UNIT : III

PREPARED BY ARUN PRATAP SINGH

WEB TECHNOLOGY AND COMMERCE (MCSE 201)

PREPARED BY ARUN PRATAP SINGH 1

1

INTRODUCTION TO COMMERCE :

Commerce is the exchange of something of value between two entities. That "something“ may be

goods, services, information, money, or anything else the two entities consider to have value.

Commerce is the central mechanism from which capitalism is derived.

INTRODUCTION TO ELECTRONIC COMMERCE :

Electronic commerce, commonly known as e-commerce or e-Commerce, is a type of industry

where the buying and selling of products or services is conducted over electronic systems such

as the Internet and other computer networks. Electronic commerce draws on technologies such

as mobile commerce, electronic funds transfer, supply chain management, Internet

marketing, online transaction processing, electronic data interchange (EDI),inventory

management systems, and automated data collection systems.

Electronic commerce is generally considered to be the sales aspect of e-business. It also consists

of the exchange of data to facilitate the financing and payment aspects of business transactions.

This is an effective and efficient way of communicating within an organization and one of the most

effective and useful ways of conducting business.

E-commerce can be divided into 7 subsections:

E-tailing or "virtual storefronts" on websites with online catalogs, sometimes gathered into a

"virtual mall"

Buying or selling on websites and/or online marketplaces

The gathering and use of demographic data through web contacts and social media

Electronic data interchange, the business-to-business exchange of data

E-mail and fax and their use as media for reaching prospective and established customers

(for example, with newsletters)

Business-to-business buying and selling

The security of business transactions

UNIT : III

PREPARED BY ARUN PRATAP SINGH 2

2

E-tailing or The Virtual Storefront and the Virtual Mall

As a place for direct retail shopping, with its 24-hour availability, a global reach, the ability to

interact and provide custom information and ordering, and multimedia prospects, the Web is

rapidly becoming a multibillion dollar source of revenue for the world's businesses. A number of

businesses already report considerable success. As early as the middle of 1997, Dell Computers

reported orders of a million dollars a day. By early 1999, projected e-commerce revenues for

business were in the billions of dollars and the stocks of companies deemed most adept at e-

commerce were skyrocketing.

Market Research

In early 1999, it was widely recognized that because of the interactive nature of the Internet,

companies could gather data about prospects and customers in unprecedented amounts -through

PREPARED BY ARUN PRATAP SINGH 3

3

site registration, questionnaires, and as part of taking orders. The issue of whether data was being

collected with the knowledge and permission of market subjects had been raised.

Electronic Data Interchange (EDI)

EDI is the exchange of business data using an understood data format. It predates today's

Internet. EDI involves data exchange among parties that know each other well and make

arrangements for one-to-one (or point-to-point) connection, usually dial-up.

E-Mail, Fax, and Internet Telephony

E-commerce is also conducted through the more limited electronic forms of communication called

e-mail, fax, and the emerging use of telephone calls over the Internet. Most of this is business-

to-business, with some companies attempting to use e-mail and fax for unsolicited ads (usually

viewed as online junk mail or spam) to consumers and other business prospects. An increasing

number of business Web sites offer e-mail newsletters for subscribers. A new trend is opt-in e-

mail in which Web users voluntarily sign up to receive e-mail, usually sponsored or containing

ads, about product categories or other subjects they are interested in.

Business-to-Business Buying and Selling

Thousands of companies that sell products to other companies have discovered that the Web

provides not only a 24-hour-a-day showcase for their products but a quick way to reach the right

people in a company for more information.

The Security of Business Transactions

Security includes authenticating business transactors, controlling access to resources such as

Web pages for registered or selected users, encrypting communications, and, in general, ensuring

the privacy and effectiveness of transactions. Among the most widely-used security technologies

is the Secure Sockets Layer (SSL), which is built into both of the leading Web browsers.

• Electronic commerce was identified as the facilitation of commercial transactions

electronically, using technology such as Electronic Data Interchange (EDI) and Electronic

Funds Transfer (EFT).

• What is EDI?

• What is EFT?

