Convergence
The growth of the Internet, computer telephony, electronic banking, interactive media services, mobile communications and related technologies, has paved the way for a new global network to emerge in the twenty-first century, subsuming the Internet and telephone networks.
Where in the twentieth century we had separate devices and transmission technologies for each communications function, nearly all data is now transmitted digitally, and there is increasing convergence between the devices used to connect to digital networks.
Mobile Communications
The voice and data communications industry is working to forge new technologies and standards to support mobile E-Commerce. These efforts are focusing on two key areas:
accessing information and services via the Internet from a phone other handheld device;
providing the necessary bandwidth to handle content in the fastest and most reliable way.
Product Code Technology
Some supermarkets, such as UK retailer Safeway, have already introduced do-it-yourself scanning to take the pressure off tills. Shoppers can:
- pick up a hand-held scanner on entering the supermarket;
- use it to monitor how much they are spending as they go along;
- print out an invoice when they have finished.
Content Providers
The global network’s content may increasingly be provided by media giants, providing entertainment, news and sports and there is likely to be a great deal of crossover with the retail sector, as consumers shopping for entertainment are persuaded to shop for other things.
Interactive TV
One of the big developments of the last few years has been the introduction of digital television, which in addition to providing a digital image has facilitated a range of interactive services, including:
- the provision of online programme information;
- interactive games on the television;
- the provision of pay-per-view programmes, such as big sporting events or recent films;
- the provision of online shopping services;
- an email service via your television.
All these services can be accessed using your remote control, although a special wireless ‘qwerty’ keyboard has also been developed to make use of the services easier.
Electronic Cash and Banking
Online banks are already appearing on the Internet, and established banks are having to adapt for the future. It has been possible for a while to manage your banking from software on a PC, but these types of facility are becoming enhanced and integrated with the emergent mobile technologies.
Voice Recognition and Disabled Access
Voice control is likely to become a viable alternative for Internet access as well as the control of domestic appliances.
Computer Telephony
By merging computer and telephone technologies, Computer Telephony Integration (CTI) can change the way we do business. Call centres and automated call reception are just the tip of the iceberg – CTI technology can be merged with Internet and web systems to create a customer interface.
Voice over IP (VoIP)
Voice over IP (VoIP) is voice delivered using the Internet protocol. This means sending voice information in digital form in discrete packets rather than in the traditional circuit-committed protocols of the Public Switched Telephone Network (PSTN). VoIP and Internet telephony avoid ordinary telephone charges.
In this section we will examine the fulfillment process in terms of:
- Integrating online orders with back office systems;
- Distribution channels;
- Dispatch;
- Delivery;
- Handling customer returns.
Outsourcing the Fulfillment
As online sales move past the experimental phase, several factors combine to put new pressures on order fulfillment systems. These include:
- An expanded selection of products sold online;
- The need to move a large volume of small parcels;
- Rising customer expectations.
Activity
Retailers find that it’s relatively easy to distribute products in bulk through a wholesale, retailer, or distribution channel as compared to eCommerce distribution. However, difficulties can emerge when a company has many individual products that require distribution to the customer’s home, inventory control, and customer support.
Meeting Customer Expectations
There are a number of things that can be done to ensure that the fulfilment process provides a satisfactory conclusion to the whole purchasing cycle, including:
- Processing all orders at a line item level, so that each individual item ordered is clearly identified. This is particularly important where a multi-item order is placed and one or two of these are out of stock;
- Personalising orders so that the customer feels that full account has been taken of their individual needs. Specifying the actual name of the customer to whom the order should be delivered is particularly important in situations where it is being delivered to a business, otherwise it can be left lying around for days in reception waiting for the right person to come and collect it;
- Tracking the status of the order means that any customer enquiry can be resolved promptly and efficiently. Equally important is the fact that formal tracking of progress ensures that any problems arising out of non-delivery of the order are quickly identified and remedied;
- Communicating the order status to the customer is an excellent way of ensuring that they are kept fully informed of progress.
Payment
Irrespective of the payment mechanism used, there are four key factors to consider at the outset when reviewing the possible options. These are:
- Acceptability: the payment system selected must be widely accepted by, and acceptable to merchants, thereby ensuring that the sale is processed without delay;
- Ease of integration: the website interface that is used by the user to input the payment details must be effective and integrated into the total network environment;
- Customer base: there must be enough users of the chosen payment system, and enough subsequent traffic, to justify the investment;
- Ease of use and ease of access: the payment system should be as easy to use and understand as possible, so that it caters for all potential levels of users.
