1 INTRODUCTION TO COMMERCE : Commerce is the exchange of something of value between two entities. That "something may be goods, services, information, money, or anything else the two entities consider to have value. Commerce is the central mechanism from which capitalism is derived. INTRODUCTION TO ELECTRONIC COMMERCE : Electronic commerce, commonly known as e-commerce or e-Commerce, is a type of industry where the buying and selling of products or services is conducted over electronic systems such as the Internet and other computer networks. Electronic commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI),inventory management systems, and automated data collection systems. Electronic commerce is generally considered to be the sales aspect of e-business. It also consists of the exchange of data to facilitate the financing and payment aspects of business transactions. This is an effective and efficient way of communicating within an organization and one of the most effective and useful ways of conducting business. E-commerce can be divided into 7 subsections: E-tailing or "virtual storefronts" on websites with online catalogs, sometimes gathered into a "virtual mall" Buying or selling on websites and/or online marketplaces The gathering and use of demographic data through web contacts and social media Electronic data interchange, the business-to-business exchange of data E-mail and fax and their use as media for reaching prospective and established customers (for example, with newsletters) Business-to-business buying and selling The security of business transactions UNIT : III
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E-tailing or The Virtual Storefront and the Virtual Mall As a place for direct retail shopping, with its 24-hour availability, a global reach, the ability to interact and provide custom information and ordering, and multimedia prospects, the Web is rapidly becoming a multibillion dollar source of revenue for the world's businesses. A number of businesses already report considerable success. As early as the middle of 1997, Dell Computers reported orders of a million dollars a day. By early 1999, projected e-commerce revenues for business were in the billions of dollars and the stocks of companies deemed most adept at e- commerce were skyrocketing. Market Research In early 1999, it was widely recognized that because of the interactive nature of the Internet, companies could gather data about prospects and customers in unprecedented amounts -through
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3 site registration, questionnaires, and as part of taking orders. The issue of whether data was being collected with the knowledge and permission of market subjects had been raised. Electronic Data Interchange (EDI) EDI is the exchange of business data using an understood data format. It predates today's Internet. EDI involves data exchange among parties that know each other well and make arrangements for one-to-one (or point-to-point) connection, usually dial-up. E-Mail, Fax, and Internet Telephony E-commerce is also conducted through the more limited electronic forms of communication called e-mail, fax, and the emerging use of telephone calls over the Internet. Most of this is business- to-business, with some companies attempting to use e-mail and fax for unsolicited ads (usually viewed as online junk mail or spam) to consumers and other business prospects. An increasing number of business Web sites offer e-mail newsletters for subscribers. A new trend is opt-in e- mail in which Web users voluntarily sign up to receive e-mail, usually sponsored or containing ads, about product categories or other subjects they are interested in. Business-to-Business Buying and Selling Thousands of companies that sell products to other companies have discovered that the Web provides not only a 24-hour-a-day showcase for their products but a quick way to reach the right people in a company for more information. The Security of Business Transactions Security includes authenticating business transactors, controlling access to resources such as Web pages for registered or selected users, encrypting communications, and, in general, ensuring the privacy and effectiveness of transactions. Among the most widely-used security technologies is the Secure Sockets Layer (SSL), which is built into both of the leading Web browsers. Electronic commerce was identified as the facilitation of commercial transactions electronically, using technology such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT). What is EDI? What is EFT? Electronic Data Interchange: EDI is the structured transmission of data between organizations by electronic means. It is used to transfer electronic documents or business data from one computer system to another computer system.
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Electronic Funds Transfer : EFT is the electronic exchange or transfer of money from one account to another. HSTORY OF E-COMMERCE : The growth and acceptance of credit cards, automated teller machines (ATM) and telephone banking in the 1980s were also forms of electronic commerce. Another form of E-Commerce was the airline reservation system, for example Sabre in the USA and Travicom in the UK. By the end of 2000, many European and American business companies offered their services through the World Wide Web. Since then people began to associate a word E-Commerce" with the ability of purchasing various goods through the Internet using secure protocols and electronic payment services. ADVANTAGES OF E-COMMERCE : Faster buying/selling procedure, as well as easy to find products. Buying/selling 24/7. Low operational costs and better quality of services. Easy to start and manage a business. No need of physical company set-ups. Customers can easily select products from different providers without moving around physically. DISADVANTAGES OF E-COMMERCE :
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5 There is no guarantee of product quality. There are many hackers who look for opportunities, and thus an ecommerce site, service, payment gateways, all are always prone to attack. ELECTRONIC COMMERCE AND PHYSICAL COMMERCE : Generally speaking, e-commerce is about the sale and purchase of goods or services by electronic means, particularly over the internet. Figure 1.1 shows that in broad terms one can distinguish two types of commerce: physical commerce and e-commerce. In a physical or traditional commerce system, transactions take place via contact between humans usually in a physical outlet such as a store. For example, if you want to buy a book, you will go to a physical bookstore and buy the physical book from a salesman. In a pure e-commerce system, transactions take place via electronic means.
