel amp Tourism
bullSecret information
amp coded online are
used by defense
forces
bullDesigning amp
development of
weapons and
information about
nuclear weapon
bullResearch in case
of new model
bullBooking of
tickets for
cinemas amp
concerts online
bullOnline games ndash
chess checkers
amp scrabble
bullMovies TV
bullOnline music
bullOnline education
bullDistant training amp
learning
bullVirtual university amp
tele- conferencing
bullResearch work
online
bullExpert Consultation
via audio amp video
Conf
bullTreatment amp
diagnosis online
bullEncyclopedia
Britannica online
bullCD-Rom refer -
Microsoft Encarta
Dictionaries amp
Thesauri
Copyright copy 2004 Pearson Education Inc Slide 6-26
A Quick Check
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
E-Business E-Business refers to online transactions including interactions
with business partners customers and vendors E-Business interactions are aimed at improving business processes and efficiency
The term ldquoE-Business therefore refers to the integration within
the company of tools based on information and communication
technologies (generally referred to as business software) to
improve their functioning in order to create value for the
enterprise its clients and its partners
Scope of E-business Production ndashfocused process these include
procurement ordering automated stock replenishment payment processing amp other electronic links with suppliers as well as production control amp processes more directly related to the production processes
Customer Focused processes these include marketing electronic selling processing of customerrsquos orders amp payments amp customer management amp support
Internal or Management ndashfocused processes These include automated employee services training information sharing video ndashconferencing amp recruiting
E-business objectives E-Business is a conduct of business on the internet
In E-business organization have several goals in mind Reach new markets Create new products and services Build customer loyalty Make the best use of existing and emerging technologies Achieve market leadership and competitive advantage
15
Six Key Business Process that can be looked to E-enable
Company
AccountingBilling Inventory Control
Procurement
HR
CRM
Marketing
16
E-business Opportunities Tourism amp travel Sector Banking Sector Healthcare Sector Stock Sector Financial Sector
E-business Functions E-Advertising E-catalogue E-publishing E-Banking E-Procurement E-BiddingE-Auction E-Communication E-Trading
18
Difference between E-business And Traditional Business
Reduction of data error
Reduction of cost
Reduction of paper Work
Reduction of process Cycle time
19
Electronic commerce (e-commerce EC) The process of buying selling transferring or exchanging products services andor information via computer networks including the Internet
E-business A broader definition of EC including buying and selling of goods and services and also servicing customers collaborating e-learning and conducting electronic transactions within an organization
Overview of E-Business and E-Commerce
E-Commerce amp E-Business
E-Commerce is what you dohellipE-Business is what you arehellip
bull Marketingbull Sellingbull Buying of
products and services on the Internet
E-Businessbull Enterprise designed for success
in the Information Agebull Creates new sources of shareholder
valuendash Building customer loyaltyndash Optimizing business processndash Creating new products and servicesndash Managing risk and compliancendash Reaching new marketsndash Enhancing human capitalndash Harnessing technologyndash Achieving market leadership
E-Commerce
Advantages of E-commerceOnline Business
All Time processing Economy Better Customer services Quick Comparison shopping Productivity gains Teamwork Information sharing convenience and control Fast and Time saving Customization
Limitations Cost factor System and data integrity System scalability Reliability Fulfillment and customer relationship problems Products people resist buying online Cultural language and trust issues Lack of customer Awareness High risk of Internet start-up
23
Benefits of E-commerceBenefits to organization
The availability of natural and international markets The decreased cost of processing distributing and retrieving information
Benefit to customerThe access to a vast number of products and services around the clock
Benefit to society The ability to deliver information services and product to people in cities in rural areas and in developing countries
24
Limitations Technological
The lack of universally accepted quality security and reliability standards
Insufficient telecommunication bandwidth
Need for special web servers in addition to network servers
Expensive accessibility
Nontechnological
A perception that EC is insecure
Unresolved legal issue
A lack of a critical mass of sellers and buyers
Opportunities Of E-commerce
bullProperty
transactions
bullsale amp Purchase of
goods
bullInsurance
bullBanking
bullOnline share
trading
bullPayment of taxes
amp services
bullTransportation
bullRenewal of
licenses
bullElectronic
payments
bullImport amp export
bullTravel amp Tourism
bullSecret information
amp coded online are
used by defense
forces
bullDesigning amp
development of
weapons and
information about
nuclear weapon
bullResearch in case
of new model
bullBooking of
tickets for
cinemas amp
concerts online
bullOnline games ndash
chess checkers
amp scrabble
bullMovies TV
bullOnline music
bullOnline education
bullDistant training amp
learning
bullVirtual university amp
tele- conferencing
bullResearch work
online
bullExpert Consultation
via audio amp video
Conf
bullTreatment amp
diagnosis online
bullEncyclopedia
Britannica online
bullCD-Rom refer -
Microsoft Encarta
Dictionaries amp
Thesauri
Copyright copy 2004 Pearson Education Inc Slide 6-26
A Quick Check
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Scope of E-business Production ndashfocused process these include
procurement ordering automated stock replenishment payment processing amp other electronic links with suppliers as well as production control amp processes more directly related to the production processes
Customer Focused processes these include marketing electronic selling processing of customerrsquos orders amp payments amp customer management amp support
Internal or Management ndashfocused processes These include automated employee services training information sharing video ndashconferencing amp recruiting
E-business objectives E-Business is a conduct of business on the internet
In E-business organization have several goals in mind Reach new markets Create new products and services Build customer loyalty Make the best use of existing and emerging technologies Achieve market leadership and competitive advantage
15
Six Key Business Process that can be looked to E-enable
Company
AccountingBilling Inventory Control
Procurement
HR
CRM
Marketing
16
E-business Opportunities Tourism amp travel Sector Banking Sector Healthcare Sector Stock Sector Financial Sector
E-business Functions E-Advertising E-catalogue E-publishing E-Banking E-Procurement E-BiddingE-Auction E-Communication E-Trading
18
Difference between E-business And Traditional Business
Reduction of data error
Reduction of cost
Reduction of paper Work
Reduction of process Cycle time
19
Electronic commerce (e-commerce EC) The process of buying selling transferring or exchanging products services andor information via computer networks including the Internet
E-business A broader definition of EC including buying and selling of goods and services and also servicing customers collaborating e-learning and conducting electronic transactions within an organization
Overview of E-Business and E-Commerce
E-Commerce amp E-Business
E-Commerce is what you dohellipE-Business is what you arehellip
bull Marketingbull Sellingbull Buying of
products and services on the Internet
E-Businessbull Enterprise designed for success
in the Information Agebull Creates new sources of shareholder
valuendash Building customer loyaltyndash Optimizing business processndash Creating new products and servicesndash Managing risk and compliancendash Reaching new marketsndash Enhancing human capitalndash Harnessing technologyndash Achieving market leadership
E-Commerce
Advantages of E-commerceOnline Business
All Time processing Economy Better Customer services Quick Comparison shopping Productivity gains Teamwork Information sharing convenience and control Fast and Time saving Customization
Limitations Cost factor System and data integrity System scalability Reliability Fulfillment and customer relationship problems Products people resist buying online Cultural language and trust issues Lack of customer Awareness High risk of Internet start-up
23
Benefits of E-commerceBenefits to organization
The availability of natural and international markets The decreased cost of processing distributing and retrieving information
Benefit to customerThe access to a vast number of products and services around the clock
Benefit to society The ability to deliver information services and product to people in cities in rural areas and in developing countries
24
Limitations Technological
The lack of universally accepted quality security and reliability standards
Insufficient telecommunication bandwidth
Need for special web servers in addition to network servers
Expensive accessibility
Nontechnological
A perception that EC is insecure
Unresolved legal issue
A lack of a critical mass of sellers and buyers
Opportunities Of E-commerce
