1/12/2016

Introduction to E-Commerce

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What is E-commerce?

Buying and selling of products or services

over electronic systems such as the Internet

and other computer networks

Online purchase of goods or services by

credit cards or PayPal

Buying and selling of goods and services,

and the transfer of funds, through digital

communications.

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What is E-Business ?

Utilization of information and communication

technologies (ICT) in support of all the

activities of business.

Electronic commerce focuses on the use of

ICT to enable the external activities and

relationships of the business with individuals,

groups and other businesses

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In practice, e-business is more than just e-commerce.

While e-business refers to more strategic focus with an emphasis on the functions that occur using electronic capabilities, e-commerce is a subset of an overall buying and selling strategy.

E-commerce seeks to add revenue streams using the World Wide Web or the Internet to build and enhance relationships with clients and partners and to improve efficiency

What is E-Business ?

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Difference between E-commerce

and E-Business

E-commerce covers the processes that touchcustomers, suppliers and external partners,including sales, marketing, order taking,delivery, customer service, purchasing of rawmaterials and supplies for production andprocurement of indirect operating-expenseitems, such as office supplies.

It involves new business models and thepotential to gain new revenue or lose someexisting revenue to new competitors.

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E-business includes e-commerce but alsocovers internal processes such asproduction, inventory management, productdevelopment, risk management, finance,knowledge management and humanresources.

E-business strategy is more complex, morefocused on internal processes, and aimed atcost savings and improvements in efficiency,productivity.

Difference between E-

commerce and E-Business

Why the Internet?

What do these technologies have in

common with the Internet?

Printing Media

Telephone

Automobile

Airplane

Over-night delivery

Fax machine

Mobile phone

Personal computer

Printed Material

Mass reproduction

Unknown audience

Wider geographical

area

One-way

communication

Telephone

Immediate

communication

Interactive two-way

communication

Wider geographical

area

Planes, Trains & Automobiles

Personal

communication

Wider geographical

base

Two-way

communication

Perception of above-

average service

Over-night Delivery

Provide immediate service

Create perception of customer care

JIT (Just-in-time)management systems

Federal Express

FAX

Immediate transfer of

written information

Above average service

One-way promotion

Closer to the customer

Cellular Phone

Mobility

Instant access to

customers

Above average

service

24 hour contact

Personal Computer

Faster service

Customer information

Data bases

Instant communication

What do they have in Common?

Wider distribution of information

Uniform information

Assist in marketing function of company

Most were interactive

Provide above average service

They all become standards in the industry

Internet

The Driving Forces of

Electronic Commerce

Business pressures

Organizational responses

The role of Information Technology (including

electronic commerce)

Electronic Commerce Terms

Business-to-business (B2B)

Businesses make online transactions purchases

with other business

Business-to-consumer (B2C)

Online transactions between businesses and

consumers

Consumer-to-Consumer (C2C)

Online auctions, posting to newspaper sites,

personal websites, e-commerce portals

Concepts and Characteristics

of B2B EC

How is B2B conducted?

Directly between buyer and seller

Via an online intermediary

With or without intermediaries

Types of transactions

Spot buying—determined by dynamic supply and

demand

Strategic sourcing—long term contracts

Business-to-Consumer (B2C)

E-Commerce

Convenience

Many goods and services are cheaper when

purchased via the Web

Comparison shopping

Disintermediation: elimination of intermediate

organizations between the producer and the

consumer

Consumer-to-Consumer (C2C)

E-Commerce

Often done through Web auction sites such as

eBay

Growth of C2C is responsible for reducing the

use of the classified pages of newspapers to

advertise and sell personal items

Electronic Commerce Terms

Pure vs. Partial EC: based on the degree of

digitization of

Product

Process

Delivery agent

Traditional commerce: all dimensions are physical

Pure EC: all dimensions are digital

Partial EC: all other possibilities include a mix of

digital and physical dimensions

The Dimensions of E-Commerce

E-Commerce Software

Content Management

Product configuration

Shopping cart facilities

E-commerce transaction processing

Web traffic data analysis

Electronic Shopping Cart

Electronic Payment Systems

Electronic cash

Electronic wallet

Credit card

Charge card

Debit card

Smart card

Benefits of E-Business

Expands the marketplace to national and international markets

Decreases the cost of creating, processing, distributing, storing and retrieving paper-based information

Benefits to Organizations

Benefits to Organizations

Supports business processes reengineering

(BPR) efforts

Lowers telecommunications cost - the Internet is

much cheaper than value-added networks (VANs)

Benefits to Customers

Enables customers to shop or do other transactions 24 hours a day, all year round from almost any location

Provides customers with more choices,freedom

Provides customers with less expensive products and services by allowing them to shop in many places and conduct quick comparisons

Benefits to Customers Customers can receive relevant and detailed

information in seconds, 24 hours a day.

Save time and money

Allows customers to interact with other customers

in electronic communities and exchange ideas as

well as compare experiences.

Electronic commerce facilitates competition,

which results in substantial discounts.

The Limitations of EC

Technical limitations of electronic commerce

Lack of sufficient system’s security, reliability,

standards, and communication protocols

Insufficient telecommunication bandwidth

The software development tools are still evolving

and changing rapidly

The Limitations of EC (cont.)

Difficulties in integrating the Internet and

electronic commerce software with some existing

applications and databases

The need for special Web servers and other

infrastructures, in addition to the network servers

(additional cost)

Non-Technical Limitations

Cost and justification

Security and Privacy

Lack of trust and user resistance

Non-Technical Limitations Security and Privacy

The EC industry has a very long and difficult task of convincing customers that online transactions and privacy are every secure

Lack of trust and user resistance

Customers do not trust:

Paperless transactions

Electronic money Switching from a physical to a virtual store may be difficult

Other limiting factors are

Many unresolved legal issues

Rapidly evolving and changing EC

Lack of support services

Insufficiently large enough number of sellers and buyers

Breakdown of human relationships

Expensive and/or inconvenient accessibility to the Internet

Key Technology Infrastructure

Components

Hardware

Storage capacity and computing power

required of the Web server depends on:

Software that will run on the server

Volume of e-commerce transactions

Website hosting

Web Server Software

Security and identification

Web sites must be designed to protect against

attacks

Denial-of-service (DOS) attack-is an attempt to

make a computer resource unavailable to its

intended users

Web site tracking

Web Server Software

(continued)

Web site development

Web page construction

Static Web page

Dynamic Web page

Problems to avoid while building an

ecommerce business

1. Customers are experiencing difficulties

when they want to pay

2. The buying process is very long

3. Your shopping cart is not offering plenty

payment options

4. Your buying confirmation process is

incomplete

5. Broken links

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Sri Lankan eCommerce sites

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