In this case, you will access a cyber bookstore and download a digital book from a server computer. These two cases represent the extremes: the traditional commerce system on one side and the pure e-commerce system on the other. There are many variants and in many cases, e- commerce and physical commerce can complement each other. For example, a physical book is ordered by electronic means and it is sent to you via physical means [Turban et al., 20001. According to Schneider and Perry [2000], e-commerce is more suitable for standard goods, low- value goods, digital goods, and simple services (i.e. intangible goods), whereas traditional commerce is more suitable for nonstandard goods, perishable goods, expensive goods, and extremely low-value goods. Complex products such as cars and nonstandard services are better served by integrating e-commerce and physical commerce. Strictly speaking, e-commerce has a very wide scope and can be further divided into different categories. The most popular type is, of course, Internet Commerce. It refers to business transactions over the internet and, in most cases, the transactions are carried out over a web
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6 system, so we may call it Web-based Electronic Business. Another broad categorization of e- commerce is to separate it into business focused or customer-focused e-commerce. In recent years, another term called e-business has emerged, In general, e-business has a wider perspective than e-commerce. It involves using information technologies in all aspects of the business. Hence, e-commerce can be viewed as a subset of e-business. However, like many other e-commerce books, we will use the following terms e-commerce, internet commerce, Web- based electronic business and e-business in an interchangeable manner.
B2B e-commerce is simply defined as ecommerce between companies. About 80% of e- commerce is of this type. Examples: Intel selling microprocessor to Dell Heinz selling ketchup to Mc Donalds
What is B2C ecommerce?
Business-to-consumer e-commerce, or commerce between companies and consumers, involves customers gathering information; purchasing physical goods or receiving products over an electronic network. Example: Dell selling me a laptop
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What is B2G ecommerce?
Business-to-government e-commerce or B2G is generally defined as commerce between companies and the public sector. It refers to the use of the Internet for public procurement, licensing procedures, and other government-related operations Example: Business pay taxes, file reports, or sell goods and services to Govt. agencies.
What is C2C ecommerce?
Consumer-to-consumer e-commerce or C2C is simply commerce between private individuals or consumers. Example: Mary buying an iPod from Tom on eBay Me selling a car to my neighbour
What is m-commerce?
M-commerce (mobile commerce) is the buying and selling of goods and services through wireless technology-i.e., handheld devices such as cellular telephones Mobile Ticketing Information Services Mobile Banking
BUSSINESS MODELS : E-Commerce or Electronics Commerce business models can generally categorized in following categories.
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8 Business - to - Business (B2B) Business - to - Consumer (B2C) Consumer - to - Consumer (C2C) Consumer - to - Business (C2B) Business - to - Government (B2G) Government - to - Business (G2B) Government - to - Citizen (G2C) Business - to - Business (B2B) Website following B2B business model sells its product to an intermediate buyer who then sells the product to the final customer. As an example, a wholesaler places an order from a company's website and after receiving the consignment, sells the end product to final customer who comes to buy the product at wholesaler's retail outlet.
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Business - to Consumer (B2C) Website following B2C business model sells its product directly to a customer. A customer can view products shown on the website of business organization. The customer can choose a product and order the same. Website will send a notification to the business organization via email and organization will dispatch the product/goods to the customer.
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Consumer - to - Consumer (C2C) Website following C2C business model helps consumer to sell their assets like residential property, cars, motorcycles etc. or rent a room by publishing their information on the website. Website may or may not charge the consumer for its services. Another consumer may opt to buy the product of the first customer by viewing the post/advertisement on the website.
Consumer - to - Business (C2B) In this model, a consumer approaches website showing multiple business organizations for a particular service. Consumer places an estimate of amount he/she wants to spend for a particular service. For example, comparison of interest rates of personal loan/ car loan provided by various
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15 banks via website. Business organization who fulfills the consumer's requirement within specified budget approaches the customer and provides its services.