Electronic Data Interchange: 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.

PREPARED BY ARUN PRATAP SINGH 4

4

Electronic Funds Transfer : EFT is the electronic exchange or transfer of money from one account

to another.

HİSTORY OF E-COMMERCE :

• The growth and acceptance of credit cards, automated teller machines (ATM) and

telephone banking in the 1980s were also forms of electronic commerce.

• Another form of E-Commerce was the airline reservation system, for example Sabre in the

USA and Travicom in the UK.

• By the end of 2000, many European and American business companies offered their

services through the World Wide Web.

• Since then people began to associate a word “E-Commerce" with the ability of purchasing

various goods through the Internet using secure protocols and electronic payment

services.

ADVANTAGES OF E-COMMERCE :

• Faster buying/selling procedure, as well as easy to find products.

• Buying/selling 24/7.

• Low operational costs and better quality of services.

• Easy to start and manage a business.

• No need of physical company set-ups.

• Customers can easily select products from different providers without moving around

physically.

DISADVANTAGES OF E-COMMERCE :

PREPARED BY ARUN PRATAP SINGH 5

5

• There is no guarantee of product quality.

• There are many hackers who look for opportunities, and thus an ecommerce site, service,

payment gateways, all are always prone to attack.

ELECTRONIC COMMERCE AND PHYSICAL COMMERCE :

Generally speaking, e-commerce is about the sale and purchase of goods or services by electronic means, particularly over the internet. Figure 1.1 shows that in broad terms one can distinguish two types of commerce: physical commerce and e-commerce. In a physical or traditional commerce system, transactions take place via contact between humans usually in a physical outlet such as a store. For example, if you want to buy a book, you will go to a physical bookstore and buy the physical book from a salesman. In a pure e-commerce system, transactions take place via electronic means.

In this case, you will access a cyber bookstore and download a digital book from a server computer. These two cases represent the extremes: the traditional commerce system on one side and the pure e-commerce system on the other. There are many variants and in many cases, e-commerce and physical commerce can complement each other. For example, a physical book is ordered by electronic means and it is sent to you via physical means [Turban et al., 20001. According to Schneider and Perry [2000], e-commerce is more suitable for standard goods, low-value goods, digital goods, and simple services (i.e. intangible goods), whereas traditional commerce is more suitable for nonstandard goods, perishable goods, expensive goods, and extremely low-value goods. Complex products such as cars and nonstandard services are better served by integrating e-commerce and physical commerce. Strictly speaking, e-commerce has a very wide scope and can be further divided into different categories. The most popular type is, of course, Internet Commerce. It refers to business transactions over the internet and, in most cases, the transactions are carried out over a web

PREPARED BY ARUN PRATAP SINGH 6

6

system, so we may call it Web-based Electronic Business. Another broad categorization of e-commerce is to separate it into business focused or customer-focused e-commerce. In recent years, another term called e-business has emerged, In general, e-business has a wider perspective than e-commerce. It involves using information technologies in all aspects of the business. Hence, e-commerce can be viewed as a subset of e-business. However, like many other e-commerce books, we will use the following terms e-commerce, internet commerce, Web-based electronic business and e-business in an interchangeable manner. DIFFERENT TYPES OF E-COMMERCE :

Business-to-business (B2B) Consumer (B2C) Business-to-government (B2G) Consumer-to-consumer (C2C) Mobile commerce (m-commerce)

What is B2B e-commerce?

B2B e-commerce is simply defined as ecommerce between companies. About 80% of e-commerce is of this type.

Examples: Intel selling microprocessor to Dell Heinz selling ketchup to Mc Donalds

What is B2C ecommerce?

Business-to-consumer e-commerce, or commerce between companies and consumers, involves customers gathering information; purchasing physical goods or receiving products over an electronic network.

Example: Dell selling me a laptop

PREPARED BY ARUN PRATAP SINGH 7

7

What is B2G ecommerce?

Business-to-government e-commerce or B2G is generally defined as commerce between companies and the public sector. It refers to the use of the Internet for public procurement, licensing procedures, and other government-related operations

Example: Business pay taxes, file reports, or sell goods and services to Govt. agencies.