Payment Options
- Shopping Cart and Payment Software
- Writing Your Own Interface
- Merchant Services
- Third Party Merchant Services
- Digital Cash
- Ecash
- Micropayments
- Purchasing Cards
- eCheques
- PayPal
E-payment methods:
1. Electronic payment cards (credit, debit, charge)
2. Virtual credit card
3. E-wallets ( or e-purse)
4. Smart cards
5. Electronic cash
6. Wireless payments
7. Stored-value card payments
8. Loyalty cards
9. Person-to-person payment methods
10. Payments made electronically at kiosks
Other method used primarily for B2B payments:
1. Electronic checks
2. Purchasing cards
3. Electronic letter of credit
4. Electronic funds transfer (EFT)
5. Electronic benefits transfer (EBT)
6. E-lines of credit
Applications of smart card
1. Loyalty cards
2. Financial applications
3. Information technology cards
4. Health and social welfare information cards
5. Transportation
6. Identification
Customer Confidence
One of the major problems that eCommerce has encountered in terms of end-user acceptance is the perception that many sites are insecure and the credit card detail of their customers are likely to be intercepted by hackers.
Analysing website Visitors
When used effectively, site analysis software can provide you with valuable information about who is visiting your website and what pages they are viewing when they are there. Examples of the type of information that can be provided include:
- The sections of your site they are visiting;
- How long they stay on each individual page or in each section;
- The way that they navigate around your site;
- How they actually found your site.
Personalization
One of the great strengths of the Internet is the way in which it allows for the personalization of marketing techniques, so that the marketing message actually addresses individual needs. This is frequently referred to as one-to-one marketing. The concept relies on gathering information about the customer so that the right message can be sent at the right time to match their identified requirements.
This can be done via any of the following three options:
- Log files
- Forms
- Cookies
Customer Relationship Management
CRM is an information industry term for the overall strategy, incorporating methodologies, software, and Internet capabilities, which help a company, manage customer relationships in an organized way.
Customer Satisfaction
Recent research indicates that the following things can result in serious customer dissatisfaction:
1. The product they were trying to buy was out of stock – serious thought should be given to the levels of stock to hold. However, if an item is unavailable then the website should certainly inform the customers that this is so.
2. The purchased item wasn’t delivered on time – the key here is not to make delivery promises that can’t be met. It also highlights the need for the E-Commerce provider to work closely with any distribution company that they may use.
3. Delivery cost was too high – some E-Commerce providers entice customers by offering very low product prices and then look to claw back some of the margin by charging high delivery costs. This point confirms that such a practice should be avoided.
4. Connection trouble – the E-Commerce business should ensure that there is enough capacity to serve large volumes of customers at peak times. Nevertheless there are times when such problems may be related to the customer end and to general network congestion on the Internet.
5. Didn’t get a confirmation or status report – the order confirmation should be generated automatically after the order is received in the order database. Customers of all businesses expect to receive order and credit card confirmation..
E-Marketing
Marketing is the effort of promoting goods and services and trying to sell them. It’s about trying to draw attention to your company’s products and services, to convince people to purchase them, and to turn first time purchasers into repeat purchasers.
The tools and techniques available to promote your website and products include:
- Online marketing tools;
- Search engine;
- Email promotion;
- Offline marketing activities.
All of these have a role to play and the optimum solution will probably employ a mix of them.
Domain names
Domain names are an enormous help in the branding of a company. Your domain name should be easy to remember, easy to spell, and should represent what your company is all about. If it is not found or remembered quickly, then potential customers will surf elsewhere and possibly find your competition. So it is essential to spend some time choosing the domain name that really reflects the business.
Getting the right domain name is also important in terms of branding the company. Research has shown that Internet users are busy and prefer to use a known brand as a short cut to obtain the goods and services they want as quickly as possible. Good brand names suggest something about the product and should help differentiate the product from competitors. The domain name should help to reinforce the brand and should, ideally, be short, memorable and easy to spell.
Online Marketing
There are a range of different tools and techniques available to enable you to undertake online marketing campaigns. Some of the most common that we will review in this section are:
- Banner adverts;
- Affiliate programs;
- Viral marketing;
- Exploiting newsgroups.
Search Engines
A search engine indexes pages automatically by using software known as spiders that explore the web and collect keyword information, which they store in huge databases. They potentially give a higher ranking to websites which have taken into consideration the needs of search engines in their structure and content;
Email Marketing
Email is the online equivalent of direct mail advertising. However email has at least three significant advantages over direct mail:
- There are no postal charges;
- It can easily provide more detailed information by directing recipients to the corporate website;
- It can be automatically individualized for specific users.
Marketing Overseas
The Internet offers companies large and small the opportunity to trade and compete in a global marketplace. However, before considering how to promote your offerings in other countries you need to have considered a variety of issues including logistics, trade laws, customs requirements, taxes, accepting payments etc.
