Introduction to eCommerce

1. Introduction to eCommerce
Prakash G Khaire
The Mandvi Education Society Institute of Computer
Studies

2. Definition : eCommerce
E-commerce(e le ctro nic co m m e rce o r EC) is
thebuyingandsellingof goods andservices,
orthetransmittingof funds ordata, overan
electronic network, primarilytheinternet.

3. eCommerce

4. Features of eCommerce
• Non-Cash Payment − E-Commerce enables the use of
credit cards, debit cards, smart cards, electronic fund
transfer via bank's website, and other modes of electronics
payment.
• 24x7 Service availability − E-commerce automates the
business of enterprises and the way they provide services
to their customers. It is available anytime, anywhere.
• Advertising / Marketing − E-commerce increases the reach
of advertising of products and services of businesses. It
helps in better marketing management of
products/services.

5. Features of eCommerce
• Improved Sales − Using e-commerce, orders for the products can
be generated anytime, anywhere without any human intervention.
It gives a big boost to existing sales volumes.
• Support − E-commerce provides various ways to provide pre-sales
and post-sales assistance to provide better services to customers.
• Inventory Management − E-commerce automates inventory
management. Reports get generated instantly when required.
Product inventory management becomes very efficient and easy to
maintain.
• Communication improvement − E-commerce provides ways for
faster, efficient, reliable communication with customers and
partners.

6. Traditional Commerce eCommerce
Heavy dependency on information exchange
from person to person.
Information sharing is made easy via electronic
communication channels making little
dependency on person to person information
exchange.
Communication/ transaction are done in
synchronous way. Manual intervention is
required for each communication or
transaction.
Communication or transaction can be done in
asynchronous way. Electronics system
automatically handles when to pass
communication to required person or do the
transactions.
It is difficult to establish and maintain standard
practices in traditional commerce.
A uniform strategy can be easily established
and maintain in e-commerce.
Communications of business depends upon
individual skills.
In e-Commerce or Electronic Market, there is
no human intervention.

7. Traditional Commerce eCommerce
Communications of business depends upon
individual skills.
In e-Commerce or Electronic Market, there is
no human intervention.
Unavailability of a uniform platform as
traditional commerce depends heavily on
personal communication.
E-Commerce website provides user a platform
where al l information is available at one place.
No uniform platform for information sharing as
it depends heavily on personal communication.
E-Commerce provides a universal platform to
support commercial / business activities across
the globe.

8. Advantages to Organizations
• Using e-commerce, organizations can expand their market to national and
international markets with minimum capital investment. An organization can
easily locate more customers, best suppliers, and suitable business partners across
the globe.
• E-commerce helps organizations to reduce the cost to create process, distribute,
retrieve and manage the paper based information by digitizing the information.
• E-commerce improves the brand image of the company.
• E-commerce helps organization to provide better customer services.
• E-commerce helps to simplify the business processes and makes them faster and
efficient.
• E-commerce reduces the paper work.
• E-commerce increases the productivity of organizations. It supports "pull" type
supply management. In "pull" type supply management, a business process starts
when a request comes from a customer and it uses just-in-time manufacturing
way.

9. Advantages to Customers
• It provides 24x7 support. Customers can enquire about a product or service and
place orders anytime, anywhere from any location.
• E-commerce application provides users with more options and quicker delivery of
products.
• E-commerce application provides users with more options to compare and select
the cheaper and better options.
• A customer can put review comments about a product and can see what others
are buying, or see the review comments of other customers before making a final
purchase.
• E-commerce provides options of virtual auctions.
• It provides readily available information. A customer can see the relevant detailed
information within seconds, rather than waiting for days or weeks.
• E-Commerce increases the competition among organizations and as a result,
organizations provides substantial discounts to customers.

10. Advantages to Society
• Customers need not travel to shop a product, thus less
traffic on road and low air pollution.
• E-commerce helps in reducing the cost of products, so
less affluent people can also afford the products.
• E-commerce has enabled rural areas to access services
and products, which are otherwise not available to
them.
• E-commerce helps the government to deliver public
services such as healthcare, education, social services
at a reduced cost and in an improved manner.