What is C2C ecommerce?

Consumer-to-consumer e-commerce or C2C is simply commerce between private individuals or consumers.

Example: Mary buying an iPod from Tom on eBay Me selling a car to my neighbour

What is m-commerce?

M-commerce (mobile commerce) is the buying and selling of goods and services through wireless technology-i.e., handheld devices such as cellular telephones

Mobile Ticketing Information Services Mobile Banking

BUSSINESS MODELS :

E-Commerce or Electronics Commerce business models can generally categorized in following categories.

PREPARED BY ARUN PRATAP SINGH 8

8

Business - to - Business (B2B)

Business - to - Consumer (B2C)

Consumer - to - Consumer (C2C)

Consumer - to - Business (C2B)

Business - to - Government (B2G)

Government - to - Business (G2B)

Government - to - Citizen (G2C)

Business - to - Business (B2B)

Website following B2B business model sells its product to an intermediate buyer who then sells the product to the final customer. As an example, a wholesaler places an order from a company's website and after receiving the consignment, sells the end product to final customer who comes to buy the product at wholesaler's retail outlet.

PREPARED BY ARUN PRATAP SINGH 9

9

PREPARED BY ARUN PRATAP SINGH 10

10

Business - to – Consumer (B2C)

Website following B2C business model sells its product directly to a customer. A customer can view products shown on the website of business organization. The customer can choose a product and order the same. Website will send a notification to the business organization via email and organization will dispatch the product/goods to the customer.

PREPARED BY ARUN PRATAP SINGH 11

11

PREPARED BY ARUN PRATAP SINGH 12

12

PREPARED BY ARUN PRATAP SINGH 13

13

PREPARED BY ARUN PRATAP SINGH 14

14

Consumer - to - Consumer (C2C)

Website following C2C business model helps consumer to sell their assets like residential property, cars, motorcycles etc. or rent a room by publishing their information on the website. Website may or may not charge the consumer for its services. Another consumer may opt to buy the product of the first customer by viewing the post/advertisement on the website.

Consumer - to - Business (C2B)

In this model, a consumer approaches website showing multiple business organizations for a particular service. Consumer places an estimate of amount he/she wants to spend for a particular service. For example, comparison of interest rates of personal loan/ car loan provided by various

PREPARED BY ARUN PRATAP SINGH 15

15

banks via website. Business organization who fulfills the consumer's requirement within specified budget approaches the customer and provides its services.

Business - to - Government (B2G)

B2G model is a variant of B2B model. Such websites are used by government to trade and exchange information with various business organizations. Such websites are accredited by the government and provide a medium to businesses to submit application forms to the government.

Government - to - Business (G2B)

Government uses B2G model website to approach business organizations. Such websites support auctions, tenders and application submission functionalities.

Government - to - Citizen (G2C)

Government uses G2C model website to approach citizen in general. Such websites support auctions of vehicles, machinery or any other material. Such website also provides services like registration for birth, marriage or death certificates. Main objectives of G2C website are to reduce average time for fulfilling people requests for various government services.

PREPARED BY ARUN PRATAP SINGH 16

16

INTEGRATION BUSINESS MODEL-

E-SERVICES :

The concept of e-service (short for electronic service) represents one prominent application of

utilizing the use of information and communication technologies (ICTs) in different areas.

However, providing an exact definition of e-service is hard to come by as researchers have been

using different definitions to describe e-service. Despite these different definitions, it can be

argued that they all agree about the role of technology in facilitating the delivery of services which

make them more of electronic services.

It seems compelling to adopt Rowley (2006) approach who defines e-services as: “…deeds,

efforts or performances whose delivery is mediated by information technology. Such e-service

includes the service element of e-tailing, customer support, and service delivery”. This definition

reflect three main components- service provider, service receiver and the channels of service

delivery (i.e., technology). For example, as concerned to public e-service, public agencies are the

service provider and citizens as well as businesses are the service receiver. The channel of

service delivery is the third requirement of e-service. Internet is the main channel of e-service

PREPARED BY ARUN PRATAP SINGH 17

17

delivery while other classic channels (e.g. telephone, call center, public kiosk, mobile phone,

television) are also considered.

