Introduction to E-Commerce

Defining E-Commerce

• E-commerce covers any form of business transaction or information exchange that is executed using any form of information and communications technology. This embraces business-to-business; business-to-consumer; and government-to-nation; as well as exchange of tools like the Internet and the World Wide Web, intranets, extranets, electronic mail and Electronic Data Interchange. (UK’s e-centre)

• Brief history of E-Commerce;

§ look at what drives E-Commerce;

§ look at the components of an E-Commerce system;

§ list the range of E-Commerce techniques; identifying them within different business contexts;

§ start to look at the impact of E-Commerce on the organisation.

• The application of advanced information technology to increase the effectiveness of the business relationships between trading partners. (Automotive Industry Action Group in North America)

• The enablement of a business vision supported by advanced information technology improves efficiency and effectiveness within the trading process. (E-Commerce Innovation Centre at Cardiff University)

The development of E-Commerce in the context of technological developments of the IT world today.

• As the current environment provides affordable, more powerful and user-friendly systems, this has promoted the need of a system as a tool provider for business.

• The development of EDI (Electronic Data Interchange) brought about data to transfer from one system to another. EDI was widely used in the 1980s and early 1990s. The latter developments were of the X.400 and the Internet.

Electronic commerce (E-commerce)

• The process of buying, selling, transferring, or exchanging products, services and/or information via computer networks, including the Internet

• The origins of e-commerce first started with innovations such as electronic fund transfer (EFT) in which funds could be routed electronically form one organisation to another

• Then came Electronic Data Interchange (EDI), a technology used to electronically transfer routine documents, which expanded electronic transfers from financial transactions to other types of transaction processing such as ordering

• EDI required having expensive dedicated and private lines between the trading parties

• Internet and WWW overcome the shortcomings of EDI

Electronic Business

• A broader definition of EC, includes not just the buying and selling of goods and services, but also servicing customers, collaborating with business partners, and conduction electronic transactions within an organisation.

Types of EC organisations

• Brick and mortar (old-economy) – perform most of their business off-line, selling physical products by means of physical agents

• Virtual organization/pure-play/click and order – conduct their business, activities solely online

• Click-and-mortar – conduct some e-commerce activities, but do their primary business in the physical world

World Wide Web

• Created in the early 1990s Tim Berners-Lee

• Software that allows users to exchange information as it was designed to help scientists share online information using a single, unified interface.

• Mid-1993, Marc Andressen, an undergraduate of University of Illinois, wrote a program called Mosaic, which made using the web as easy as pointing and clicking at pictures and underlined words

• Mosaic was the first graphical browser that was launched with 150 websites holding a few thousand web-pages.

• 1995 there were about 10,000 sites, a number that had grown to 4 - 5 m by mid-1999.

• Commercial use of the Internet has skyrocketed, with companies using the Internet to communicate with each other, with their customers, with their partners and with their suppliers.

Electronic markets

Classification of EC by the nature of the transactions / interactions:

1. Business-to-business (B2B) – all of the participants are businesses or other organizations e.g suppliers

2. Business-to-Consumer (B2C) / e-tailing – includes retail transactions of products and services from businesses to individual shoppers

3. Business-to-business-to-consumer (B2B2C) – a business provides some product or service to a client business that maintain its own customers

4. Consumer-to-business (C2B) – individuals who use the Internet to sell products or services to organisations, or individuals seek sellers to bid on products or services they need

5. Consumer-to-consumer (C2B) - consumers ell directly to other consumers

6. Peer-to-peer applications – technology that enables networked peer computers to share data and processing with each other directly, can be used in C2C, B2B, and B2C ecommerce

7. Mobile-commerce (m-commerce) – e-commerce transactions and activities conducted in a wireless environment

8. Intra-business EC – includes all internal organisational activities that involve the exchange of goods, services, or information among various units and individuals in an organisation

9. Location-based commerce (l-commerce) – m-commerce transactions targeted to individuals in specific locations, at specific times

10. Business-to-employees (B2E) – organisations deliver services, information or products to its individual employees

11. Collaborative commerce (c-commerce) – individuals or groups communicate or collaborate online

12. E-learning – online delivery of information for the purposes of training or education

13. Exchange-to-exchange (E2E) – electronic exchanges formally connect to one another for the purpose of exchanging information

14. E-government – a government entity buys or provides goods services, or information to businesses (G2B)or individual citizens (G2C)

Benefits

• · Global reach – expands the marketplace to national and international markets. With minimal capital outlay, a company can easily and quickly locate the best supplier, more customers, and the most suitable business partners worldwide.

• Cost reduction – decrease the cost of creating, processing, distributing, storing, and retrieving paper-based information.

• Supply chain Improvements – supply chain inefficiencies, such as excessive inventories and delivery delays can be minimized with EC.

• Extended hours – 24/7/365 the business always open on the Web, with no overtime or other extra costs.

Limitations

• costs of a technological solution

• some protocols are not standardized around the world

• reliability for certain processes

• insufficient telecommunications bandwidth

• software tools are not fixed but constantly evolving (ie. Netscape 3,4,4.7,4.75 etc.)

• integrating digital and non-digital sales and production information

• access limitations of dial-up, cable, ISDN, wireless

• some vendors require certain software to show features on their pages, which is not common in the standard browser used by the majority

• Difficulty in integrating e-Commerce infrastructure with current organizational IT systems