bullProperty
transactions
bullsale amp Purchase of
goods
bullInsurance
bullBanking
bullOnline share
trading
bullPayment of taxes
amp services
bullTransportation
bullRenewal of
licenses
bullElectronic
payments
bullImport amp export
bullTravel amp Tourism
bullSecret information
amp coded online are
used by defense
forces
bullDesigning amp
development of
weapons and
information about
nuclear weapon
bullResearch in case
of new model
bullBooking of
tickets for
cinemas amp
concerts online
bullOnline games ndash
chess checkers
amp scrabble
bullMovies TV
bullOnline music
bullOnline education
bullDistant training amp
learning
bullVirtual university amp
tele- conferencing
bullResearch work
online
bullExpert Consultation
via audio amp video
Conf
bullTreatment amp
diagnosis online
bullEncyclopedia
Britannica online
bullCD-Rom refer -
Microsoft Encarta
Dictionaries amp
Thesauri
Copyright copy 2004 Pearson Education Inc Slide 6-26
A Quick Check
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
E-business objectives E-Business is a conduct of business on the internet
In E-business organization have several goals in mind Reach new markets Create new products and services Build customer loyalty Make the best use of existing and emerging technologies Achieve market leadership and competitive advantage
15
Six Key Business Process that can be looked to E-enable
Company
AccountingBilling Inventory Control
Procurement
HR
CRM
Marketing
16
E-business Opportunities Tourism amp travel Sector Banking Sector Healthcare Sector Stock Sector Financial Sector
E-business Functions E-Advertising E-catalogue E-publishing E-Banking E-Procurement E-BiddingE-Auction E-Communication E-Trading
18
Difference between E-business And Traditional Business
Reduction of data error
Reduction of cost
Reduction of paper Work
Reduction of process Cycle time
19
Electronic commerce (e-commerce EC) The process of buying selling transferring or exchanging products services andor information via computer networks including the Internet
E-business A broader definition of EC including buying and selling of goods and services and also servicing customers collaborating e-learning and conducting electronic transactions within an organization
Overview of E-Business and E-Commerce
E-Commerce amp E-Business
E-Commerce is what you dohellipE-Business is what you arehellip
bull Marketingbull Sellingbull Buying of
products and services on the Internet
E-Businessbull Enterprise designed for success
in the Information Agebull Creates new sources of shareholder
valuendash Building customer loyaltyndash Optimizing business processndash Creating new products and servicesndash Managing risk and compliancendash Reaching new marketsndash Enhancing human capitalndash Harnessing technologyndash Achieving market leadership
E-Commerce
Advantages of E-commerceOnline Business
All Time processing Economy Better Customer services Quick Comparison shopping Productivity gains Teamwork Information sharing convenience and control Fast and Time saving Customization
Limitations Cost factor System and data integrity System scalability Reliability Fulfillment and customer relationship problems Products people resist buying online Cultural language and trust issues Lack of customer Awareness High risk of Internet start-up
23
Benefits of E-commerceBenefits to organization
The availability of natural and international markets The decreased cost of processing distributing and retrieving information
Benefit to customerThe access to a vast number of products and services around the clock
Benefit to society The ability to deliver information services and product to people in cities in rural areas and in developing countries
24
Limitations Technological
The lack of universally accepted quality security and reliability standards
Insufficient telecommunication bandwidth
Need for special web servers in addition to network servers
Expensive accessibility
Nontechnological
A perception that EC is insecure
Unresolved legal issue
A lack of a critical mass of sellers and buyers
Opportunities Of E-commerce
bullProperty
transactions
bullsale amp Purchase of
goods
bullInsurance
bullBanking
bullOnline share
trading
bullPayment of taxes
amp services
bullTransportation
bullRenewal of
licenses
bullElectronic
payments
bullImport amp export
bullTravel amp Tourism
bullSecret information
amp coded online are
used by defense
forces
bullDesigning amp
development of
weapons and
information about
nuclear weapon
bullResearch in case
of new model
bullBooking of
tickets for
cinemas amp
concerts online
bullOnline games ndash
chess checkers
amp scrabble
bullMovies TV
bullOnline music
bullOnline education
bullDistant training amp
learning
bullVirtual university amp
tele- conferencing
bullResearch work
online
bullExpert Consultation
via audio amp video
Conf
bullTreatment amp
diagnosis online
bullEncyclopedia
Britannica online
bullCD-Rom refer -
Microsoft Encarta
Dictionaries amp
Thesauri
Copyright copy 2004 Pearson Education Inc Slide 6-26
A Quick Check
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
15
Six Key Business Process that can be looked to E-enable
Company
AccountingBilling Inventory Control
Procurement
HR
CRM
Marketing
16
E-business Opportunities Tourism amp travel Sector Banking Sector Healthcare Sector Stock Sector Financial Sector
E-business Functions E-Advertising E-catalogue E-publishing E-Banking E-Procurement E-BiddingE-Auction E-Communication E-Trading
18
Difference between E-business And Traditional Business
Reduction of data error
Reduction of cost
Reduction of paper Work
Reduction of process Cycle time
19
Electronic commerce (e-commerce EC) The process of buying selling transferring or exchanging products services andor information via computer networks including the Internet
E-business A broader definition of EC including buying and selling of goods and services and also servicing customers collaborating e-learning and conducting electronic transactions within an organization
Overview of E-Business and E-Commerce
E-Commerce amp E-Business
E-Commerce is what you dohellipE-Business is what you arehellip
bull Marketingbull Sellingbull Buying of
products and services on the Internet
E-Businessbull Enterprise designed for success
in the Information Agebull Creates new sources of shareholder
valuendash Building customer loyaltyndash Optimizing business processndash Creating new products and servicesndash Managing risk and compliancendash Reaching new marketsndash Enhancing human capitalndash Harnessing technologyndash Achieving market leadership
E-Commerce
Advantages of E-commerceOnline Business
All Time processing Economy Better Customer services Quick Comparison shopping Productivity gains Teamwork Information sharing convenience and control Fast and Time saving Customization
Limitations Cost factor System and data integrity System scalability Reliability Fulfillment and customer relationship problems Products people resist buying online Cultural language and trust issues Lack of customer Awareness High risk of Internet start-up
23
Benefits of E-commerceBenefits to organization
The availability of natural and international markets The decreased cost of processing distributing and retrieving information
Benefit to customerThe access to a vast number of products and services around the clock
Benefit to society The ability to deliver information services and product to people in cities in rural areas and in developing countries
24
Limitations Technological
The lack of universally accepted quality security and reliability standards
Insufficient telecommunication bandwidth
Need for special web servers in addition to network servers
Expensive accessibility
Nontechnological
A perception that EC is insecure
Unresolved legal issue
A lack of a critical mass of sellers and buyers
Opportunities Of E-commerce
bullProperty
transactions
bullsale amp Purchase of
goods
bullInsurance
bullBanking
bullOnline share
trading
bullPayment of taxes
amp services
bullTransportation
bullRenewal of
licenses
bullElectronic
payments
bullImport amp export
bullTravel amp Tourism
bullSecret information
amp coded online are
used by defense
forces
bullDesigning amp
development of
weapons and
information about
nuclear weapon
bullResearch in case
of new model
bullBooking of
tickets for
cinemas amp
concerts online
bullOnline games ndash
chess checkers
amp scrabble
bullMovies TV
bullOnline music
bullOnline education
bullDistant training amp
learning
bullVirtual university amp
tele- conferencing
bullResearch work
online
bullExpert Consultation
via audio amp video
Conf
bullTreatment amp
diagnosis online
bullEncyclopedia
Britannica online
bullCD-Rom refer -
Microsoft Encarta
Dictionaries amp
Thesauri
Copyright copy 2004 Pearson Education Inc Slide 6-26
A Quick Check
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
16
E-business Opportunities Tourism amp travel Sector Banking Sector Healthcare Sector Stock Sector Financial Sector
E-business Functions E-Advertising E-catalogue E-publishing E-Banking E-Procurement E-BiddingE-Auction E-Communication E-Trading
18
Difference between E-business And Traditional Business
Reduction of data error
Reduction of cost
Reduction of paper Work
Reduction of process Cycle time
19
Electronic commerce (e-commerce EC) The process of buying selling transferring or exchanging products services andor information via computer networks including the Internet
E-business A broader definition of EC including buying and selling of goods and services and also servicing customers collaborating e-learning and conducting electronic transactions within an organization
