Introduction to E-Commerce 1/12/2016
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. 2
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 3
What is E-Business? 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 4
Difference between E-commerce and E-Business E-commerce covers the processes that touch customers, suppliers and external partners, including sales, marketing, order taking, delivery, customer service, purchasing of raw materials and supplies for production and procurement of indirect operating-expense items, such as office supplies. It involves new business models and the potential to gain new revenue or lose some existing revenue to new competitors. 5
Difference between E- commerce and E-Business E-business includes e-commerce but also covers internal processes such as production, inventory management, product development, risk management, finance, knowledge management and human resources. E-business strategy is more complex, more focused on internal processes, and aimed at cost savings and improvements in efficiency, productivity. 6
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 aboveaverage 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 Benefits to Organizations Expands the marketplace to national and international markets Decreases the cost of creating, processing, distributing, storing and retrieving paper-based information
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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