Electronic Commerce - Lecture 14

Electronic CommerceLecture 14Summary of Previous LectureHTML: The Language of the Web Writing HTMLNotepad FileSaving notepad as HTMLHTML basic Format and TagsBasic TagsHeader TagAlignmentViewing Code using a browserSummary of Previous LectureParagraphsMoving next line in HTMLListOrdered ListsOther Common tagsSpecial Characters using HTMLImage insert in a webpageHTML TablesHyperlinksSummary of Previous Lecture Front PageWhy to use FrontPage?Auto HTML CodeHow to start FrontPageHow to Create a WebsiteTemplatesFrontPage ViewsPreviewing a WebpageMeta Tags and getting Help from Front PageToday’s LectureElectronic Commerce definition.E-Commerce InfrastructureRelated DefinitionsDimensions of Electronic Commerce ProductProcessDelivery AgentCommerce DifferencesE-Commerce FieldToday’s LecturePeoplePublic PolicyTechnical standards and ProtocolsOrganizationElectronic MarketTypes of E-CommerceBusiness to Consumer Business to BusinessConsumer to Consumer Today’s LecturePerson to PersonConsumer to BusinessBusiness to EmployeeG2G (Government-to-Government), G2E (Government-to-Employee), G2B (Government-to-Business), B2G (Business-to-Government), G2C (Government-to-Citizen) Today’s LectureTypes of Inter organizational systemsElectronic data interchange (EDI)ExtranetsElectronic funds transfer (EFT)Integrated messaging systemsShared databasesElectronically-supported supply chain managementBenefits of E-CommerceBenefits to organizationBenefit to customersBenefits to societyToday’s LectureLimitations of E-CommerceSummaryIntroductionBusinesses (organizations) have always used the prevailing and emerging technologies to help fulfill their missionsNetworked computers, today’s prevailing technology, have become one of the most influential technologies in civilization’s history. Negate the importance of the “boundaries” associated with time, space, and size.Facilitate instantaneous communicationsIntroductionIntroductionThe Internet allows an organization of any size to exchange information at the speed of light, with anyone, anywhere, anytime.(Assuming that all parties to the information exchange have “unconstrained” broadband connections.)Electronic Commerce is the Solution for all!Electronic CommerceElectronic commerce is concerned with the buying and selling of products and services using telecommunication network, especially the internet.E-Commerce InfrastructureThe infrastructure for EC is a networked computing environment in business, home, and government.A global networked environment is known as the InternetA counterpart within organizations, is called an intranetAn extranet extends intranets so that they can be accessed by business partners.Definitions and Content of FieldE-Commerce Example WebsiteDimensions of Electronic CommerceE-Commerce Work in three dimensionsThe product (OR service)Can be sold physically or over the internet (digitally)The processCan also be physical or digitalThe delivery agent (or intermediary)Delivery agent can work both in Physical or digital medium.Example- The ProductProduct can be sold out at some physical market place.For example shopping from the marketElectric repair service etc.Shopping Mall in PakistanExample– The ProductDigital products can be downloaded or bought on CD.For example downloading latest Windows Version from Microsoft Website.Downloading a book from Amazon. COMThe ProcessProcess can be viewed as a sequence of activities to accomplish certain task.A business process or business method is a collection of related, structured activities or tasks that produce a specific service or product (serve a particular goal) for a particular customer or customers. Example – Physical ProcessIn shoe industry, different processes are done physically to make a shoe. This may include, selection of suitable leather, stitching, polishing, etc.There may be several processes within a process to accomplish certain task.Many processes are involved from taking raw material from the market, making of a shoe and delivering it to the customers.Example – Digital ProcessUsing a website when customer places an order, digital process is involved in between to deliver the product.Customer order handling processThe Delivery Agent -- ExamplePhysical delivery agent example includes a Postmaster delivering letters to homes.Mail delivery agent is a digital program to deliver the e-mail messages to a local recipient mailbox.Problem delivering letters when on strike Available 24 hoursCommerce differencesTraditional commerceall dimensions are physicalPure ECall dimensions are digitalPartial ECall other possibilities include a mix of digital and physical dimensionsPhysical agentDigital agentDigital ProductPhysical ProductPhysical processDigital processVirtual processVirtual delivery agentVirtual productElectronic commerce areasThe core of electronic commerceThe Dimensions of Electronic CommerceTraditional commerceEC applications are supported by infrastructures, and their implementation is dependent on four major areas (supporting pillars) people, public policy, technical standards and protocols, and other organizations.The Electronic Commerce FieldEC ManagementThe EC management coordinates the applications, infrastructures, and pillars. It also includes Internet marketing and advertisement.A Framework for Electronic