IDENTIFICATION OF VITAL FACTORS IN BUSINESS CONTINUITY PLANNING AND DISASTER RECOVERY FOR E-COMMERCE
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1 IDENTIFICATION OF VITAL FACTORS IN BUSINESS CONTINUITY PLANNING AND DISASTER RECOVERY FOR E-COMMERCE 1 PRIYANKA MALIK, 2 UTKARSH SINGH, 3 MADHAVENDRA MISRA 1,2 MBA-IT 4th semester IIIT-A, 3 Assistant Professor IIIT-A 1 imb @iiita.ac.in, 2 imb @iiita.ac.in, 3 madhvendra@iiita.ac.in Abstract- Growth opportunity is massive in e-commerce and investors are investing billions. This paper aims at exploring and establishing the possible factors that are critical to e-commerce, often leading to disasters. Although firms had business continuity and disaster recovery plans, yet cases of IT disasters appeared in recent past and still continue to happen. Data losses, technology failures, and other incidents are increasingly reported in the news. Eight recent IT disasters in e-commerce industry were studied. The vital factors were mapped with causative factors identified from the study of respective disasters. The most critical factors have been ranked on their vitality, while preparing business continuity and disaster recovery plan. Further a recommendation matrix, based on current compliances and practices, has been presented. This would help e-commerce firms prepare a more robust BCP/DRP. Index Terms- BCP, case study, content analysis, DRP, ecommerce, qualitative content analysis, qualitative research. I. INTRODUCTION A. Motivation Any business requires a proper channel to bridge the gap between its production/services and customers. Electronic commerce aims towards providing a virtual marketplace capable to handle and effectively represent different intermediaries like vendors, suppliers, warehouses, supply-chain etc. Flipkart s Big Billion Day was intended to be great day for its customers. But at the end of the day, Flipkart admitted that customer experience was less than pleasant. Also Sachin Bansal and Binny Bansal accepted that Flipkart did not live up to the promises made and ultimately apologised for price changes, out-of-stock issues, product cancellations and website issues [1]. Other credible firms that suffered recent disasters were Amazon, Screwfix, Mt. Gox, edreams, and NAT [2]. Mt. Gox, once the world's largest bitcoin exchange, even had to file for bankruptcy protection [3]. Understanding of the causal factors behind shortfalls, from the perspective of deceased e-commerce firms, is essential for enabling e-commerce firms, to carry on business efficiently and effectively with minimal downtime. This paper identifies and analyzes factors that are vital to cause disaster in an e-commerce firm, based on the recent disasters studied. B. Objectives 1. To study and analyze of eight recent e-commerce disasters. 2. To identify the causal factors with respect to each disaster. 3. Mapping identified vital factors with the disasters studied. 4. Analyzing significance of these identified vital factors, in causing an e-commerce disaster. 5. Preparing a recommendation matrix, considering the current practices and compliances. II. OVERVIEW OF E-COMMERCE A. Introduction to e-commerce Growth and availability of technology is aiding every industry today. Businesses like hospitality, apparel or banking today look forward for different ways to spread their wings and fly high in the open space of resources, accessibility, reach ability and growth. Business glitches and disasters cause unwanted disruptions. Impact of disaster can be reduced by creating backup copies of data and software, acquiring alternative technologies and developing ways of resuming services [4]. Service industries as well as product based industries in e-commerce need to have secure environment to avoid operational outrages in business. Developing an effective disaster recovery plan will help an organization protect them from data loss [5]. Considering frequent e-commerce disasters, BCP/DRP has become a strategy rather than just a practice. Dimensions of e-commerce that need to be considered, before preparing a DR plan for the same: 1. Capability of front end or application layer which interact with users. 2. Support system at back end or data layer which deals with processing, storage, up gradation etc. 3. Support synchronization from economic and human driven factors. E-commerce portals provide first point of contact where user interacts with virtual market and fulfill their transaction requirements. Meanwhile back end provides services and host of various offering in terms of technology to match the requirements of the business. Online business consists of offering product catalogue. However, ensuring efficient and effective transactions is significant, as it involves trust of clients, suppliers and distributors. The security issue of on-line payment is the bottleneck of the development of e-commerce [6]. This mind block restricts many users to develop a strong bond with the 19
2 virtual market place offerings, as compared to the traditional brick and mortar industry. B. Challenges of e-commerce According to a study reported by Statista on annual B2C e-commerce sales growth rate in India from 2012 to 2017, sales growth rate is declining gradually year after year as reported in Business remains unavailable until a fix is provided [10]. Studies have been conducted to formulate a framework to solve session reliability using simulation. It identified the factors and interactions that have statistically significant effect on session reliability. These findings indicate that session reliability, which accounts for the distribution of failed requests within sessions, provides better representation of the user perceived quality than the request-based reliability [11]. In order to provide an undisrupted business environment, analyzing and mapping causes and effect scenario created by IT disasters is significant. III. RESEARCH METHODOLOGY Fig 1: E-commerce sales growth rate from year 2012 to 2017 [7]. Following are the identified reasons, for e-commerce degradation: 1. According to the Forrester census analysis more than 54% of population lives in rural area, making difficult for e-commerce companies to provide connectivity there. Low internet penetration is one of the biggest challenges for e-commerce players. With only 245 million Internet users, India accounts for just 20% of Internet penetration. This is quite disappointing as the US and China both have more than 50% internet penetration [8]. 