11. Technical Disadvantages
• There can be lack of system security, reliability or standards owing to poor
implementation of e-commerce.
• The software development industry is still evolving and keeps changing
rapidly.
• In many countries, network bandwidth might cause an issue.
• Special types of web servers or other software might be required by the
vendor, setting the e-commerce environment apart from network servers.
• Sometimes, it becomes difficult to integrate an e-commerce software or
website with existing applications or databases.
• There could be software/hardware compatibility issues, as some e-
commerce software may be incompatible with some operating system or
any other component.

12. Non-Technical Disadvantages
• Initial cost − The cost of creating/building an e-commerce application in-
house may be very high. There could be delays in launching an e-
Commerce application due to mistakes, and lack of experience.
• User resistance − Users may not trust the site being an unknown faceless
seller. Such mistrust makes it difficult to convince traditional users to
switch from physical stores to online/virtual stores.
• Security/ Privacy − It is difficult to ensure the security or privacy on online
transactions.
• Lack of touch or feel of products during online shopping is a drawback.
• E-commerce applications are still evolving and changing rapidly.
• Internet access is still not cheaper and is inconvenient to use for many
potential customers, for example, those living in remote villages.

13. eCommerce Framework
• E-Commerce application will be built on the existing technology
infrastructure a myriad of computers, communication networks and
communication software
• Common business services for facilitating the buying and selling process
• Messaging & information distribution as a means of sending and
retrieving information
• Multimedia content & network publishing, for creating a product & a
means to communicate about it
• The information superhighway- the very foundation-for providing the high
way system along which all e-commerce must travel

14. eCommerce Framework

15. eCommerce Framework
• Any successful e-commerce will require the I-way infrastructure in the
same way that regular commerce needs the interstate highway network
to carry goods from point to point.
• Like toll-ways, revenues in ecommerce are based on vehicular traffic, in
our case, vehicles transporting information or multimedia content.
• Building the various highways is not enough. Transport vehicles are
needed, routing issues must be addressed, and of course the
transportation costs must be paid.
• In traditional transportation business, diesel engines or gasoline-powered
motors move the trucks along the roadways. On the I-way, messaging
software fulfills the role, in any number of forms email, EDI, or point to
point file transfers.

16. eCommerce Framework
• Encryption and authentication methods have been developed to ensure
security of the contents while travelling the I-way and at their destination
and numerous electronic payment schemes are being developed to
handle highly complex transactions with high reliability.
• In information traffic, public policy issues deal with the cost of accessing
information, regulation to protect consumers from fraud and to protect
their right to privacy and policing of global information traffic to detect
information pirating or pornography.
• Standards are crucial in the world of global e-commerce, to ensure noy
only seamless and harmonious integration across the transportation
network but access of information on any type od device the consumer
chooses.

17. Anatomy of eCommerce Applications

18. Multimedia Content for E-Commerce Applications
• Multimedia content can be considered
both fuel and traffic for electronic
commerce applications.
• The technical definition of multimedia is
the use of digital data in more than one
format, such as the combination of text,
audio, video, images, graphics,
numerical data, holograms, and
animations in a computer
file/document.
• Multimedia is associated with Hardware
components in different networks.
• The Accessing of multimedia content
depends on the hardware capabilities of
the customer.

19. Multimedia Storage Servers &
E-Commerce Applications:
• E-Commerce requires robust servers to store and distribute
large amounts of digital content to consumers.
• These Multimedia storage servers are large information
warehouses capable of handling various content, ranging
from books, newspapers, advertisement catalogs, movies,
games, & X-ray images.
• These servers, deriving their name because they serve
information upon request, must handle large-scale
distribution, guarantee security, & complete reliability

20. i. Client-Server Architecture in Electronic Commerce
• All e-commerce applications follow the client-server model
• Clients are devices plus software that request information from servers or interact
known as message passing
• Mainframe computing , which meant for “dump”
• The client server model, allows client to interact with server through request-reply
sequence governed by a paradigm known as message passing.
• The server manages application tasks, storage & security & provides scalability-
ability to add more clients and client devices (like Personal digital assistants to
Pc’s.