Offline Marketing
Just as with online marketing, the goal of offline marketing is to attract visitors to your website. However, in this instance, there is not the scope for providing automatic hyperlinks that will direct visitors seamlessly to the site.
So, the focus of offline marketing has to be very firmly on promoting your web address. By highlighting the products and services you offer or the quality of the content, you are seeking to encourage the web user to log-on and type in your URL.
A major element of your offline marketing activity, therefore, is to incorporate your URL in all of your customer-facing literature. The URL should appear with just the same frequency as your company address and telephone number. Examples include:
- Letterheads;
- Business cards;
- Company brochures;
- Sales proposals;
- Details on the side of your company vehicles.
Building the Business Case
Just as with a business-to-business solution, a business case must be built before embarking on an implementation, which means:
- understanding your objectives;
- understanding the business model;
- balancing costs against profits.
In assessing the cost-effectiveness of a business-to-consumer application it is useful to make the distinction between:
- existing businesses taking advantage of the web;
- small-time entrepreneurs seeing an sales opportunity and setting up a small shop front;
- and new Internet start-up companies with innovative ideas.
Designing and Running an E-Commerce website
This section will cover some of the same ground as the ‘Developing a website’ unit, but will be much more oriented to E-Commerce issues.
Domain Names and Trade Marks
When you register a domain name, it is associated with the server on the Internet you designate during the period the registration is in effect. The domain name consists of the name (e.g. ‘mcdonalds’), followed by a suffix of one or more labels indicating the type and origin of the domain (e.g. .com or .co.uk).
Introduction
The growth in the number of Internet users worldwide almost seems to have been matched by the number of innovative ways that have emerged for conducting electronic commerce over the Internet. Having a virtual presence not only minimizes (or indeed removes) the need for physical (and expensive) shop fronts, it also dramatically expands your potential customer base. A number of models for business-to-consumer
E-Commerce have emerged, and are outlined below. It should be remembered, however, that the potential is as broad as the human imagination. It should also be remembered that this is a very young market and that not all models are yet proven to make money – some are existing on market expectation.
Models for E-Commerce
Sales
The most obvious commercial use of the World Wide Web (WWW) was to use it as a shop window enabling people from all over the world to come and view your products and services. As confidence in the medium grew the potential for actually selling goods and taking money via websites became a reality. This sort of business originally flourished in the United States (which has a credit card culture) long before it did in the rest of the world and it is certainly the most common form of business-to- consumer
E-Commerce now in practice.
There are three routes into having an online sales presence:
- buying space on an internet ‘shopping mall’ and letting someone manage the service for you;
- buying an off-the-shelf shopfront/catalogue software package;
- building a system from scratch.
Interactive Options
There are a host of features available to today’s web designer now that browsing technology (and what it can support) has become more stable. These broaden the scope of how visitors can make use of a site, and therefore strengthen the E-Commerce solution. They empower the visitor to find out all the information they need before purchasing something – whether that be directly through information or from peer review.
Options include:
- password protected areas;
- chat rooms;
- bulletin boards/newsgroups;
- catalogues;
- credit card transactions.
Security
SSL vs SET
Confidentiality, Authentication, Integrity, Non-repudiation.
The business considerations behind the development of B2B e-commerce
Assessing your Businesses Requirements
- Analysing the Information Flow
- Assessing Relationships with Trading Partners
- Reaching your Customer/End Consumer
- Expanding Your Business
The Business Case
- How to Calculate the Business Case
- Working in Tandem with Trading Partners
- Anticipated Costs
- Anticipated Benefits
- Anticipated Disruption During Implementation
- Planning for Future Developments
Project Management
- Internal Staff or External Consultants?
- A Multidisciplinary Team
- Project management
- Senior management
- Administration
- Finance
- Information technology
- Communications
- Marketing and sales
E-Commerce standards for both general and specific e-commerce applications.
Messaging Option
E-Commerce standards for both general and specific e-commerce applications.
• Fax Metaphor
• Email
• Value Added Networks - VANs
• X.400
• Electronic Faxes
• Voice Messaging
• Network Telephony (NCC: page. 49 - 50)
Internet Option
• A Brief History of the Internet
• The Internet began with ARPANET – a WAN started by the US Department of Defense for research into networking in 1969. One of the aims was to provide a way of connecting communications and intelligence centres in a robust way, so that if one was destroyed in war, or simply suffered machine failure, information could be automatically routed around the hole in the network.
