Lecture Computing for management - Chapter 14

Lecture 14 - Electronic commerce. After studying this chapter you will be able to understand: Electronic commerce definition, e-commerce infrastructure, related definitions, dimensions of electronic commerce, commerce differences, e-commerce field, electronic market, types of e-commerce.

Electronic Commerce

Lecture 14

Summary of Previous Lecture

 HTML: The Language of the Web

Summary of Previous Lecture

List

Summary of Previous Lecture

 Front Page

Today’s Lecture

Today’s Lecture

 Limitations of E-Commerce

 Summary

 Networked

prevailing technology,

have become one of

the most influential

Introduction

 The Internet allows an organization of any size to exchange information at the speed

of light, with anyone, anywhere, anytime.

(Assuming that all parties to the information exchange have “unconstrained”

broadband connections.)

Electronic Commerce is the Solution for all!

Electronic Commerce

 Electronic commerce is concerned with the buying and selling of products and services using

telecommunication

network, especially

the internet.

E-Commerce Infrastructure

computing environment in business, home,

and government

A global networked environment is known

as the Internet

A counterpart within organizations, is

called an intranet

An extranet extends intranets so that

they can be accessed by business

partners.

Definitions and Content of Field

E-Commerce Example Website

Dimensions of Electronic Commerce

The product (OR service)

(digitally)

The process

The delivery agent (or intermediary)

Example- The Product

 Product can be sold out at some physical market place.

Shopping Mall in Pakistan

Example– The Product

 Digital products can be downloaded or bought on CD.

Version from Microsoft Website

The Process

 Process can be viewed as a sequence of activities to accomplish certain task.

 A business process or business

method is a collection of related,

structured activities or tasks that produce

a specific service or product (serve a particular goal) for a particular customer or customers

Example – Physical Process

 In shoe industry, different processes are done physically to make a shoe This may include, selection of suitable leather,

stitching, polishing, etc.

 There may be several processes within a process to accomplish certain task.

 Many processes are involved from taking raw material from the market, making of a shoe and delivering it to the customers.

Example – Digital Process

 Using a website when customer places an order, digital process is involved in between to deliver the product.

Customer order

handling process

The Delivery Agent Example

 Physical delivery agent example includes

a Postmaster delivering letters to homes.

 Mail delivery agent is a digital program to deliver the e-mail messages to a local

recipient mailbox.

Problem delivering letters

when on strike



Available 24

hours

and physical dimensions

Physical  agent Digital agent

Digital  Product

Physical  Product Physical process

The core of  electronic commerce

The Dimensions of Electronic Commerce

Traditional 

commerce

EC applications are supported by infrastructures, and their implementation is dependent on four major areas (supporting pillars)

EC Management

 The EC management coordinates the applications, infrastructures, and pillars It also includes Internet marketing and advertisement.

A Framework for Electronic Commerce 9

Electronic Commerce Applications

• Stocks Jobs • On-line banking

• Procurement and purchasing• Malls • On-line marketing and advertising

• Home shopping • Auctions • Travel • On-line publishing

People:

Buyers, sellers, intermediaries, services, IS people, and management

Public policy, legal, and privacy issues

Technical standards for documents, security, and network protocols payment

Organizations:

Partners, competitors, associations, government services

(3) Multimedia content and network publishing infrastructure (HTML, JAVA, World Wide Web, VRML)

(4) Network infrastructure (Telecom, cable TV wireless, Internet) (VAN, WAN, LAN, Intranet, Extranet)

(5) Interfacing infrastructure (The databases, customers, and applications)

Management

© Prentice Hall, 2000

How e-commerce is changing

people?

that you did with your friends or relatives It was

a social event

networks are the driving force behind online

customers and online communities

right way people will talk about them, and news

spreads throughout the online world much

quicker than in the real world

Public Policy

 Policies like shipment of products, update

of different features of products, online

sale and purchase are now being

developed as per e-commerce needs.

policies

Technical standards and Protocols

requirement about technical systems

such as trade unions, and trade associations to establish electronic commerce

material and selling quality products, etc

Electronic Markets

interactions and relationships where information, products, services, and payments are exchanged.