Business - to - Government (B2G) B2G model is a variant of B2B model. Such websites are used by government to trade and exchange information with various business organizations. Such websites are accredited by the government and provide a medium to businesses to submit application forms to the government.
Government - to - Business (G2B) Government uses B2G model website to approach business organizations. Such websites support auctions, tenders and application submission functionalities.
Government - to - Citizen (G2C) Government uses G2C model website to approach citizen in general. Such websites support auctions of vehicles, machinery or any other material. Such website also provides services like registration for birth, marriage or death certificates. Main objectives of G2C website are to reduce average time for fulfilling people requests for various government services.
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INTEGRATION BUSINESS MODEL-
E-SERVICES : The concept of e-service (short for electronic service) represents one prominent application of utilizing the use of information and communication technologies (ICTs) in different areas. However, providing an exact definition of e-service is hard to come by as researchers have been using different definitions to describe e-service. Despite these different definitions, it can be argued that they all agree about the role of technology in facilitating the delivery of services which make them more of electronic services. It seems compelling to adopt Rowley (2006) approach who defines e-services as: deeds, efforts or performances whose delivery is mediated by information technology. Such e-service includes the service element of e-tailing, customer support, and service delivery. This definition reflect three main components- service provider, service receiver and the channels of service delivery (i.e., technology). For example, as concerned to public e-service, public agencies are the service provider and citizens as well as businesses are the service receiver. The channel of service delivery is the third requirement of e-service. Internet is the main channel of e-service
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17 delivery while other classic channels (e.g. telephone, call center, public kiosk, mobile phone, television) are also considered.
E-service benefits : Lu (2001) identifies a number of benefits for e-services, some of these are: Accessing a greater customer base Broadening market reach Lowering of entry barrier to new markets and cost of acquiring new customers Alternative communication channel to customers Increasing services to customers Enhancing perceived company image Gaining competitive advantages Potential for increasing customer knowledge
E-service domain : The term e-service has many applications and can be found in many disciplines. The two dominant application areas of e-services are E-business (or e-commerce): e-services mostly provided by businesses or [NGO|non-government organizations] (NGOs) (private sector). E-government: e-services provided by government to citizens or business (public sector is the supply side). The use and description of the e-service in this page will be limited to the context of e-government only where of the e-service is usually associated with prefix public: Public e- services. In some cases, we will have to describe aspects that are related to both fields like some conferences or journals which cover the concept of e-Service in both domains of e-government and e-business. Architecture : Depending on the types of services, there are certain functionalities required in the certain layers of e-service architectural framework, these are but not limited to Data layer (data sources), processing layers ( customer service systems, management systems, data warehouse systems, integrated customer content systems), exchange layer (Enterprise Application Integration EAI), Interaction layer ( integrating e-services), and presentation layer (customer interface through which the web pages and e-services are linked). E-service cost factor :
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18 Some major cost factors are (Lu, 2001): Expense of setting up applications Maintaining applications Internet connection Hardware/software Security concerns legal issues Training; and Rapid technology changes
Major e-service keywords : Some of the major keywords of e-service as found in the e-government research are as follows: Acceptance User acceptance of technology is defined according to Morris (1996, referred by Wu 2005, p. 1) [21] as the demonstrable willingness within a user group to employ information technology for the tasks it is designed to support. This definition can be brought into the context of e-service where acceptance can be defined as the users willingness to use e-service or the willingness to decide when and how to use the e-service. Accessibility Users ability to access to the e-service is important theme in the previous literature. For example, Huang (2003) [22] finds that most of the websites in general fail to serve users with disabilities. Recommendation to improve accessibility is evident in previous literature including Jaeger (2006) [23] who suggests the following to improve e-services accessibility like: design for accessibility from the outset of website development, Involve users with disabilities in the testing of the site Focus on the benefits of an accessible Web site to all users. Administrative literacy According to Grnlund et al. (2007), [24] for a simple e-service, the needs for knowledge and skills, content and procedures are considerably less. However, in complicated services there are needed to change some prevailed skills, such as replacing verbal skills with skill in searching for information online. Benchmarking This theme is concerned with establishing standards for measuring e-services or the best practices within the field. This theme also includes the international benchmarking of e- government services (UN reports, EU reports); much critic has been targeting these reports being