• Many people contributed to the standards for communications protocols which made the network function. Researchers wrote their proposals in a paper called a ‘Request for Comments’ (RFC), and published it on the new medium itself. The first RFC (RFC0001) was written on 7 April 1969 and there are now well over 2000 RFCs.
• ARPANET was opened to non-military users later in the 1970s, primarily big universities – although at this stage it was still a research tool also used for file transfer and primitive email. The network started to expand internationally around 1972.
• It was not until the early to mid-1980s that the services we use most now started appearing on the Internet. Prior to 1984, all Internet addresses were strings of numbers (IP addresses). The mechanism by which servers are given names (e.g. ibm.com) was then introduced and email and other protocols followed. For example, RFC-822 describes the format for email headers.
• HTTP (Hyper-Text-Transfer-Protocol), the underlying mechanism of the World Wide Web was not invented until 1989, by Tim Berners-Lee. He was a physicist working at CERN, the European Particle Physics Laboratory, and wanted a way for physicists to share information about their research. Initially the web was text only, and web browsers were also editors, so people could work on each other’s documents.
o Graphics came later with a browser called NCSA Mosaic. The start-up company Netscape improved on this and the number of users grew dramatically with their free trial versions of their browser. Over 80% of web users were using Netscape’s product.
o The graphical interface, combined with advances in modem technology and growth in the number of ISPs opened up the Internet to vast numbers of novice users. Prior to this, home computer users were largely limited to using ‘bulletin boards’ which has their own proprietary interface. Companies like AOL and Compuserve, impressed with the rapid growth of the web, and fearful of being left behind, connected their networks to the Internet and offered their existing users access.
o Microsoft all but abandoned its own content network MSN and rapidly embraced the Internet, incorporating its own browser (Internet Explorer) into its Windows operating system
As all modern telephone exchanges transmit data digitally anyway, why do we need modems at all? This is because the connection between the home or office and the local exchange is still typically by analogue signals along copper wires. This is called the 'subscriber loop'. ISDN (Integrated Services Digital Network) removes the need for a modem by replacing this last analogue link by a digital one.
Conventional telephone equipment will not work with an ISDN line without a special terminal adapter (TA).
ISDN telephones provide a much clearer voice signal and dialling is much faster. PCs equipped with a TA card can connect to the Internet, or another PC, in a fraction of a second and data transmission is faster than the best modems (64 or 128 Kbits/s). ISDN is available as basic rate (equivalent to the capacity of two phone lines or 128 Kbits/s) for domestic or small office use, or primary rate, which gives an aggregate bandwidth of over 2 Mbits/s in Europe. North American ISDN offers slightly different configurations and bandwidth.
ISDN has all sorts of applications in the world of eCommerce - its use really is dependent on the type of solution being looked at. A real-life example is its use to connect a remote (perhaps home) office to a main office computer network so that an executive can work remotely but have all the benefits of being in the main office. However, one of the drawbacks to using ISDN is that it is still essentially a dial-up service, and each channel is charged at normal telephone rates. So using both channels becomes quite expensive.
Broadband
The explosive growth in the numbers of business people working remotely from their head office (often in offices at home) coupled with the slower than expected take-up of ISDN has resulted in the demand for new services to provide faster Internet connections at more competitive rates.
Broadband services are based on a variety of transmission technologies:
• DSL (Digital Subscriber Line) services, that make use of existing telephony infrastructure;
• Cable Modem services, that make use of cable TV infrastructure;
• Metropolitan Area Ethernet services, that generally require the installation of new cable infrastructure, often based on fibre optic cabling, although some variants of this technology make use of DSL technology.
ADSL
The most common DSL service available is the ADSL service. The 'A' stands for 'Asymmetric', which means that the data transfer rates are not the same in both directions. The transmission rate from the subscriber to the Internet is lower than in the reverse direction; the idea here is that downloading large web pages will account for a high proportion of the use, whereas the volume of data that needs to be transmitted from the user to the network is generally smaller.
The data rates available with ADSL, and in fact the actual availability of ADSL, depend critically on the distance between the subscriber and the nearest digital telephone exchange, and also on the number of subscribers that are using the service. Typically the service offers up to 500 Kilobits/second for downloads, and up to 250 Kilobits/second for uploads. So, unlike leased lines, ADSL gives no guarantees as to the actual transmission rates that will be made available.
Cable Modems
The Cable Modem services offered by the cable TV companies are only available in those areas already served by a cable TV network. The data transmission rates available with these services are similar to ADSL, and as with ADSL, the number of subscribers sharing the infrastructure affects the transmission rates that are actually delivered. With both ADSL and Cable Modem services, it is a simple matter to connect the cable modem or the ADSL filter into an existing LAN, allowing the external Internet connection to be accessed by all of the PCs connected to the LAN. A router is used to achieve this. One side of the router connects to the LAN, and the other side to the cable modem or the ADSL filter.