Overview of E-Business and E-Commerce
E-Commerce amp E-Business
E-Commerce is what you dohellipE-Business is what you arehellip
bull Marketingbull Sellingbull Buying of
products and services on the Internet
E-Businessbull Enterprise designed for success
in the Information Agebull Creates new sources of shareholder
valuendash Building customer loyaltyndash Optimizing business processndash Creating new products and servicesndash Managing risk and compliancendash Reaching new marketsndash Enhancing human capitalndash Harnessing technologyndash Achieving market leadership
E-Commerce
Advantages of E-commerceOnline Business
All Time processing Economy Better Customer services Quick Comparison shopping Productivity gains Teamwork Information sharing convenience and control Fast and Time saving Customization
Limitations Cost factor System and data integrity System scalability Reliability Fulfillment and customer relationship problems Products people resist buying online Cultural language and trust issues Lack of customer Awareness High risk of Internet start-up
23
Benefits of E-commerceBenefits to organization
The availability of natural and international markets The decreased cost of processing distributing and retrieving information
Benefit to customerThe access to a vast number of products and services around the clock
Benefit to society The ability to deliver information services and product to people in cities in rural areas and in developing countries
24
Limitations Technological
The lack of universally accepted quality security and reliability standards
Insufficient telecommunication bandwidth
Need for special web servers in addition to network servers
Expensive accessibility
Nontechnological
A perception that EC is insecure
Unresolved legal issue
A lack of a critical mass of sellers and buyers
Opportunities Of E-commerce
bullProperty
transactions
bullsale amp Purchase of
goods
bullInsurance
bullBanking
bullOnline share
trading
bullPayment of taxes
amp services
bullTransportation
bullRenewal of
licenses
bullElectronic
payments
bullImport amp export
bullTravel amp Tourism
bullSecret information
amp coded online are
used by defense
forces
bullDesigning amp
development of
weapons and
information about
nuclear weapon
bullResearch in case
of new model
bullBooking of
tickets for
cinemas amp
concerts online
bullOnline games ndash
chess checkers
amp scrabble
bullMovies TV
bullOnline music
bullOnline education
bullDistant training amp
learning
bullVirtual university amp
tele- conferencing
bullResearch work
online
bullExpert Consultation
via audio amp video
Conf
bullTreatment amp
diagnosis online
bullEncyclopedia
Britannica online
bullCD-Rom refer -
Microsoft Encarta
Dictionaries amp
Thesauri
Copyright copy 2004 Pearson Education Inc Slide 6-26
A Quick Check
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
E-business Functions E-Advertising E-catalogue E-publishing E-Banking E-Procurement E-BiddingE-Auction E-Communication E-Trading
18
Difference between E-business And Traditional Business
Reduction of data error
Reduction of cost
Reduction of paper Work
Reduction of process Cycle time
19
Electronic commerce (e-commerce EC) The process of buying selling transferring or exchanging products services andor information via computer networks including the Internet
E-business A broader definition of EC including buying and selling of goods and services and also servicing customers collaborating e-learning and conducting electronic transactions within an organization
Overview of E-Business and E-Commerce
E-Commerce amp E-Business
E-Commerce is what you dohellipE-Business is what you arehellip
bull Marketingbull Sellingbull Buying of
products and services on the Internet
E-Businessbull Enterprise designed for success
in the Information Agebull Creates new sources of shareholder
valuendash Building customer loyaltyndash Optimizing business processndash Creating new products and servicesndash Managing risk and compliancendash Reaching new marketsndash Enhancing human capitalndash Harnessing technologyndash Achieving market leadership
E-Commerce
Advantages of E-commerceOnline Business
All Time processing Economy Better Customer services Quick Comparison shopping Productivity gains Teamwork Information sharing convenience and control Fast and Time saving Customization
Limitations Cost factor System and data integrity System scalability Reliability Fulfillment and customer relationship problems Products people resist buying online Cultural language and trust issues Lack of customer Awareness High risk of Internet start-up
23
Benefits of E-commerceBenefits to organization
The availability of natural and international markets The decreased cost of processing distributing and retrieving information
Benefit to customerThe access to a vast number of products and services around the clock
Benefit to society The ability to deliver information services and product to people in cities in rural areas and in developing countries
24
Limitations Technological
The lack of universally accepted quality security and reliability standards
Insufficient telecommunication bandwidth
Need for special web servers in addition to network servers
Expensive accessibility
Nontechnological
A perception that EC is insecure
Unresolved legal issue
A lack of a critical mass of sellers and buyers
Opportunities Of E-commerce
bullProperty
transactions
bullsale amp Purchase of
goods
bullInsurance
bullBanking
bullOnline share
trading
bullPayment of taxes
amp services
bullTransportation
bullRenewal of
licenses
bullElectronic
payments
bullImport amp export
bullTravel amp Tourism
bullSecret information
amp coded online are
used by defense
forces
bullDesigning amp
development of
weapons and
information about
nuclear weapon
bullResearch in case
of new model
bullBooking of
tickets for
cinemas amp
concerts online
bullOnline games ndash
chess checkers
amp scrabble
bullMovies TV
bullOnline music
bullOnline education
bullDistant training amp
learning
bullVirtual university amp
tele- conferencing
bullResearch work
online
bullExpert Consultation
via audio amp video
Conf
bullTreatment amp
diagnosis online
bullEncyclopedia
Britannica online
bullCD-Rom refer -
Microsoft Encarta
Dictionaries amp
Thesauri
Copyright copy 2004 Pearson Education Inc Slide 6-26
A Quick Check
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
18
Difference between E-business And Traditional Business
Reduction of data error
Reduction of cost
Reduction of paper Work
Reduction of process Cycle time
19
Electronic commerce (e-commerce EC) The process of buying selling transferring or exchanging products services andor information via computer networks including the Internet
E-business A broader definition of EC including buying and selling of goods and services and also servicing customers collaborating e-learning and conducting electronic transactions within an organization
Overview of E-Business and E-Commerce
E-Commerce amp E-Business
E-Commerce is what you dohellipE-Business is what you arehellip
bull Marketingbull Sellingbull Buying of
products and services on the Internet
E-Businessbull Enterprise designed for success
in the Information Agebull Creates new sources of shareholder
valuendash Building customer loyaltyndash Optimizing business processndash Creating new products and servicesndash Managing risk and compliancendash Reaching new marketsndash Enhancing human capitalndash Harnessing technologyndash Achieving market leadership
E-Commerce
Advantages of E-commerceOnline Business
All Time processing Economy Better Customer services Quick Comparison shopping Productivity gains Teamwork Information sharing convenience and control Fast and Time saving Customization
Limitations Cost factor System and data integrity System scalability Reliability Fulfillment and customer relationship problems Products people resist buying online Cultural language and trust issues Lack of customer Awareness High risk of Internet start-up
23
Benefits of E-commerceBenefits to organization
The availability of natural and international markets The decreased cost of processing distributing and retrieving information
Benefit to customerThe access to a vast number of products and services around the clock
Benefit to society The ability to deliver information services and product to people in cities in rural areas and in developing countries
24
Limitations Technological
The lack of universally accepted quality security and reliability standards
Insufficient telecommunication bandwidth
Need for special web servers in addition to network servers
Expensive accessibility
Nontechnological
A perception that EC is insecure
Unresolved legal issue
A lack of a critical mass of sellers and buyers
Opportunities Of E-commerce
bullProperty
transactions
bullsale amp Purchase of
goods
bullInsurance
bullBanking
bullOnline share
trading
bullPayment of taxes
amp services
bullTransportation
bullRenewal of
licenses
bullElectronic
payments
bullImport amp export
bullTravel amp Tourism
bullSecret information
amp coded online are
used by defense
forces
bullDesigning amp
development of
weapons and
information about
nuclear weapon
bullResearch in case
of new model
bullBooking of
tickets for
cinemas amp
concerts online
bullOnline games ndash
chess checkers
amp scrabble
bullMovies TV
bullOnline music
bullOnline education
bullDistant training amp
learning
bullVirtual university amp
tele- conferencing
bullResearch work
online
bullExpert Consultation
via audio amp video
Conf
bullTreatment amp