 The market handles all the necessary transactions.

 An electronic market is a place where shoppers and sellers meet electronically.

Electronic Markets

negotiate, submit bids, agree on an order, and finish the execution on- or off-line

Shopper/Purchaser Seller/Supplier

Electronic Market (Transaction Hander)

Electronic commerce

network (Infrastructure)

Product/service information request Purchase request

Payment or payment advice

Purchase fulfillment request Purchase change request

Response to fulfillment request

Shipping notice

Payment approval Electronic transfer of funds Electronic transfer of funds

Business to Consumer E-Commerce

 Business to Consumer (B2C) is the most commonly form of e-commerce, where a business sells goods and services to consumers for their personal use and consumption

Consumer to Consumer

individuals an opportunity to sell items to others using an intermediary, such as e-bay.com, amazon.com, olx.com.pk.

placing the ad for the product at the online auction or trading site, and shipping the goods

the site, including the search engine through which buyers locate the product for sale, and processing the payments, both from the buyer and to the seller

Example – A C2C Website

Person to Person

of the Internet to share files and computer resources directly, without going through a Web server

be provided free of charge, the challenge is to make enough money to keep the P2P site operating

history is Napster.com

Consumer to Business

 Consumers create value and firm confirms its value.

reviews, or when a consumers gives a useful idea for new product development, then this individual is creating value to the firm, if the firm adopts the input

Business to Employee

companies to provide products and/or services

to their employees

automate employee-related corporate

processes, this may include

Electronic Business

 E-Business describes the broadest definition of EC It includes customer service and intra business tasks It is frequently used interchangeably with EC

Other types

Government organizations, departments, and authorities and other Government

organizations, departments, and authorities

communication tools between government

units and their employees

Other Types

local and central government and the commercial business sector, with the purpose

of providing businesses information and advice on e-business etc

Other Types

 B2G (Business-to-Government)

businesses to bid on government auctions etc

 G2C (Government-to-Citizen),

government and private individuals or residents

 An interorganizational information system (IOS) involves information flow among two

or more organizations.

transaction processing, such as transmitting orders, bills, and payments

 A typical IOS includes a company and its suppliers and and/or customers.

Interorganization Information Systems

Electronic data interchange (EDI)

Electronic data interchange (EDI)

 It is used to transfer electronic documents

or business data from one computer system to another computer system, i.e from one trading partner to another trading partner without human intervention.

 It is termed as the structured transmission

of data between organizations by electronic means

 Used in B2B e-commerce model.

 An extranet is a computer network that

allows controlled access from the outside, for specific business or educational purposes.

Electronic funds transfer (EFT)

 It is the electronic exchange or transfer of money from one account to another, either within a single financial institution or across multiple institutions, through computer-based systems i.e.; e- commerce.

Integrated messaging systems

 It is the integration of different electronic messaging and communications media (e- mail, SMS, Fax, voicemail, video messaging, etc.) technologies into a single interface, accessible from a variety of different devices.

 Different organizations may integrate shared messages using this technology.

Shared databases

 Databases can be shared between organizations for collective benefits.

system integrate nation wide health database

of patients

for checkup Previous history of medications and findings will be available to the doctors

Supply Chain Management

 It is concerned with the supply of raw material, manufacturing of products and provide this to consumers.

 E-Commerce offers wide range of software solutions for online supply chain management.

The Benefits of Electronic Commerce

international markets

distributing, storing and retrieving paper-based information

is much cheaper than value added networks (VANs)

 Benefits to Organizations

Benefits to Customers

24 hours a day, all year round from almost any

location

services by allowing them to shop in many places and conduct quick comparisons

some cases, especially with digitized products

Benefits to Society

less traveling for shopping, resulting in less traffic on the roads, and lower air pollution

benefiting the poor ones

rural areas to enjoy products and services which otherwise are not available to them

cost,increases effectiveness, and/or improves quality

E-Commerce Limitations

and standards

is often very high

Many unresolved legal issues.

Benefits of E-Commence

You Do not need to stand in a line to pay bills any more!