2. Low usage of debit and credit cards, considering that majority of purchases are made using cash on delivery. In 2013, out of 800 million transactions that were made online, only 53% were made using debit or credit cards. Users fear making payment online because of fraud in e-commerce. According to KPMG Report, India fraud survey Among different categories of fraud in e-commerce internet and cyber related fraud happened 71% times [9]. 3. Praveen Sengar, research director at Gartner, lamented over the fact that in spite of the rapid boom in the industry, it is still at a nascent stage. India represents a $3.5 billion market, growing at approximately percent every year. It represents less than 4 percent of the total retail market. B2C e-commerce leads the market in India, while B2B is limited to organizations that drive online channels to integrate with their partners and distributors. 4. IT related disaster in e-commerce in the past few years is also a major reason of lower growth rates. It is lowering value of e-commerce compared to traditional brick and mortar retailers. Disaster in e-commerce, apart from software and hardware failure, causes unavailability of service due to unprepared down time and human related errors. A. Data Collection The research is based on literature survey and secondary data analysis. We have used websites, e-newspapers and magazines to collect information of different e-commerce related disasters namely Amazon, edreams, Flipkart, Mt. Gox, NATS, RBS, screwfix and UK Border. Information on different compliance and standards relating to e-commerce are from ISO, OWASP, PCI DSS and IEC. B. Type of Research This paper contains applied and descriptive type of research methodology. In this research our aim was to find problems relating to ecommerce business disruptions and identify loopholes in the present practices. The central idea of doing this applied research is to find a solution for the identified practical problems of ecommerce and establishing the research finding towards developing a recommendation matrix for disaster free business. C. Research Framework Fig 2: Framework for our research work. IV. FACTOR IDENTIFICATION TOWARDS PROVIDING RESILIENT E-COMMERCE Prior to providing any solution or recommendation it is necessary to be aware of what made the problems happen. 20
3 A. Disaster Mapping To establish vital factors, the study has been conducted for the year 2014 pertaining to e-commerce Table I: Disaster Mapping. business disruptions. Aim was to create a cause-effect mapping of each of the eight disasters studied. 21
4 B. Causative Factor Categorization After studying each disaster as a case individually, we have identified causes and reasons for each of the eight disasters. Then we have categorized causes and reasons into five factors. These identified five factors have been considered as the universal set of factors for this study. Further we have mapped these factors with disasters for further analysis. Table II: Mapping of disasters and the causal factors. Table III: Normalized frequencies of the vital factors. We have kept the vitality threshold value as Therefore all factors having frequency equal to or greater than 0.25 have been considered as vital factor. V. RECOMMENDATION MATRIX OF IDENTIFIED VITAL FACTORS C. Vital Factor Establishment We have calculated the frequency of contribution of the vital factors towards causing the eight disasters, which we have considered to be universal set. For example, portal being the reason of 7 out of 8 disasters gets the highest frequency factor, Providing a resilient solution does not only protect the ethnicity of the system from all potential ecosystem based errors, outages and disruptions but also ensures the ability to make the system strong enough so that it can come back to its original functionality as soon as possible Table IV: Recommendation Matrix. 22
5 CONCLUSION In this study we have successfully established categories of factors which contributed towards recent ecommerce disasters. The recommendation matrix will provide a quick reference guide for all e-commerce organizations. This would assist in providing a seamless experience to their users and ensuring continuity to their businesses. In future this framework can be applied to other disaster causing factors e.g. human skill, business environment scanning, competitors analysis, brand image and natural disasters. REFERENCES [1] [2] ins-biggest-it-disasters-in-2014.html [3] [4] Mudholkar, P. K., Shanker, M., & Maitra, S., Protecting E-Business by implementing Business Continuity and Disaster Recovery Planning in the Banking Industry (Mudholkar, Shanker & Maitra, 2013). [5] Steve M. Hawkins, David C. Yen, David C. Chou, (2000) "Disaster recovery planning: a strategy for data security", Information Management & Computer Security, Vol. 8 Iss: 5, pp [6] Liu, J., Cheng, Q., Qin, Y., & Feng, L. (2014). Analysis and Solution for Virtual Personal Payment System of Online Banking. International Journal of U-& E-Service, Science & Technology, 7(3). [7] les-growth-in-india/ [8] dustry-2015-disppointing-slow-growth/ [9] pdf [10] Pertet, S., & Narasimhan, P. (2005). Causes of failure in web applications (cmu-pdl ). Parallel Data Laboratory, 48. [11] Janevski, N., & Goseva-Popstojanova, K. (2013). Session reliability of web systems under heavy-tailed workloads: an approach based on design and analysis of experiments. IEEE Transactions on Software Engineering, (8), [12] s/bigbillionday-gets-flipkart-millions-of-unhappy-customers/ #sthash.nn6fdf0z.dpuf [13] -slashed-to-1p-during-the-amazon-price-glitch [14] ch-prices-penny-repricerexpress [15] [16] [17] [18] port-chaos-computer-failure-nats-heathrow-gatwick-airspace [19] [20] [21] west-ulster-final-notice.pdf [22] [23] PRU.99 23
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