diagnosis online
bullEncyclopedia
Britannica online
bullCD-Rom refer -
Microsoft Encarta
Dictionaries amp
Thesauri
Copyright copy 2004 Pearson Education Inc Slide 6-26
A Quick Check
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
19
Electronic commerce (e-commerce EC) The process of buying selling transferring or exchanging products services andor information via computer networks including the Internet
E-business A broader definition of EC including buying and selling of goods and services and also servicing customers collaborating e-learning and conducting electronic transactions within an organization
Overview of E-Business and E-Commerce
E-Commerce amp E-Business
E-Commerce is what you dohellipE-Business is what you arehellip
bull Marketingbull Sellingbull Buying of
products and services on the Internet
E-Businessbull Enterprise designed for success
in the Information Agebull Creates new sources of shareholder
valuendash Building customer loyaltyndash Optimizing business processndash Creating new products and servicesndash Managing risk and compliancendash Reaching new marketsndash Enhancing human capitalndash Harnessing technologyndash Achieving market leadership
E-Commerce
Advantages of E-commerceOnline Business
All Time processing Economy Better Customer services Quick Comparison shopping Productivity gains Teamwork Information sharing convenience and control Fast and Time saving Customization
Limitations Cost factor System and data integrity System scalability Reliability Fulfillment and customer relationship problems Products people resist buying online Cultural language and trust issues Lack of customer Awareness High risk of Internet start-up
23
Benefits of E-commerceBenefits to organization
The availability of natural and international markets The decreased cost of processing distributing and retrieving information
Benefit to customerThe access to a vast number of products and services around the clock
Benefit to society The ability to deliver information services and product to people in cities in rural areas and in developing countries
24
Limitations Technological
The lack of universally accepted quality security and reliability standards
Insufficient telecommunication bandwidth
Need for special web servers in addition to network servers
Expensive accessibility
Nontechnological
A perception that EC is insecure
Unresolved legal issue
A lack of a critical mass of sellers and buyers
Opportunities Of E-commerce
bullProperty
transactions
bullsale amp Purchase of
goods
bullInsurance
bullBanking
bullOnline share
trading
bullPayment of taxes
amp services
bullTransportation
bullRenewal of
licenses
bullElectronic
payments
bullImport amp export
bullTravel amp Tourism
bullSecret information
amp coded online are
used by defense
forces
bullDesigning amp
development of
weapons and
information about
nuclear weapon
bullResearch in case
of new model
bullBooking of
tickets for
cinemas amp
concerts online
bullOnline games ndash
chess checkers
amp scrabble
bullMovies TV
bullOnline music
bullOnline education
bullDistant training amp
learning
bullVirtual university amp
tele- conferencing
bullResearch work
online
bullExpert Consultation
via audio amp video
Conf
bullTreatment amp
diagnosis online
bullEncyclopedia
Britannica online
bullCD-Rom refer -
Microsoft Encarta
Dictionaries amp
Thesauri
Copyright copy 2004 Pearson Education Inc Slide 6-26
A Quick Check
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
E-Commerce amp E-Business
E-Commerce is what you dohellipE-Business is what you arehellip
bull Marketingbull Sellingbull Buying of
products and services on the Internet
E-Businessbull Enterprise designed for success
in the Information Agebull Creates new sources of shareholder
valuendash Building customer loyaltyndash Optimizing business processndash Creating new products and servicesndash Managing risk and compliancendash Reaching new marketsndash Enhancing human capitalndash Harnessing technologyndash Achieving market leadership
E-Commerce
Advantages of E-commerceOnline Business
All Time processing Economy Better Customer services Quick Comparison shopping Productivity gains Teamwork Information sharing convenience and control Fast and Time saving Customization
Limitations Cost factor System and data integrity System scalability Reliability Fulfillment and customer relationship problems Products people resist buying online Cultural language and trust issues Lack of customer Awareness High risk of Internet start-up
23
Benefits of E-commerceBenefits to organization
The availability of natural and international markets The decreased cost of processing distributing and retrieving information
Benefit to customerThe access to a vast number of products and services around the clock
Benefit to society The ability to deliver information services and product to people in cities in rural areas and in developing countries
24
Limitations Technological
The lack of universally accepted quality security and reliability standards
Insufficient telecommunication bandwidth
Need for special web servers in addition to network servers
Expensive accessibility
Nontechnological
A perception that EC is insecure
Unresolved legal issue
A lack of a critical mass of sellers and buyers
Opportunities Of E-commerce
bullProperty
transactions
bullsale amp Purchase of
goods
bullInsurance
bullBanking
bullOnline share
trading
bullPayment of taxes
amp services
bullTransportation
bullRenewal of
licenses
bullElectronic
payments
bullImport amp export
bullTravel amp Tourism
bullSecret information
amp coded online are
used by defense
forces
bullDesigning amp
development of
weapons and
information about
nuclear weapon
bullResearch in case
of new model
bullBooking of
tickets for
cinemas amp
concerts online
bullOnline games ndash
chess checkers
amp scrabble
bullMovies TV
bullOnline music
bullOnline education
bullDistant training amp
learning
bullVirtual university amp
tele- conferencing
bullResearch work
online
bullExpert Consultation
via audio amp video
Conf
bullTreatment amp
diagnosis online
bullEncyclopedia
Britannica online
bullCD-Rom refer -
Microsoft Encarta
Dictionaries amp
Thesauri
Copyright copy 2004 Pearson Education Inc Slide 6-26
A Quick Check
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Advantages of E-commerceOnline Business
All Time processing Economy Better Customer services Quick Comparison shopping Productivity gains Teamwork Information sharing convenience and control Fast and Time saving Customization
Limitations Cost factor System and data integrity System scalability Reliability Fulfillment and customer relationship problems Products people resist buying online Cultural language and trust issues Lack of customer Awareness High risk of Internet start-up
23
Benefits of E-commerceBenefits to organization
The availability of natural and international markets The decreased cost of processing distributing and retrieving information
Benefit to customerThe access to a vast number of products and services around the clock
Benefit to society The ability to deliver information services and product to people in cities in rural areas and in developing countries
24
Limitations Technological
The lack of universally accepted quality security and reliability standards
Insufficient telecommunication bandwidth
Need for special web servers in addition to network servers
Expensive accessibility
Nontechnological
A perception that EC is insecure
Unresolved legal issue
A lack of a critical mass of sellers and buyers
Opportunities Of E-commerce
bullProperty
transactions
bullsale amp Purchase of
goods
bullInsurance
bullBanking
bullOnline share
trading
bullPayment of taxes
amp services
bullTransportation
bullRenewal of
licenses
bullElectronic
payments
bullImport amp export
bullTravel amp Tourism
bullSecret information
amp coded online are
used by defense
forces
bullDesigning amp
development of
weapons and
information about
nuclear weapon
bullResearch in case
of new model
bullBooking of
tickets for
cinemas amp
concerts online
bullOnline games ndash
chess checkers
amp scrabble
bullMovies TV
bullOnline music
bullOnline education
bullDistant training amp
learning
bullVirtual university amp
tele- conferencing
bullResearch work
online
bullExpert Consultation
via audio amp video
Conf
bullTreatment amp
diagnosis online
bullEncyclopedia
Britannica online
bullCD-Rom refer -
Microsoft Encarta
Dictionaries amp
Thesauri
Copyright copy 2004 Pearson Education Inc Slide 6-26
A Quick Check
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Limitations Cost factor System and data integrity System scalability Reliability Fulfillment and customer relationship problems Products people resist buying online Cultural language and trust issues Lack of customer Awareness High risk of Internet start-up
23
Benefits of E-commerceBenefits to organization
The availability of natural and international markets The decreased cost of processing distributing and retrieving information
Benefit to customerThe access to a vast number of products and services around the clock
Benefit to society The ability to deliver information services and product to people in cities in rural areas and in developing countries
24
Limitations Technological
The lack of universally accepted quality security and reliability standards
Insufficient telecommunication bandwidth
Need for special web servers in addition to network servers
Expensive accessibility
Nontechnological
A perception that EC is insecure
Unresolved legal issue
A lack of a critical mass of sellers and buyers
Opportunities Of E-commerce