E-service benefits :

Lu (2001) identifies a number of benefits for e-services, some of these are:

Accessing a greater customer base

Broadening market reach

Lowering of entry barrier to new markets and cost of acquiring new customers

Alternative communication channel to customers

Increasing services to customers

Enhancing perceived company image

Gaining competitive advantages

Potential for increasing customer knowledge

E-service domain :

The term ‘e-service’ has many applications and can be found in many disciplines. The two

dominant application areas of e-services are

E-business (or e-commerce): e-services mostly provided by businesses or [NGO|non-government

organizations] (NGOs) (private sector).

E-government: e-services provided by government to citizens or business (public sector is the

supply side). The use and description of the e-service in this page will be limited to the context of

e-government only where of the e-service is usually associated with prefix “public”: Public e-

services. In some cases, we will have to describe aspects that are related to both fields like some

conferences or journals which cover the concept of “e-Service” in both domains of e-government

and e-business.

Architecture :

Depending on the types of services, there are certain functionalities required in the certain layers

of e-service architectural framework, these are but not limited to – Data layer (data sources),

processing layers ( customer service systems, management systems, data warehouse systems,

integrated customer content systems), exchange layer (Enterprise Application Integration– EAI),

Interaction layer ( integrating e-services), and presentation layer (customer interface through

which the web pages and e-services are linked).

E-service cost factor :

PREPARED BY ARUN PRATAP SINGH 18

18

Some major cost factors are (Lu, 2001):

Expense of setting up applications

Maintaining applications

Internet connection

Hardware/software

Security concerns

legal issues

Training; and

Rapid technology changes

Major e-service keywords :

Some of the major keywords of e-service as found in the e-government research are as follows:

Acceptance

User acceptance of technology is defined according to Morris (1996, referred by Wu 2005,

p. 1)[21] as “the demonstrable willingness within a user group to employ information technology for

the tasks it is designed to support”. This definition can be brought into the context of e-service

where acceptance can be defined as the users’ willingness to use e-service or the willingness to

decide when and how to use the e-service.

Accessibility

Users’ ability to access to the e-service is important theme in the previous literature. For example,

Huang (2003)[22] finds that most of the websites in general fail to serve users with disabilities.

Recommendation to improve accessibility is evident in previous literature including Jaeger

(2006)[23] who suggests the following to improve e-services’ accessibility like: design for

accessibility from the outset of website development, Involve users with disabilities in the testing

of the site …Focus on the benefits of an accessible Web site to all users.

Administrative literacy

According to Grönlund et al. (2007),[24] for a simple e-service, the needs for knowledge and skills,

content and procedures are considerably less. However, in complicated services there are

needed to change some prevailed skills, such as replacing verbal skills with skill in searching for

information online.

Benchmarking

This theme is concerned with establishing standards for measuring e-services or the best

practices within the field. This theme also includes the international benchmarking of e-

government services (UN reports, EU reports); much critic has been targeting these reports being

PREPARED BY ARUN PRATAP SINGH 19

19

incomprehensive and useless. According Bannister (2007)[25] “… benchmarks are not a reliable

tool for measuring real e-government progress. Furthermore, if they are poorly designed, they risk

distorting government policies as countries may chase the benchmark rather than looking at real

local and national needs”

Digital divide

Digital divide is considered one of the main barriers to implementing e-services; some people do

not have means to access the e-services and some others do not know how to use the technology

(or the e-service). According to Helbig et al. (2009),[26] “we suggest E-Government and the digital

divide should be seen as complementary social phenomena (i.e., demand and supply). Moreover,

a serious e-government digital divide is that services mostly used by social elites."