Commerce9Electronic Commerce Applications• Stocks Jobs • On-line banking • Procurement and purchasing• Malls • On-line marketing and advertising• Home shopping • Auctions • Travel • On-line publishingPeople:Buyers, sellers,intermediaries,services, IS people,and managementPublicpolicy,legal, andprivacyissuesTechnical standardsfor documents,security, andnetwork protocolspaymentOrganizations:Partners,competitors,associations,government servicesInfrastructure(1)Common businessservices infrastructure(security smartcards/authenticationelectronic payment,directories/catalogs)(2)Messaging andinformation distributioninfrastructure(EDI, e-mail, Hyper TextTransfer Protocol)(3)Multimedia contentand networkpublishing infrastructure(HTML, JAVA, WorldWide Web, VRML)(4)Network infrastructure(Telecom, cable TVwireless, Internet)(VAN, WAN, LAN,Intranet, Extranet)(5)Interfacinginfrastructure(The databases,customers, andapplications)Management© Prentice Hall, 2000The PeoplePeople in electronic commerce are,Software developersUsers of softwareWhich include buyer, sellers, intermediaries How e-commerce is changing people?In the past going shopping was fun, something that you did with your friends or relatives. It was a social event. Today, Facebook and other social media networks are the driving force behind online shopping. Companies target potential customers and online communities. They advertise their brands and products in the right way people will talk about them, and news spreads throughout the online world much quicker than in the real world. Public PolicyPolicies like shipment of products, update of different features of products, online sale and purchase are now being developed as per e-commerce needs.For example Intellectual property rights policies.Technical standards and Protocols A technical standard is an established norm or requirement about technical systems.Standards can also be developed by groups such as trade unions, and trade associations to establish electronic commerce.For example standards for buying raw material and selling quality products, etc. OrganizationIt is a social group which distributes tasks for a collective goal.Different forms of organizations includeCorporations Government Non-GovernmentInternationalCharity etc.An essential pillar of E-Commerce framework.Electronic MarketsMarket: A market is a network of interactions and relationships where information, products, services, and payments are exchanged.The market handles all the necessary transactions.An electronic market is a place where shoppers and sellers meet electronically.Electronic MarketsIn electronic markets, sellers and buyers negotiate, submit bids, agree on an order, and finish the execution on- or off-line.11Shopper/PurchaserSeller/SupplierElectronic Market(Transaction Hander)Electronic commercenetwork(Infrastructure)Product/service information requestPurchase requestPayment or payment advicePurchase fulfillment requestPurchase change requestResponse to fulfillment requestShipping noticePayment approvalElectronic transfer of fundsElectronic transfer of fundsShopper/Purchaser’s BankPayment remittance noticeElectronic transfer of fundsTransaction Handler’s Bank(Automated Clearing House)Seller/Supplier’s BankElectronic Markets© Prentice Hall, 2000Response to information requestPurchase acknowledgmentShipping noticePurchase/service delivery (if online)Payment acknowledgmentTypes of E-CommerceE-Commerce can be classified into several different types, includingBusiness to Consumer Business to BusinessConsumer to Consumer Person to PersonConsumer to BusinessBusiness to EmployeeOther TypesG2G (Government-to-Government), G2E (Government-to-Employee), G2B (Government-to-Business), B2G (Business-to-Government), G2C (Government-to-Citizen) Business to Consumer E-CommerceBusiness to Consumer (B2C) is the most commonly form of e-commerce, where a business sells goods and services to consumers for their personal use and consumption. Business to BusinessBusiness to Business (B2B) e-commerce focuses on transactions between businesses.For example supply of raw material from one company to another.All relevant information is shared between computers using e-commerce.Consumer to ConsumerConsumer to Consumer (C2C) e-commerce gives individuals an opportunity to sell items to others using an intermediary, such as e-bay.com, amazon.com, olx.com.pk.The seller is responsible for preparing the goods for sale, placing the ad for the product at the online auction or trading site, and shipping the goods. The market intermediary is responsible for maintaining the site, including the search engine through which buyers locate the product for sale, and processing the payments, both from the buyer and to the seller. Example – A C2C WebsitePerson to PersonPerson to Person (P2P) technology allows users of the Internet to share files and computer resources directly, without going through a Web server. However, since the file sharing is supposed to be provided free of charge, the challenge is to make enough money to keep the P2P site operating. The most famous P2P file-sharing site in recent history is Napster.com. Consumer to BusinessConsumers create value and firm confirms its value.For example, when a consumer writes reviews, or when a consumers gives a useful idea for new product