bullProperty
transactions
bullsale amp Purchase of
goods
bullInsurance
bullBanking
bullOnline share
trading
bullPayment of taxes
amp services
bullTransportation
bullRenewal of
licenses
bullElectronic
payments
bullImport amp export
bullTravel amp Tourism
bullSecret information
amp coded online are
used by defense
forces
bullDesigning amp
development of
weapons and
information about
nuclear weapon
bullResearch in case
of new model
bullBooking of
tickets for
cinemas amp
concerts online
bullOnline games ndash
chess checkers
amp scrabble
bullMovies TV
bullOnline music
bullOnline education
bullDistant training amp
learning
bullVirtual university amp
tele- conferencing
bullResearch work
online
bullExpert Consultation
via audio amp video
Conf
bullTreatment amp
diagnosis online
bullEncyclopedia
Britannica online
bullCD-Rom refer -
Microsoft Encarta
Dictionaries amp
Thesauri
Copyright copy 2004 Pearson Education Inc Slide 6-26
A Quick Check
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
23
Benefits of E-commerceBenefits to organization
The availability of natural and international markets The decreased cost of processing distributing and retrieving information
Benefit to customerThe access to a vast number of products and services around the clock
Benefit to society The ability to deliver information services and product to people in cities in rural areas and in developing countries
24
Limitations Technological
The lack of universally accepted quality security and reliability standards
Insufficient telecommunication bandwidth
Need for special web servers in addition to network servers
Expensive accessibility
Nontechnological
A perception that EC is insecure
Unresolved legal issue
A lack of a critical mass of sellers and buyers
Opportunities Of E-commerce
bullProperty
transactions
bullsale amp Purchase of
goods
bullInsurance
bullBanking
bullOnline share
trading
bullPayment of taxes
amp services
bullTransportation
bullRenewal of
licenses
bullElectronic
payments
bullImport amp export
bullTravel amp Tourism
bullSecret information
amp coded online are
used by defense
forces
bullDesigning amp
development of
weapons and
information about
nuclear weapon
bullResearch in case
of new model
bullBooking of
tickets for
cinemas amp
concerts online
bullOnline games ndash
chess checkers
amp scrabble
bullMovies TV
bullOnline music
bullOnline education
bullDistant training amp
learning
bullVirtual university amp
tele- conferencing
bullResearch work
online
bullExpert Consultation
via audio amp video
Conf
bullTreatment amp
diagnosis online
bullEncyclopedia
Britannica online
bullCD-Rom refer -
Microsoft Encarta
Dictionaries amp
Thesauri
Copyright copy 2004 Pearson Education Inc Slide 6-26
A Quick Check
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
24
Limitations Technological
The lack of universally accepted quality security and reliability standards
Insufficient telecommunication bandwidth
Need for special web servers in addition to network servers
Expensive accessibility
Nontechnological
A perception that EC is insecure
Unresolved legal issue
A lack of a critical mass of sellers and buyers
Opportunities Of E-commerce
bullProperty
transactions
bullsale amp Purchase of
goods
bullInsurance
bullBanking
bullOnline share
trading
bullPayment of taxes
amp services
bullTransportation
bullRenewal of
licenses
bullElectronic
payments
bullImport amp export
bullTravel amp Tourism
bullSecret information
amp coded online are
used by defense
forces
bullDesigning amp
development of
weapons and
information about
nuclear weapon
bullResearch in case
of new model
bullBooking of
tickets for
cinemas amp
concerts online
bullOnline games ndash
chess checkers
amp scrabble
bullMovies TV
bullOnline music
bullOnline education
bullDistant training amp
learning
bullVirtual university amp
tele- conferencing
bullResearch work
online
bullExpert Consultation
via audio amp video
Conf
bullTreatment amp
diagnosis online
bullEncyclopedia
Britannica online
bullCD-Rom refer -
Microsoft Encarta
Dictionaries amp
Thesauri
Copyright copy 2004 Pearson Education Inc Slide 6-26
A Quick Check
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Opportunities Of E-commerce
bullProperty
transactions
bullsale amp Purchase of
goods
bullInsurance
bullBanking
bullOnline share
trading
bullPayment of taxes
amp services
bullTransportation
bullRenewal of
licenses
bullElectronic
payments
bullImport amp export
bullTravel amp Tourism
bullSecret information
amp coded online are
used by defense
forces
bullDesigning amp
development of
weapons and
information about
nuclear weapon
bullResearch in case
of new model
bullBooking of
tickets for
cinemas amp
concerts online
bullOnline games ndash
chess checkers
amp scrabble
bullMovies TV
bullOnline music
bullOnline education
bullDistant training amp
learning
bullVirtual university amp
tele- conferencing
bullResearch work
online
bullExpert Consultation
via audio amp video
Conf
bullTreatment amp
diagnosis online
bullEncyclopedia
Britannica online
bullCD-Rom refer -
Microsoft Encarta
Dictionaries amp
Thesauri
Copyright copy 2004 Pearson Education Inc Slide 6-26
A Quick Check
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Copyright copy 2004 Pearson Education Inc Slide 6-26
A Quick Check
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Mainstream of e-commerce covers the following three areas
Electronic markets An electronic market is an inter -
organizational information system that provides facilities for
buyers amp sellers to exchange information about price amp
product offerings
EDI is the structured transmission of data between
organizations by electronic means It is used to transfer
electronic documents or business data from one computer
system to another computer system ie from one trading
partner to another trading partner without human
intervention
Internet Commerce Broad term covering all commercial
activity on the internet including auctioning placing orders
making payments transferring funds and collaborating with
trading partners Internet commerce is not a synonym for
electronic commerce (e-commerce) but one of its subsets
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Copyright copy 2004 Pearson Education Inc Slide 6-28
Business models
amp
Types Of E-commerce
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
29
Types of E-Commerce Transactions
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
B2C Business Models
1048708 E-tailerStorefront model
1048708 Portal model
1048708 Content Provider
1048708 Transaction Broker
1048708 Market Creator
1048708 Service Provider
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
E-tailerStorefront ModelThe customers and the seller interact directly egamazoncom dellcom playcom1048708 Organise an online catalogue of products1048708 Take orders through Web site1048708 Shopping cart technology1048708 Accept payments in a secure environment1048708 Send merchandise to customers1048708 Manage customer data1048708 Market Web site to potential customers1048708 Revenue through product sales1048708 Low barriers to entry -gt very competitive
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Portal Model (1)Portal sites give visitors access to a variety ofinformation in one place1048708 News sport weather online shopping searching1048708 Revenue through charging advertisers andcharging for premium services1048708 Charging strategies for portals1048708 charge merchants for a link1048708 per customer ldquoclick-throughrdquo1048708 reserve best areas for paying customers
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Portal Model (2)Horizontal portals ndash aggregate information ona broad range of topics eg search engines1048708 Yahoo Altavistacom Aboutcom1048708 Vertical portals (community sites) ndash largeamount of information in one subject area1048708 wwwwebmdcom Boltcom IVillagecom
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Content Provider1048708 Content providers distribute digital content(news music video artwork) over the Web1048708 WSJcom Rhapsodycom CNNcom1048708 Second largest source of B2C e-commercerevenue in 20021048708 Revenue generates through subscription fees pay for download or advertising
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Transaction Broker1048708 Sites that process transactions for consumers1048708 E-Tradecom Ameritradecom Monstercom1048708 Primary value proposition ndash saving of time and money for customers
Industries using this model1048708 Financial services1048708 Travel services1048708 Job placement services
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Market Creator 1048708 Uses Internet technology to create markets that bring buyers and sellers together1048708 Where they can display products search for products and establish prices1048708 Pricelinecom (reverse auction) eBaycom
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Service Provider1048708 Offers services online1048708 xDrivecom ndash information storage1048708 Mybconsultingcom ndash consulting for small businesses1048708 Value proposition ndash valuable convenient timesaving low-cost alternatives to traditionalservice providers1048708 Revenue models ndash subscription fees or one-time payment1048708 Mixing services with products ndash powerfulstrategy
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
B2C Applications
E-BankingE-TradingE-Auction
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
E-Banking
E-banking is a way through which users can do their transaction electronically or online over the internet