E-readiness

Most of the reports and the established criteria focus on assessing the services in terms of

infrastructure and public policies ignoring the citizen participation or e-readiness. According to by

Shalini (2009),[27] “the results of the research project reveal that a high index may be only

indicating that a country is e-ready in terms of ICT infrastructure and info-structure, institutions,

policies, and political commitment, but it is a very poor measure of the e-readiness of citizens. To

summarize the findings, it can be said that Mauritius is ready but the Mauritians are not”

``E-readiness, as the Economist Intelligence Unit defines, is the measure of a country’s ability to

leverage digital channels for communication, commerce and government in order to further

economic and social development. Implied in this measure is the extent to which the usage of

communications devices and Internet services creates efficiencies for business and citizens, and

the extent to which this usage is leveraged in the development of information and communications

technology (ICT) industries. In general terms, the definition of e-readiness is relative,for instance

depending on a country in question's priorities and perspective.[28]

Efficiency

As opposed to effectiveness, efficiency is focused on the internal competence within the

government departments when delivering e-services. There is a complaint that researchers focus

more on effectiveness “There is an emerging trend seemingly moving away from the efficiency

target and focusing on users and governance outcome. While the latter is worthwhile, efficiency

must still remain a key priority for eGovernment given the budget constraints compounded in the

future by the costs of an ageing population. Moreover, efficiency gains are those that can be most

likely proven empirically through robust methodologies”[29]

Security

Security is the most important challenge that faces the implementation of e-services because

without a guarantee of privacy and security citizens will not be willing to take up e-government

services. These security concerns, such as hacker attacks and the theft of credit card information,

PREPARED BY ARUN PRATAP SINGH 20

20

make governments hesitant to provide public online services. According to the GAO report[30] of

2002 “security concerns present one of the toughest challenges to extending the reach of e-

government.The rash of hacker attacks, Web page defacing, and credit card information being

posted on electronic bulletin boards can make many federal agency officials—as well as the

general public—reluctant to conduct sensitive government transactions involving personal or

financial data over the Internet.” By and Large, Security is one of the major challenges that faces

the implementation and development of electronic services. people want to be assured that they

are safe when they are conducting online services and that their information will remain secure

and confidential

Stakeholders

Axelsson et al. (2009)[31] argue that the stakeholder concept-which was originally used in private

firms-, can be used in public setting and in the context of e-government. According to them,

several scholars have discussed the use of the stakeholder theory in public settings.[32] The

stakeholder theory suggests that need to focus on all the involved stakeholder s when designing

the e-service; not only on the government and citizens.

Usability

Compared to Accessibility, There is sufficient literature that addresses the issue of usability;

researchers have developed different models and methods to measure the usability and

effectiveness of eGovernment websites. However, But still there is call to improve these measures

and make it more compressive

``The word usability has cropped up a few times already in this unit. In the context of biometric

identification, usability referred to the smoothness of enrollment and other tasks associated with

setting up an identification system. A system that produced few false matches during enrollment

of applicants was described as usable. Another meaning of usability is related to the ease of use

of an interface. Although this meaning of the term is often used in the context of computer

interfaces, there is no reason to confine it to computers.

PREPARED BY ARUN PRATAP SINGH 21

21

CATEGORIES OF E-SERVICES :

PREPARED BY ARUN PRATAP SINGH 22

22

PREPARED BY ARUN PRATAP SINGH 23

23

WEB-ENABLED SERVICES :

Web enabled refers to a product or service that can be used through, or in conjunction with, the

World Wide Web. A Web-enabled product may be accessed through a Web browser or be able to

connect to other Web-based applications in order to synchronize data.

This term used to be an attractive buzzword to include in a product description, but now it would be

rarer to have technology that is not Web enabled.

Web-enabled, information-based services is clearly a hot area for business model innovation for

companies in nearly every consumer and b2b industry sector. But proving the ROI can be difficult

when most models still rely on advertising dollars for revenue. After studying a number of

successful examples that convert eyeballs to dollars through a number of creative revenue

streams, a few keys to success emerged:

1. With great content comes a community. A truly useful information-based service will

understand the range of needs of its users, and will aggregate content into one forum, eliminating

the hassle of dealing with providers one by one, question by

question. Arguably, theknot.com operates this model best, aggregating a range of relevant

wedding-related content at the macro-level, then drilling down to ratings and recommendations of

local service providers by zip code. Good-bye Yellow Book (are they still around?)

