CSI315 Web CSI315 Web Technology and Technology and

ApplicationsApplications

CSI315 Web CSI315 Web Technology and Technology and

ApplicationsApplications

E-COMMERCEE-COMMERCE

Traditional Commerce

– Traditional commerce: all dimensions are physical• Brick-and-mortar organizations

– Old-economy organizations (corporations)– Perform all business off-line– Sell physical products by means of physical

agents

E-Commerce• Electronic Commerce (EC) is the

process of buying, selling, or exchanging products, services, and information via computer networks

• EC defined from these perspectives– Communications– Business process– Service– Online– Collaborations– Community

E-BusinessE-business refers to all uses of advances in

information technology (IT), particularly networking and communications technology, to improve the ways in which an organization performs all of its business processes.

E-business encompasses an organization’s external interactions with its:– Suppliers– Customers– Investors– Creditors– The government– Media

E Business vs Ecommerce

• E-Commerce direct financial transaction involving electronic processes using Internet technologies. E.g Ordering a book on Amazon.com is e-commerce and e-business.

• E-business is a broader definition of EC that includes not just the buying and selling of goods and services, but also

• Servicing customers• Collaborating with business partners• Conducting electronic transactions within an

organization• E .g Creating a map with directions from your home to

the post office on Yahoo.com

• All e-commerce is e-business but not all e-business is e-commerce

Myths and risksMyths– The Internet changes everything– If you build it, they will come– All brands are equal online

Risks– Overinvestment on systems that customers and prospects will

not use– Investing in propriety systems that cannot be maintained

(Vendor lock)– Poor consideration of who will manage the system– Broken promises: no plan for content management– Your competitors will see everything that you publish– Security – hacks– Lack of trust of the online environment (viruses, spoofing)

EC Concepts – Pure EC: all dimensions are

digital• Pure online (virtual) organizations• New-economy organization• Sell products or services only online

– Partial EC: a mix of digital and physical dimensions• Click-and-mortar organizations• Conduct EC activities• Do their primary business in the physical

world

EC Concepts (cont.)• Internet vs. Non-Internet EC

– VANs—value-added networks– LANs—local area networks– Single computerized machines

• Using a smart card in a vending machine

• Using a cell phone to make an online purchase

The EC Framework and Field

• An EC Framework– EC applications supported by

infrastructure and 5 support areas• People• Public policy• Technical standards and protocols• Business partners• Support services

Exhibit 1.2A Framework for EC

Categories of EC• Business-to-business (B2B) : EC model in

which all of the participants are businesses or other organizations

• Business-to-consumer (B2C): EC model in which businesses sell to individual shoppers

• Business-to-business-to-consumer (B2B2C): EC model in which a business provides some product or service to a client business; the client business maintains its own customers, to whom the product or service is provided

Categories of EC

• Consumer-to-business(C2B): individuals who use the Internet to sell products or services to organizations and /or seek sellers to bid on products or services they need

• Consumer-to-consumer (C2C) : consumers sell directly to other consumers

Categories of EC• Mobile commerce (m-commerce)—

EC transactions and activities conducted in a wireless environment

• Location-commerce—(l-commerce)

m-commerce transactions targeted to individuals in specific locations, at specific times

Categories of EC• Business-to-employee (B2E): EC model in

which an organization delivers services, information, or products to its individual employees

• Collaborative commerce (c-commerce): EC model in which individual or groups communicate or collaborate online

• E-government: Government-to-citizens (G2C): EC model in which a government entity buys or provides good, services, or information to businesses or individual citizens

Categories of EC• Intrabusiness (organizational)

EC: EC category that includes all internal organizational activities that involve the exchange of goods, services, or information among various units and individuals in an organization

• Marketing• Computer sciences• Consumer behavior

and psychology• Finance• Economics

• Management information systems

• Accounting and auditing

• Management• Business law and

ethics• Others

Interdisciplinary Nature of EC

The Benefits of EC• Benefits to Organizations

– Expands the marketplace to national and international markets

– Decreases the cost of creating, processing, distributing, storing and retrieving paper-based information

– Allows reduced inventories and overhead by facilitating pull-type supply chain management

– The pull-type processing allows for customization of products and services which provides competitive advantage to its implementers

– Reduces the time between the outlay of capital and the receipt of products and services

– Lowers telecommunications cost - the Internet is much cheaper than value added networks (VANs)

Benefits of EC (cont.)• Benefits to consumers

– Enables consumers to shop or do other transactions 24 hours a day, all year round from almost any location

– Provides consumers with more choices

– Provides consumers with less expensive products and services by allowing them to shop in many places and conduct quick comparisons

Benefits of EC (cont.)– Allows quick delivery of products and services

(in some cases) especially with digitized products

– Consumers can receive relevant and detailed information in seconds, rather than in days or weeks

– Makes it possible to participate in virtual auctions

– Allows consumers to interact with other consumers in electronic communities and exchange ideas as well as compare experiences

– Facilitates competition, which results in substantial discounts

Benefits of EC (cont.)• Benefits to society

– Enables more individuals to work at home, and to do less traveling for shopping, resulting in less traffic on the roads, and lower air pollution

– Allows some merchandise to be sold at lower prices, benefiting less affluent people

– Enables people in Third World countries and rural areas to enjoy products and services which otherwise are not available to them

– Facilitates delivery of public services at a reduced cost, increases effectiveness, and/or improves quality

The Limitations of EC• Technical limitations

– There is a lack of universally accepted standards for quality, security, and reliability

– The telecommunications bandwidth is insufficient

– Software development tools are still evolving– There are difficulties in integrating the

Internet and EC software with some existing (especially legacy) applications and databases.

– Special Web servers in addition to the network servers are needed (added cost).

– Internet accessibility is still expensive and/or inconvenient