Features Of E-banking bull On Line Bill Payments Transfer Fundsbull Between Account Within Community Bank bullTransfer Funds To Account At Other Financial Institution bullMake Loan Payments bull24 Hours Service View Andbull Print Loan Account Historiesbull Real Time Account Access bullTime Saving bullNo Special Software Required
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
FORMS OF E-BANKING TELEPHONE BANKING- It is a service provided by a financial institution which allow its customer to perform transaction over the telephone This type of bank which operate through phones are also known as phone banks NET BANKING It allows the customer to conduct financial transaction on a website operated by their retail It is fast efficient and effective It provides 24 hours a day and 7 day a week accessibility ATM An automated teller machine (ATM) or automatic banking machine (ABM) is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public space without the need for a cashier human clerk or bank teller DEBITCREDIT CARDS CREDIT CARDS Credit card is a plastic card which is issued by a bank It is issued by of high credit ranking Bank issues credit card to the customer up to certain limit EFT (ELECTRONIC FUND TRANSFER) It involves transfer of funds from bank account of one customer to bank account of another customer electronically MOBILE BANKING It refers to provision and availment of banking and financial services with the help of mobile telecommunication devices
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Services through E-banking
Payment Of bills Fund TransferCredit CardsRailway PassInvestment Through Internet bankingRecharging Prepaid billShopping
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Advantages amp limitations of E-banking CUSTOMER Anytime Banking Anywhere Banking Quick Service Online Shopping Time Saving Customer SatisfactionBANKS Minimizes cost Global Coverage Central Database Customer-Bank relationship Reduces paper work High Productivity Advertising toolGOVERNMENT Global Market Cashless Banking TransparencyTRADERS Instant settlement Promotion of business enterprises LIMITATIONS OF E-BANKING Banking system not ready Laws of internet not ready Increasing frauds Security issues Low level of Awareness Hesitation on the part of Customers
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
E-Trading The process of conducting stock market transactions (buy and sell orders) using an electronic platform that transfers the orders to a physical person to complete Electronic trading has become a popular method due to its ability to conducts transactions quickly and effectively
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times
It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties
The ultimate decision is also controlled by you whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your businessOne Seller Many Potential Buyers
forward auctionAn auction in which a seller offers a product to many potential buyers
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
46
E-commerce in which an individual sells products or services to other individuals
It refers to exchanges involving transactions between and among consumers These exchanges may or may not include a third party involvement as in the case of auction exchange eBay or classified ads like www
it enables customer to directly deal with each other through classified ads or auctions
numberonclassifiedcomwwwshadicomBazzecombidorbuycominfrocketcom
Customer-to-Consumer(C2C)
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
47
E-commerce in which both the buyer and the seller are individuals (not businesses)
C2C auctions
Classified Ads
Personal Services
Support services to C2C
The C 2C model involves the popular peer-to- peer(P2p )software that facilitates the exchanges of data directly between individuals over the internet
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
48
Customer -to-Business (C2B)E-commerce in which customers make known a particular need for a product or service and suppliers complete to provide the product or service to consumers C2B is a business model in which consumers (individuals) offer products and services to companies and the companies pay themEg Pricelinecom For example ndashsurveyscoutscom(this site pays people to respond to the surveys and to know the customers better every company is conducting a survey)reverse auctioncom pricelinecom
C2B E-commerce
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Consumers can band together to form and present themselves as a buyer group to business in consumer to business relationships Such groups may be economically motivated as with the demand aggregates mercattacom or socially oriented or with cause related advocacy group like voxcapcom
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
50
Business-to-Business (B2B) E-commerce in which both the sellers and the buyers are business organizations Eg SAIL- Steel junction
B2B activities includepurchasing and procurement supplier management inventory management channel management sales activities payment activities payment management and services support
B2B E-commerce
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
51
Companies not only sell goods but also bull Track inventorybull Order productsbull Send invoicesbull Receive payments online Collaborative partnerships onbull Product designsbull Sales and marketing campaignsbull Sharing information with partners for efficient working together B2B transactions need not necessarily be only for products ndash it can be for services
as well- egStock broker buying shares from electronic exchange for a client Bank requesting for credit information of a prospect from a credit reporting agency
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
52
Major types of B2B modelsa Sell-side e-marketplaceb Selling through intermediariesc Selling through auctionsd Buy-side marketplaces E-procurement Reverse auctions Other methods
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
53
Sell-side marketplace B2B model in which organizations sell to other
organizations from their own private e-marketplace andor from a third-
party site
Buy-side marketplace B2B model in which organizations buy needed
products or service from other organizations electronically often
through a reverse auction
E-procurement Purchasing by using electronic support
E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Major B2B Models
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Types of B2E EC
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
55
One-to-Many Intermediaries and Auctions Intermediaries distribute products to a large
number of buyers Buy products from many vendors and
aggregate them into one catalog from which they sell
Also offer their products online via storefronts
Eg Amazoncom SAMrsquos Club See the screenshot below
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
56
One-to-Many Intermediaries and Auctions
Using Auctions on the Sell-Side Revenue generation Cost savings Increased page views Member acquisition and retention
To bid users have to register Databases of future business contacts httpasset-auctionscom example ndash look
at their management team
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
57
One-from-Many Buy-SideE-Marketplaces and E-Procurement
buy-side e-marketplace
A corporate-based acquisition site that uses reverse auctions negotiations group purchasing or any other e-procurement method
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
58
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Inefficiencies in Traditional Procurement Management
procurement management
The coordination of all the activities relating to purchasing goods and services needed to accomplish the mission of an organization
maverick buying
Unplanned purchases of items needed quickly often at non-pre-negotiated higher prices
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
59
One-from-Many Buy-SideE-Marketplaces and E-Procurement E-Procurement Methods
Conduct bidding or tendering (a reverse auction) in a system in which suppliers compete against each other
Buy directly from manufacturers wholesalers or retailers from their catalogs and possibly by negotiation
Buy from the catalog of an intermediary
(e-distributor) that aggregates sellersrsquo catalogs
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
60
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Buy at private or public auction sites Buy at an exchange Collaborate with suppliers to share
information about sales and inventory so as to reduce inventory and stock-outs and enhance just-in-time delivery
Join a group-purchasing system that aggregates participantsrsquo demand creating a large volume Eg see httpusa-llccomresultsasp
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
The Group Purchasing Process
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
62
One-from-Many Buy-SideE-Marketplaces and E-Procurement
Benefits of E-Procurement The electronic acquisition of goods and
services for organizations By automating and streamlining the
laborious routines of the purchasing function purchasing professionals can focus on more strategic purchases
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
63
Buy-Side E-MarketplacesReverse Auctions
request for quote (RFQ) The buyer opens an auction on its own
server and invite potential suppliers to submit the bids
The ldquoinvitationrdquo to participate in a tendering (bidding) system
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