Metropolitan Area Ethernet services
Where significantly higher data transmission rates are needed, Metropolitan Area Ethernet services are emerging that will allow data rates of up to 10 Gigabits/second to be achieved between the customer premises and the service provider, if suitable fibre optic cabling is available (or can be installed) in order to make this possible. This kind of approach might be used in order to allow a large company that was spread across a number of sites to interconnect their LANs, making them look like one single LAN from the point of view of the users.
Leased Lines
Telecoms operators offer a variety of options for permanent connections for data transmission. These include ISDN, but also higher capacity dedicated links and variable bandwidth links, where capacity is shared with other users. Connections are also available from 'network providers', companies which have private network capacity who lease some or all of their capacity from telecoms companies. Leased lines may be used to connect LANs into a WAN (e.g. head office to a branch) or for teleconferencing.
Wireless Networking
The majority of networking installations to date have been based on fixed cabling of one kind or another, from coaxial cables to twisted pair cabling and optical fibre. The problem with cable-based networking infrastructures is just that - they are cable-based, and so every device that needs to connect to the LAN has to have a cable trailing from it. Two relatively new networking technologies aim to change the way we think about constructing and using LAN installations:
• 802.11 Wireless LANs, sometimes known as 'Wi-Fi' (an adaption of the popular home entertainment term 'Hi-Fi');
• Bluetooth.
Wireless LAN
A wireless LAN, as the name implies, offers a wireless connection between a computer system and the LAN, via a wireless access point. The data transmission rates that can be achieved are relatively low when compared to the performance of the early 10 Megabits/second Ethernet LANs, but are more than adequate for connecting the average PC or laptop to a LAN, unless applications that demand high data rates are being used.
Wireless access points generally have an Ethernet port that allows them to be connected to a conventional wired LAN backbone, but for small business use, it is possible to network a number of PCs together using only a wireless access point.
Connecting a PC or laptop to the wireless LAN involves the use of a wireless LAN interface that will slot into the PCMCIA socket of a laptop, or plugs into a USB socket of a desktop PC. Increasingly, modern laptop computers are being manufactured with inbuilt wireless LAN capability, in anticipation that they will be used in this way. Assuming that the security features of the technology have been correctly set up, the wireless 'connection' between the computer and the wireless access point is established automatically when the two devices are within radio range. The range of transmission is variable, depending on the construction of the building that it is used in, but can cover distances of up to 100 metres under the right conditions. If it is necessary to use more than one wireless access point to achieve the necessary coverage within a building, a wireless-enabled PC will automatically connect to the access point that offers the best signal.
Bluetooth
Bluetooth is a technology that was originally conceived as a means of replacing the cables between a computer and its peripherals - for example, printers, scanners, and so on. The data transfer rates that it can achieve are adequate for this kind of use, but not for connecting a PC to a LAN. It is now starting to appear in conjunction with other kinds of devices as well - for example, to connect a palmtop computer to a host PC, or to connect a hands free kit to a mobile phone. The transmission range for Bluetooth is significantly shorter - tens rather than hundreds of metres, and as less power is needed to drive the radios in Bluetooth devices, this technology is more appropriate than Wi-Fi for use in smaller, low power devices.
Introduction
The growth in the number of Internet users worldwide almost seems to have been matched by the number of innovative ways that have emerged for conducting electronic commerce over the Internet. Having a virtual presence not only minimizes (or indeed removes) the need for physical (and expensive) shop fronts, it also dramatically expands your potential customer base. A number of models for business-to-consumer
E-Commerce have emerged, and are outlined below. It should be remembered, however, that the potential is as broad as the human imagination. It should also be remembered that this is a very young market and that not all models are yet proven to make money – some are existing on market expectation.
Models for E-Commerce
The most obvious commercial use of the World Wide Web (WWW) was to use it as a shop window enabling people from all over the world to come and view your products and services. As confidence in the medium grew the potential for actually selling goods and taking money via websites became a reality. This sort of business originally flourished in the United States (which has a credit card culture) long before it did in the rest of the world and it is certainly the most common form of business-to- consumer
E-Commerce now in practice.
There are three routes into having an online sales presence:
- buying space on an internet ‘shopping mall’ and letting someone manage the service for you;
- buying an off-the-shelf shopfront/catalogue software package;
- building a system from scratch.
Interactive Options
There are a host of features available to today’s web designer now that browsing technology (and what it can support) has become more stable. These broaden the scope of how visitors can make use of a site, and therefore strengthen the E-Commerce solution. They empower the visitor to find out all the information they need before purchasing something – whether that be directly through information or from peer review.