development, then this individual is creating value to the firm, if the firm adopts the input. Business to EmployeeIt uses an intra-business network which allows companies to provide products and/or services to their employeesTypically, companies use B2E networks to automate employee-related corporate processes, this may includeOnline insurance policy management Corporate announcement dissemination Online supply requests Special employee offers Employee benefits reporting etcElectronic BusinessE-Business describes the broadest definition of EC. It includes customer service and intra business tasks. It is frequently used interchangeably with ECOther typesG2G (Government-to-Government)An online non-commercial interaction between Government organizations, departments, and authorities and other Government organizations, departments, and authorities. G2E (Government-to-Employee)An online interactions through instantaneous communication tools between government units and their employees. Other TypesG2B (Government-to-Business)An online non-commercial interaction between local and central government and the commercial business sector, with the purpose of providing businesses information and advice on e-business etc. Other TypesB2G (Business-to-Government) B2G networks provide a platform for businesses to bid on government auctions etc.G2C (Government-to-Citizen), It offers communication link between a government and private individuals or residents. An interorganizational information system (IOS) involves information flow among two or more organizations.Its major objective is efficient routine transaction processing, such as transmitting orders, bills, and payments.A typical IOS includes a company and its suppliers and and/or customers.Interorganization Information SystemsElectronic data interchange (EDI)ExtranetsElectronic funds transfer (EFT)Integrated messaging systemsShared databasesElectronically-supported supply chain managementTypes of Interorganizational SystemsElectronic data interchange (EDI)It is used to transfer electronic documents or business data from one computer system to another computer system, i.e. from one trading partner to another trading partner without human intervention.It is termed as the structured transmission of data between organizations by electronic means. ExtranetsUsed in B2B e-commerce model.An extranet is a computer network that allows controlled access from the outside, for specific business or educational purposes.It is not accessible to general public.Available over internetElectronic funds transfer (EFT)It is the electronic exchange or transfer of money from one account to another, either within a single financial institution or across multiple institutions, through computer-based systems i.e.; e-commerce.Integrated messaging systemsIt is the integration of different electronic messaging and communications media (e-mail, SMS, Fax, voicemail, video messaging, etc.) technologies into a single interface, accessible from a variety of different devices.Different organizations may integrate shared messages using this technology.Shared databasesDatabases can be shared between organizations for collective benefits.For example, National Health Informatics system integrate nation wide health database of patients. A patient may go to anywhere in the country for checkup. Previous history of medications and findings will be available to the doctors.Supply Chain ManagementIt is concerned with the supply of raw material, manufacturing of products and provide this to consumers.E-Commerce offers wide range of software solutions for online supply chain management.The Benefits of Electronic CommerceExpands the marketplace to national and international marketsDecreases the cost of creating, processing, distributing, storing and retrieving paper-based informationLowers telecommunications cost - the Internet is much cheaper than value added networks (VANs)Benefits to OrganizationsBenefits to CustomersEnables customers to shop or do other transactions 24 hours a day, all year round from almost any locationProvides customers with more choicesProvides customers with less expensive products and services by allowing them to shop in many places and conduct quick comparisonsAllows quick delivery of products and services in some cases, especially with digitized productsBenefits to SocietyEnables more individuals to work at home, and to do less traveling for shopping, resulting in less traffic on the roads, and lower air pollutionAllows some merchandise to be sold at lower prices benefiting the poor onesEnables people in under developed countries and rural areas to enjoy products and services which otherwise are not available to themFacilitates delivery of public services at a reduced cost,increases effectiveness, and/or improves quality E-Commerce LimitationsLack of sufficient system’s security, reliability, and standards.Insufficient telecommunication bandwidthCost of developing an E-Commerce Solutions is often very high.Often customers do not trust investing online.Many unresolved legal issues. Benefits of E-CommenceYou Do not need to stand in a line to pay bills any more!SummaryToday we have learnt,E-Commerce definitionDimensions of E-CommerceTypes of E-commerceE-MarketsTypes of inter organizational systemsBenefits of E-Commerce