64
Exhibit 56 Reverse Auction Process
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
65
Other E-Procurement Methodsdesktop purchasing
Direct purchasing from internal marketplaces without the approval of supervisors and without the intervention of a procurement department
internal aggregation
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
66
Other E-Procurement Methodsbartering exchange
An intermediary that links parties in a barter a company submits its surplus to the exchange and receives points of credit which can be used to buy the items that the company needs from other exchange participants
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
67
Major Business-to-Business (B2B) Business Models
B2B Hub also known as marketplaceexchange electronic marketplace where suppliers and
commercial purchasers can conduct transactions
may be a general (horizontal marketplace) or specialized (vertical marketplace)verticalNetcom
E-distributor supplies products directly to individual
businesses
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
68
B2B Service Provider sells business services to other firms
Matchmaker links businesses together charges transaction or usage fees
Infomediary gather information and sells it to
businesses
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Introduction ndash what is the B2B field
Benefits of B2B Creates new sales (purchase) opportunities Eliminates paper and reduces administrative costs Expedites processing and reduces cycle time Lowers search costs and time for buyers to find
products and vendors Increases productivity of employees dealing with
buying andor selling Reduces errors and improves quality of services Makes product configuration easier
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
70
Introduction ndash what is the B2B field Benefits of B2B (continued)
Reduces marketing and sales costs (for sellers) Reduces inventory levels Enables customized online catalogs with
different prices for different customers Increases production flexibility permitting just-
in-time delivery Reduces procurement costs (for buyers) Facilitates mass customization Increases opportunities for collaboration
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Introduction ndash what is the B2B field
Limitations of B2B Discussed later in the course
Channel conflict Operation of public exchanges Elimination of the distributor or the retailer
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
72
Types of E-commerce conthellipIntrabusiness( intraorganizational) commerce E-commerce in which an organization uses EC internally to improve its operations
B2E( business to employees) EC A special case of intrabusiness e-commerce in which an organization delivers product or services to its employees
GovernmentndashtondashCitizens(G2C) E-commerce in which a government provide services to its citizen via EC technologies
Government-tondashbusiness (G2B) E-commerce in which a government does business with other governments as well as with businesses
Mobile Commerce (m-commerce) E-commerce conducted in a wireless environment
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
73
E-government The use of e-commerce to deliver information and public services to citizens business partners and suppliers of government entities and those working in public sector
E-government application can be divided into three major categories government-to-citizens (G2C) governmentndashtondashbusiness (G2B) and government-tondashgovernment (G2G)
E-Government
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
74
Business Model The method by which a company generates revenues to sustain itself
Storefront model ndash this models provides A web site with product information A shopping cart and an online ordering mechanism
Click-and-mortar model- a ldquoclick-and-mortar ldquo shop combines a web site with a physical store
Broker model ndash brokers are market makers As intermediaries they bring buyers and sellers together and facilitate transactions between them
Subscription-based access model- many service operators provide subscription ndashbased access to their service A visitors pays A fixed fee per month or year in return for unlimited access to the service
EC Business Model
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
75
Portal Side In this model a portal offers one-step access to specific content amp services such as news stock information message boards or chat Allowing visitors to personalize the interface amp content(yahoocom or my cnncom)makes its simpler for the user to recognize with the portal
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
76
Sell-Side Marketplaces
The key mechanisms in the sellndashside model are
Electronic catalogs that can be customized for each large buyer and
Forward auctions
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
77
Group Purchasing The aggregation of purchasing orders from many buyers so that a volume discount can be obtained
Desktop Purchasing E-procurement method in which supplierrsquos catalogs are aggregated into an internal master catalog on the buyerrsquos server for use by the companyrsquos purchasing agents
Buy-Side Marketplaces
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Is E-Commerce same as E Business
Meaning
E-business E-commerce
E-business includes buying amp selling of goods amp services amp also servicing customers amp collaborating with business partners through electronic means
The Term E-commerce has a narrower meaning that E-business It refers to using the internet to order and pay for products or services Thus E-commerce is a subset of e-business
Range of
Activities
Whereas E-business covers the full range of business activities that happen or be assisted via e-mail or the web it happens when an organization pays another organization for supplies via the web
E-commerce refers specifically to paying for good amp services E-commerce happens when a customer buys a ticket online or buys something from an art shop amp pays for it either when he receives the product or directly online at the time of ordering It
Nature
In contrast the term electronic business is inclusive as it also includes the exchange of information not directly related to the actual buying amp selling of goods Increasingly businesses are using electronic mechanisms to distribute information and provide customer support These are related to business activities amp so are covered under e-business
The term E-commerce is restrictive as it does not fully encompass the true nature of the many types of information exchanges via telecommunication devices
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
79
The major mechanisms for buying and selling on the Internet are electronic catalogs Electronic auctions and online bartering Electronic Catalogs Electronic catalogs on CD-ROM and the Internet have gained popularity Electronic catalogs consist of a product database directory and search capabilities and a presentation functionElectronic Auctions (E-auction) A market mechanism by which sellers place offers and buyers make sequential bids and prices are determined dynamically by competitive bidding Electronic bartering The exchange of goods or services without a monetary transaction
Major EC Mechanism
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
80
Online shopping Three features
A catalog for searching product information A checkout section where you can make secure payments A customer service page for assistance
Click amp Mortar stores has a physical store as well as a website where you can shop
Electronic catalogs should be like directories grouping similar products and also provide a search facility within a product group for items
Shopping cart- electronic holding area for selected products till billing Payment through
One time credit card Set up online account- information is provided once only
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
81
Customer Services Site should have
Contact information- tel and regular mail addresss Return policies Shipping policies Charges and fees- what are hidden fees
Online banking Creating accounts fund transfer statements view
record transactions pay bills apply for loans Online finance
Investing credit cards insurance buying mutual funds tax returns filing financial planning etc
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
82
Electronic Checks
Electronic Credit Cards
Purchasing Cards
Electronic Cash
Electronic Bill Presentment and Payments
Paying Bills at ATMs
Electronic Payments
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
83
Privacy Loss of Jobs One of the most interesting EC issues relating to loss of jobs is that of intermediation Intermediaries provide two types of services (1) matching and providing information and (2) value-added services such as consultingDisintermediation Elimination of intermediaries in ECReintermediation Occurs where intermediaries such as brokers who provide value-added services and expertise cannot be entirely eliminated from EC
9 Ethical issues in e-business
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
84
Fraud on the internet
Domain names
Taxes and other fees
copyright
Legal Issues Specific to E-Commerce
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Copyright copy 2004 Pearson Education Inc Slide 6-85
Convergence ndashMedia convergence
Multimedia Content for e-commerce
applications
Multimedia Storage Servers amp electronic
Commerce applications
Information delivery
Transport amp e-commerce applications