21. ii. Internal Processes of Multimedia Servers
• The internal processes involved in the storage, retrieval &
management of multimedia data objects are integral to e-
commerce applications.
• A multimedia server is a hardware & software combination
that converts raw data into usable information & then dishes
out.
• It captures, processes, manages, & delivers text, images,
audio & video.
• It must do to handle thousands of simultaneous users.
• Include high-end symmetric multiprocessors, clustered
architecture, and massive parallel systems.

22. iii. Video Servers & E-Commerce
• The electronic commerce applications related to digital video
will include
1. Telecommunicating and video conferencing
2. Geographical information systems that require storage &
navigation over maps
3. Corporate multimedia servers
4. Postproduction studios
5. Shopping kiosks.

23. iii. Video Servers & E-Commerce

24. Changing Business Environment
• The traditional business environment is changing rapidly
• Many companies are looking outside and within to shape business
strategies
• These activities include private electronic connections to
customers,suppliers,distributors,industry groups etc
• The I-superhighway will expand this trend so that it allow business to
exchange information.

25. E-Commerce and the retail Industry
• Conditions are changing in the “new economy” with respect to
the retail industry
• Consumers are demanding lower prices, better quality, a large
selection of in-season goods.
• Retailers are filling their order by slashing back-office costs,
reducing profit margins, reducing cycle times. buying more
wisely and making huge investments in technology
• Retailers are in the immediate line of fire and were first to bear
the brunt of cost cutting

26. Marketing and E-Commerce
• E-commerce is forcing companies to rethink the existing
ways of doing target marketing and even event marketing.
• Interactive marketing is in electronic markets via
interactive multimedia catalogs
• Users find moving images more appealing than still
image and listening more appealing than reading text on a
screen
• Consumer information services are a new type of catalog
business

27. Just-in-Time (JIT) Manufacturing
• It is viewed as an integrated management system consisting of
a number of different management practices dependent on the
characteristics of specific plants
• The first principle is elimination of all waste
(time,materials,labour & equipment)
• The following management practices are focused factory,
reduced set-up times, group technology, total productive
maintenance, multifunction employees, uniform workloads, IT
purchasing,kanban total quality control & quality circles

28. Quick Response Retailing (QR)
• It is a version of JIT purchasing tailored for retailing
• To reduce the risk of being of out of stock, retailers are
implementing QR systems
• It provides for a flexible response to product ordering and lowers
costly inventory levels
• QR retailing focuses on market responsiveness while maintaining
low levels of stocks
• It creates a closed loop consisting of retailer, vendor, & consumer
chain,& as consumers make purchases the vendor orders new
deliveries from the retailer through its computer network

30. Supply Chain Management
1. QR and JIT address only part of the overall picture
2. Supply Chain Management (SCM) is also called
“extending”, which means integrating the internal and
external partners on the supply and process chains to get
raw materials to the manufacturer and finished products
to the consumer
3. It includes following functions
 Supplier management: The goal is to reduce the number
of suppliers and get them to partners

31. • Inventory management: The goal is to shorten the order-ship-bill cycle. When a
majority of partners are electronically linked, information faxed or mailed
• Distribution management: The goal is to move documents (accurate data)
related to shipping
• Channel management: The goal is to quickly disseminate information about
changing operational conditions ( technical, product, and pricing information) to
trading partners
• Payment management: The goal is to link company and the suppliers and
distributors so that payments can be sent and received electronically
• Financial management: The goal is to enable global companies to manage their
money in various foreign exchange accounts
• Sales force productivity: The goal is to improve the communication flow of
information among the sales, customer & production functions