Options include:
- password protected areas;
- chat rooms;
- bulletin boards/newsgroups;
- catalogues;
- credit card transactions.
Security
SSL vs SET
Confidentiality, Authentication, Integrity, Non-repudiation.
Assessing your Businesses Requirements
- Analysing the Information Flow
- Assessing Relationships with Trading Partners
- Reaching your Customer/End Consumer
- Expanding Your Business
- How to Calculate the Business Case
- Working in Tandem with Trading Partners
- Anticipated Costs
- Anticipated Benefits
- Anticipated Disruption During Implementation
- Planning for Future Developments
Project Management
- Internal Staff or External Consultants?
- A Multidisciplinary Team
- Project management
- Senior management
- Administration
- Finance
- Information technology
- Communications
- Marketing and sales
Internet Option Introduction
This session will provide an overview of business-to-business and supply chain E-Commerce, outlining the business issues to be considered when implementing an E-Commerce solution.
E-Commerce Tools
Electronic Data Interchange (EDI)
EDI was developed to eradicate the need for re-keying in data, using agreed standards to enable computers to exchange electronic versions standard forms (such as purchase orders and invoices). National, international and industry specific standards exist.
- Batch EDI
- Financial EDI
- Interactive EDI
- Hybrid EDI
- Form-based EDI
Software
EDI software fulfils the following functions:
- data extraction;
- data encoding;
- data transmission;
- data receipt;
- data decoding;
- data insertion.
There may be a separate piece of software for each function, but it is more likely that one or two integrated applications will manage them.
The Impact on the Supply Chain
Much of what has been presented so far has been presented in the context of straight business-to-business trading relationships, and this may have disguised the considerable effect that E-Commerce has had on the supply chain.
The supply chain is the mechanism by which goods are moved between:
- suppliers of raw materials;
- manufacturers;
- wholesalers;
- retailers;
- finally to the end consumer.
It can involve a vastly complicated set of trading relationships and have equally complicated logistics implications
Impact of E-Commerce on Supply Chain Management
E-commerce impacts supply chain management in a variety of key ways. These
include:
Cost efficiency: E-commerce allows transportation companies of all sizes to exchange cargo documents electronically over the Internet. E-commerce enables shippers, freight forwarders and trucking firms to streamline document handling without the monetary and time investment required by the traditional document delivery systems. By using e-commerce, companies can reduce costs, improve data accuracy, streamline business processes, accelerate business cycles, and enhance customer service. Ocean carriers and their trading partners can exchange bill of lading instructions, freight invoices, container status messages, motor carrier shipment instructions, and other documents with increased accuracy and efficiency by eliminating the need to re-key or reformat documents. The only tools needed to take advantage of this solution are a personal computer and an Internet browser.
Changes in the distribution system: E-commerce will give businesses more flexibility
in managing the increasingly complex movement of products and information
between businesses, their suppliers and customers. E-commerce will close the link
between customers and distribution centers. Customers can manage the increasingly
complex movement of products and information through the supply chain.
Customer orientation: E-commerce is a vital link in the support of logistics and transportation services for both internal and external customers. E-commerce will help companies deliver better services to their customers, accelerate the growth of the e-commerce initiatives that are critical to their business, and lower their operating costs. Using the Internet for e-commerce will allow customers to access rate information, place delivery orders, track shipments and pay freight bills.
E-commerce makes it easier for customers to do business with companies: Anything that simplifies the process of arranging transportation services will help build companies' business and enhance shareholder value. By making more information available about the commercial side of companies, businesses will make their web site a place where customers will not only get detailed information about the services the company offers, but also where they can actually conduct business with the company.
Ultimately, web sites can provide a universal, self-service system for customers. Shippers can order any service and access the information they need to conduct business with transportation companies exclusively online. E-commerce functions are taking companies a substantial step forward by providing customers with a faster and easier way to do business with them.
Shipment tracking: E-commerce will allow users to establish an account and obtain real-time information about cargo shipments. They may also create and submit bills of lading, place a cargo order, analyze charges, submit a freight claim, and carry out many other functions. In addition, e-commerce allows customers to track shipments down to the individual product and perform other supply chain management and decision support functions. The application uses encryption technology to secure business transactions.
Shipping notice: E-commerce can help automate the receiving process by electronically transmitting a packing list ahead of the shipment. It also allows companies to record the relevant details of each pallet, parcel, and item being shipped.