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Multimedia Content for e-commerce applications
86Possible components of Multimedia
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
What is Multimedia
Multimedia the technical definition of multimedia is the use of digital data in many forms digital data in more than one format such as combination of text audio video amp graphics in a computer filedocument
87
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Multimedia applications classification ndashfor
consumer marketplace Entertainment Related Movies on demand video interactive
advertisements multi-player games discussion forums Finance Related Internet banking financial news amp services market
related information Online Home services Home Shopping e-catalogues disease
diagnosis over the internet Training amp Education related Interactive trainings video
conferencing online classrooms online degrees
88
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Traditional division of content by industry
89
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
What is Convergence Convergence broadly defined is the melding of consumer
electronics television publishing telecommunications and computer for the purpose of facilitating new forms of information ndashbased commerce
Convergence in this instance is defined as the interlinking of computing and other information technologies media content and communication networks that have arisen as the result of the evolution and popularization of the Internet as well as the activities products and services that have emerged in the digital media space
90
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Electronic Commerce amp Media Convergence Multimedia convergence applies to the convergence of text video
data image graphics and full motion video into digital content Cross media convergence refers to the integration of various industries ndashentertainment publication and communication media ndashbased on multimedia content
Media convergence is not just a technological shift or a technological process it also includes shifts within the industrial cultural and social paradigms that encourage the consumer to seek out new information
This type of convergence is very popular For the consumer it means more features in less space while for the media partners it means remaining competitive in the struggle for market dominance
91
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Elements of electronic Commerce applications
92
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Client Server Architecture in E-commerce
93
Application Logic
Presentation Logic
Application Logic
Multimedia Content
Processed request
Result
Multimedia server
Multimedia desktop
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Electronic Commerce Framework
94
Electronic Commerce ApplicationbullSupply Chain ManagementbullVideo On demand bullRemote banking bullProcurement amp purchasingbullOn-line marketing amp advertisingbullHome shopping
Technical standards for electronic documents multimedia amp network
protocols
Public policylegal and privacy issues
Common business services infrastructure (Security authentication electronic payment directories catalogs )
The messaging and information distribution infrastructure
The information Superhighway infrastructure (Telecom cable TV wireless Internet )
Multimedia content and network publishing infrastructure
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Information Delivery Transport amp E-Commerce Applications
Information Transport Providers Information Delivery Methods
Telecommunication companies Long-distance telephone lines Local telephone lines
Cable television companies Cable TV coaxial fiber optic and satellite lines
Computer based on ndashline servers Internet commercial on-line service providers
Wireless communications Cellular and radio networks paging systems
95
Transport Routes for EC application
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Consumer Access devices
96
Information Consumers Access Devices
Computers with audio amp video capabilities
Personal desktop computing (workstations multimedia PC )Mobile computing (Laptop amp notebook)CD-ROM-equipped computers
Telephonic devices Videophones
Consumer electronics Television +set-top box Game systems
Personal digital systems (PDAs) Pen-based computingVice ndashdriven computingSoftware agents
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Know about various Applications of E-commerce
Online Education Online banking Online Shopping Online Travel Services Online Insurance Industry Online Real estate Services E-auction
97
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Copyright copy 2004 Pearson Education Inc Slide 6-98
A Quick Check
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
99
Pure versus partial EC Electronic commerce can take several forms
depending on the degree of digitization- the transformation from physical to digital- involved The degree of digitization can relate to(1) the product (service) sold (2) the process or (3) the delivery agent (or intermediary)
In pure EC all dimensions are digital If there is at least one digital dimension we consider
the situation partial EC Brick- and-mortar organizations Organization in
which the product the process and the delivery agent are all physical (traditional)
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
100
Virtual organization Organization in which the product the process and the delivery agent are all digital also called pure ndash play organization
Click-andndash mortar Organization in which the product the process and the delivery agent may be physical or digital
Pure vs Partial EC conthellip
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Electronic Commerce Framework
101
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Brief History 1970s Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s Electronic Data Interchange (EDI) for e-commerce within companies Used by businesses to transmit data from one business to another
1990s the World Wide Web on the Internet provides easy-to-use technology for information publishing and dissemination Cheaper to do business (economies of scale) Enable diverse business activities (economies of scope)
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Ecommerce infrastructure
Information superhighway infrastructure Internet LAN WAN routers etc telecom cable TV wireless etc
Messaging and information distribution infrastructure HTML XML e-mail HTTP etc
Common business infrastructure Security authentication electronic payment
directories catalogs etc
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
The Main Elements of E-commerce
Consumer shopping on the Web called B2C (business to consumer)
Transactions conducted between businesses on the Web call B2B (business to business)
Transactions and business processes that support selling and purchasing activities on the Web Supplier inventory distribution payment
management Financial management purchasing products and
information
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
The process of e-commerce1 Attract customers
Advertising marketing
2 Interact with customers Catalog negotiation
3 Handle and manage orders Order capture Payment Transaction Fulfillment (physical good service good digital good)
4 React to customer inquiries Customer service Order tracking
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Web-based E-commerce Architecture
Client
Tier 1
Web Server
Tier 3Tier 2 Tier N
Application Server
Database Server
DMS
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
E-commerce Technologies Internet Mobile technologies Web architecture Component programming Data exchange Multimedia Search engines Data mining Intelligent agents
Access security Cryptographic security Watermarking Payment systems
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Infrastructure for E-commerce The Internet
system of interconnected networks that spans the globe routers TCPIP firewalls network infrastructure network
protocols The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers web servers HTTP HTML Web architecture
Clientserver model N-tier architecture eg web servers application servers
database servers scalability
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
E-Commerce Software Content Transport
pull push web-caching MIME Server Components
CGI server-side scripting Programming Clients Sessions and Cookies Object Technology
CORBA COM Java BeansRMI Technology of Fulfillment of Digital Goods
Secure and fail-safe delivery rights management
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
3901 EMTM 553 110
System Design Issues Good architectural properties
Functional separation Performance (load balancing web
caching) Secure Reliable Available Scalable
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
Creating and Managing Content What the customer see Static vs dynamic content Different faces for different users Tools for creating content Multimedia presentation Integration with other media Data interchange HTML XML (Extensible Markup Language)
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
112
Types of Electronic Auctions
Forward auction An auction that sellers use as a selling channel to many potential buyers the highest bidder wins the item
Reverse auction An auction in which one buyer usually an organization seeks to buy a product or a service and suppliers submit bids most common model for large purchase
SURFING THE NET
SURFING THE NET
