CSI 315 Web Technology and Applications ECOMMERCE Traditional

CSI 315 Web Technology and Applications E-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-Business E-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 ebusiness is e-commerce

Myths and risks Myths – 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. 2 A Framework for EC

Categories of EC • Business-to-business (B 2 B) : EC model in which all of the participants are businesses or other organizations • Business-to-consumer (B 2 C): EC model in which businesses sell to individual shoppers • Business-to-business-to-consumer (B 2 B 2 C): 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(C 2 B): 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 (C 2 C) : 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 (B 2 E): 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 (G 2 C): 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

Interdisciplinary Nature of EC • Marketing • Computer sciences • Consumer behavior and psychology • Finance • Economics • Management information systems • Accounting and auditing • Management • Business law and ethics • Others

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 pulltype 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