Freight auditing: This will ensure that each freight bill is efficiently reviewed for accuracy. The result is a greatly reduced risk of overpayment, and the elimination of countless hours of paperwork, or the need for a third-party auditing firm. By intercepting duplicate billings and incorrect charges, a significant percent of shipping costs will be recovered. In addition, carrier comparison and assignment allows for instant access to a database containing the latest rates, discounts, and allowances for most major carriers, thus eliminating the need for unwieldy charts and tables.
Shipping Documentation and Labeling: There will be less need for manual intervention because standard bills of lading, shipping labels, and carrier manifests will be automatically produced; this includes even the specialized export documentation required for overseas shipments. Paperwork is significantly reduced and the shipping department will therefore be more efficient.
E-Commerce standards for both general and specific e-commerce applications.
Messaging Option
- E-Commerce standards for both general and specific e-commerce applications.
Fax Metaphor
- Email
- Value Added Networks - VANs
- X.400
- Electronic Faxes
- Voice Messaging
- Network Telephony (NCC: page. 49 - 50)
Internet Option
- A Brief History of the Internet
- The Internet began with ARPANET – a WAN started by the US Department of Defense for research into networking in 1969. One of the aims was to provide a way of connecting communications and intelligence centres in a robust way, so that if one was destroyed in war, or simply suffered machine failure, information could be automatically routed around the hole in the network.
- Many people contributed to the standards for communications protocols which made the network function. Researchers wrote their proposals in a paper called a ‘Request for Comments’ (RFC), and published it on the new medium itself. The first RFC (RFC0001) was written on 7 April 1969 and there are now well over 2000 RFCs.
- ARPANET was opened to non-military users later in the 1970s, primarily big universities – although at this stage it was still a research tool also used for file transfer and primitive email. The network started to expand internationally around 1972.
- It was not until the early to mid-1980s that the services we use most now started appearing on the Internet. Prior to 1984, all Internet addresses were strings of numbers (IP addresses). The mechanism by which servers are given names (e.g. ibm.com) was then introduced and email and other protocols followed. For example, RFC-822 describes the format for email headers.
- HTTP (Hyper-Text-Transfer-Protocol), the underlying mechanism of the World Wide Web was not invented until 1989, by Tim Berners-Lee. He was a physicist working at CERN, the European Particle Physics Laboratory, and wanted a way for physicists to share information about their research. Initially the web was text only, and web browsers were also editors, so people could work on each other’s documents.
- Graphics came later with a browser called NCSA Mosaic. The start-up company Netscape improved on this and the number of users grew dramatically with their free trial versions of their browser. Over 80% of web users were using Netscape’s product.
- The graphical interface, combined with advances in modem technology and growth in the number of ISPs opened up the Internet to vast numbers of novice users. Prior to this, home computer users were largely limited to using ‘bulletin boards’ which has their own proprietary interface. Companies like AOL and Compuserve, impressed with the rapid growth of the web, and fearful of being left behind, connected their networks to the Internet and offered their existing users access.
- Microsoft all but abandoned its own content network MSN and rapidly embraced the Internet, incorporating its own browser (Internet Explorer) into its Windows operating system
ISDN (Integrated Services Digital Network)
As all modern telephone exchanges transmit data digitally anyway, why do we need modems at all? This is because the connection between the home or office and the local exchange is still typically by analogue signals along copper wires. This is called the 'subscriber loop'. ISDN (Integrated Services Digital Network) removes the need for a modem by replacing this last analogue link by a digital one.
Conventional telephone equipment will not work with an ISDN line without a special terminal adapter (TA).
ISDN telephones provide a much clearer voice signal and dialling is much faster. PCs equipped with a TA card can connect to the Internet, or another PC, in a fraction of a second and data transmission is faster than the best modems (64 or 128 Kbits/s). ISDN is available as basic rate (equivalent to the capacity of two phone lines or 128 Kbits/s) for domestic or small office use, or primary rate, which gives an aggregate bandwidth of over 2 Mbits/s in
ISDN has all sorts of applications in the world of eCommerce - its use really is dependent on the type of solution being looked at. A real-life example is its use to connect a remote (perhaps home) office to a main office computer network so that an executive can work remotely but have all the benefits of being in the main office. However, one of the drawbacks to using ISDN is that it is still essentially a dial-up service, and each channel is charged at normal telephone rates. So using both channels becomes quite expensive.
Broadband
The explosive growth in the numbers of business people working remotely from their head office (often in offices at home) coupled with the slower than expected take-up of ISDN has resulted in the demand for new services to provide faster Internet connections at more competitive rates.
Broadband services are based on a variety of transmission technologies:
- DSL (Digital Subscriber Line) services, that make use of existing telephony infrastructure;
- Cable Modem services, that make use of cable TV infrastructure;
- Metropolitan Area Ethernet services, that generally require the installation of new cable infrastructure, often based on fibre optic cabling, although some variants of this technology make use of DSL technology.