2. Enable both virtual and physical communities. This is the Weight Watchers business

model, rated by users as the most successful diet website. It lets the user choose how they want

to viagra usa engage, and provides a range of online-only or in-person options based on personal

preference. If you have ever been to a Weight Watchers meeting, then you know the power that

comes from this physical brand touch point (what company wouldn’t want their users to call

themselves “lifetime members” of their services?)

3. Use the data. Identifying a revenue-generating data play is likely the hardest way to monetize

an information-based service, but could have the highest payout. Johnson &

Johnson’s BabyCenter.com, the #1 website for moms (they reach 70% of all moms in the US)

developed a Marketing Solutions Center that consults to their advertisers and other companies

looking for ways to target moms online. Similarly,VibrantNation.com, the leading forum for

Boomer women, translates the data it receives from its forums into a b2b marketing service.

PREPARED BY ARUN PRATAP SINGH 24

24

A Web service needs to be created and its interface must be defined

A Web service needs to be published to one or more intranet or Internet

repositories for potential users to locate

A Web service needs to be located to be invoked by potential users

A Web service needs to be invoked to be of any benefit

A Web service may need to be unpublished when it is no longer available or

needed

Web services interactions

PREPARED BY ARUN PRATAP SINGH 25

25

WEB SERVICES ARCHITECHTURE

PREPARED BY ARUN PRATAP SINGH 26

26

MATCHMAKING SERVICES :

PREPARED BY ARUN PRATAP SINGH 27

27

PREPARED BY ARUN PRATAP SINGH 28

28

PREPARED BY ARUN PRATAP SINGH 29

29

PREPARED BY ARUN PRATAP SINGH 30

30

INFORMATION-SELLING ON THE WEB :

Information selling on the web is in the form of e-books including digital audio and video. Most

people use the Internet to do research, gather business intelligence, find fun things to do, indulge

their hobbies or as a medium for the exchange of information via e-mail. The idea behind this new

business model is to leverage this insatiable hunger for information on the web by creating and

selling digital information for profit.

What are Information Products? For the purpose of this article information products can be

classified into three:

1. eBooks - eBooks are electronic books you can read on your computer or your MP4 player

or print out if you prefer hard copies. eBooks are instantly delivered electronically via a simple

download from the Internet to the customer.

2. Audio - You can record your information using freely available software and a microphone.

Audio CDs are now being delivered instantly via digital download to the customer.

3. Video - They say a picture is worth a thousand words, a video is even more powerful.

Contrary to popular belief creating a video product is not difficult. Digital video cameras and the

necessary software are readily available. Most video cameras now come with full instructions and

the software to get this done. A well-planned video presentation may be what is needed to reach

your audience.

Why Information Products?

There are several reasons why this business model has become very attractive to many aspiring

entrepreneurs:

PREPARED BY ARUN PRATAP SINGH 31

31

1. Low cost entry. The cost for entry is small, you can create your products, build a website,

pay your hosting fees plus acquire the tools to start an effective e-mail campaign for under $500.

There is probably no other business with this much potential that you can start for so little money.

2. Easy to Create. Once you have gone through the process of creating your first product,

the process becomes second nature to you. You can create as many products as you wish to

enable you build multiple sources of income. The technology to do this is available in the form of

e-Book creation software. These specialized software will help you automate the entire process

including packaging and distribution.

3. Unlimited Inventory. Once you have created a successful product, it becomes an asset

that you own and control. There are no more production costs and the inventory is unlimited. You

do not need to purchase additional inventory because you now own a product that cannot be

depleted. Your job is to continue to market and promote your product for as long as there is

demand for it.

4. No shipping and handling required. Your product is delivered automatically without any

human intervention. No lost packages, no stamps and no delivery costs. The computer handles

all chores and tracks the delivery of your product to your customers.

5. Immediate Payment: No receivables, thank you. Product is delivered automatically once

payment is made.

6. You can work from home no long commutes necessary.