ADSL
The most common DSL service available is the ADSL service. The 'A' stands for 'Asymmetric', which means that the data transfer rates are not the same in both directions. The transmission rate from the subscriber to the Internet is lower than in the reverse direction; the idea here is that downloading large web pages will account for a high proportion of the use, whereas the volume of data that needs to be transmitted from the user to the network is generally smaller.
The data rates available with ADSL, and in fact the actual availability of ADSL, depend critically on the distance between the subscriber and the nearest digital telephone exchange, and also on the number of subscribers that are using the service. Typically the service offers up to 500 Kilobits/second for downloads, and up to 250 Kilobits/second for uploads. So, unlike leased lines, ADSL gives no guarantees as to the actual transmission rates that will be made available.
Cable Modems
The Cable Modem services offered by the cable TV companies are only available in those areas already served by a cable TV network. The data transmission rates available with these services are similar to ADSL, and as with ADSL, the number of subscribers sharing the infrastructure affects the transmission rates that are actually delivered. With both ADSL and Cable Modem services, it is a simple matter to connect the cable modem or the ADSL filter into an existing LAN, allowing the external Internet connection to be accessed by all of the PCs connected to the LAN. A router is used to achieve this. One side of the router connects to the LAN, and the other side to the cable modem or the ADSL filter.
Metropolitan Area Ethernet services
Where significantly higher data transmission rates are needed, Metropolitan Area Ethernet services are emerging that will allow data rates of up to 10 Gigabits/second to be achieved between the customer premises and the service provider, if suitable fibre optic cabling is available (or can be installed) in order to make this possible. This kind of approach might be used in order to allow a large company that was spread across a number of sites to interconnect their LANs, making them look like one single LAN from the point of view of the users.
Leased Lines
Telecoms operators offer a variety of options for permanent connections for data transmission. These include ISDN, but also higher capacity dedicated links and variable bandwidth links, where capacity is shared with other users. Connections are also available from 'network providers', companies which have private network capacity who lease some or all of their capacity from telecoms companies. Leased lines may be used to connect LANs into a WAN (e.g. head office to a branch) or for teleconferencing.
Wireless Networking
The majority of networking installations to date have been based on fixed cabling of one kind or another, from coaxial cables to twisted pair cabling and optical fibre. The problem with cable-based networking infrastructures is just that - they are cable-based, and so every device that needs to connect to the LAN has to have a cable trailing from it. Two relatively new networking technologies aim to change the way we think about constructing and using LAN installations:
- Bluetooth.
Wireless LAN
A wireless LAN, as the name implies, offers a wireless connection between a computer system and the LAN, via a wireless access point. The data transmission rates that can be achieved are relatively low when compared to the performance of the early 10 Megabits/second Ethernet LANs, but are more than adequate for connecting the average PC or laptop to a LAN, unless applications that demand high data rates are being used.
Wireless access points generally have an Ethernet port that allows them to be connected to a conventional wired LAN backbone, but for small business use, it is possible to network a number of PCs together using only a wireless access point.
Connecting a PC or laptop to the wireless LAN involves the use of a wireless LAN interface that will slot into the PCMCIA socket of a laptop, or plugs into a USB socket of a desktop PC. Increasingly, modern laptop computers are being manufactured with inbuilt wireless LAN capability, in anticipation that they will be used in this way. Assuming that the security features of the technology have been correctly set up, the wireless 'connection' between the computer and the wireless access point is established automatically when the two devices are within radio range. The range of transmission is variable, depending on the construction of the building that it is used in, but can cover distances of up to 100 metres under the right conditions. If it is necessary to use more than one wireless access point to achieve the necessary coverage within a building, a wireless-enabled PC will automatically connect to the access point that offers the best signal.
Bluetooth
Bluetooth is a technology that was originally conceived as a means of replacing the cables between a computer and its peripherals - for example, printers, scanners, and so on. The data transfer rates that it can achieve are adequate for this kind of use, but not for connecting a PC to a LAN. It is now starting to appear in conjunction with other kinds of devices as well - for example, to connect a palmtop computer to a host PC, or to connect a hands free kit to a mobile phone. The transmission range for Bluetooth is significantly shorter - tens rather than hundreds of metres, and as less power is needed to drive the radios in Bluetooth devices, this technology is more appropriate than Wi-Fi for use in smaller, low power devices.
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. (
- 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
- The enablement of a business vision supported by advanced information technology improves efficiency and effectiveness within the trading process. (E-Commerce Innovation Centre at
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
- 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