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19 incomprehensive and useless. According Bannister (2007) [25] benchmarks are not a reliable tool for measuring real e-government progress. Furthermore, if they are poorly designed, they risk distorting government policies as countries may chase the benchmark rather than looking at real local and national needs Digital divide Digital divide is considered one of the main barriers to implementing e-services; some people do not have means to access the e-services and some others do not know how to use the technology (or the e-service). According to Helbig et al. (2009), [26] we suggest E-Government and the digital divide should be seen as complementary social phenomena (i.e., demand and supply). Moreover, a serious e-government digital divide is that services mostly used by social elites." E-readiness Most of the reports and the established criteria focus on assessing the services in terms of infrastructure and public policies ignoring the citizen participation or e-readiness. According to by Shalini (2009), [27] the results of the research project reveal that a high index may be only indicating that a country is e-ready in terms of ICT infrastructure and info-structure, institutions, policies, and political commitment, but it is a very poor measure of the e-readiness of citizens. To summarize the findings, it can be said that Mauritius is ready but the Mauritians are not ``E-readiness, as the Economist Intelligence Unit defines, is the measure of a countrys ability to leverage digital channels for communication, commerce and government in order to further economic and social development. Implied in this measure is the extent to which the usage of communications devices and Internet services creates efficiencies for business and citizens, and the extent to which this usage is leveraged in the development of information and communications technology (ICT) industries. In general terms, the definition of e-readiness is relative,for instance depending on a country in question's priorities and perspective. [28]
Efficiency As opposed to effectiveness, efficiency is focused on the internal competence within the government departments when delivering e-services. There is a complaint that researchers focus more on effectiveness There is an emerging trend seemingly moving away from the efficiency target and focusing on users and governance outcome. While the latter is worthwhile, efficiency must still remain a key priority for eGovernment given the budget constraints compounded in the future by the costs of an ageing population. Moreover, efficiency gains are those that can be most likely proven empirically through robust methodologies [29]
Security Security is the most important challenge that faces the implementation of e-services because without a guarantee of privacy and security citizens will not be willing to take up e-government services. These security concerns, such as hacker attacks and the theft of credit card information,
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20 make governments hesitant to provide public online services. According to the GAO report [30] of 2002 security concerns present one of the toughest challenges to extending the reach of e- government.The rash of hacker attacks, Web page defacing, and credit card information being posted on electronic bulletin boards can make many federal agency officialsas well as the general publicreluctant to conduct sensitive government transactions involving personal or financial data over the Internet. By and Large, Security is one of the major challenges that faces the implementation and development of electronic services. people want to be assured that they are safe when they are conducting online services and that their information will remain secure and confidential Stakeholders Axelsson et al. (2009) [31] argue that the stakeholder concept-which was originally used in private firms-, can be used in public setting and in the context of e-government. According to them, several scholars have discussed the use of the stakeholder theory in public settings. [32] The stakeholder theory suggests that need to focus on all the involved stakeholder s when designing the e-service; not only on the government and citizens. Usability Compared to Accessibility, There is sufficient literature that addresses the issue of usability; researchers have developed different models and methods to measure the usability and effectiveness of eGovernment websites. However, But still there is call to improve these measures and make it more compressive ``The word usability has cropped up a few times already in this unit. In the context of biometric identification, usability referred to the smoothness of enrollment and other tasks associated with setting up an identification system. A system that produced few false matches during enrollment of applicants was described as usable. Another meaning of usability is related to the ease of use of an interface. Although this meaning of the term is often used in the context of computer interfaces, there is no reason to confine it to computers.
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21 CATEGORIES OF E-SERVICES :
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23 WEB-ENABLED SERVICES : Web enabled refers to a product or service that can be used through, or in conjunction with, the World Wide Web. A Web-enabled product may be accessed through a Web browser or be able to connect to other Web-based applications in order to synchronize data. This term used to be an attractive buzzword to include in a product description, but now it would be rarer to have technology that is not Web enabled. Web-enabled, information-based services is clearly a hot area for business model innovation for companies in nearly every consumer and b2b industry sector. But proving the ROI can be difficult when most models still rely on advertising dollars for revenue. After studying a number of successful examples that convert eyeballs to dollars through a number of creative revenue streams, a few keys to success emerged: 1. With great content comes a community. A truly useful information-based service will understand the range of needs of its users, and will aggregate content into one forum, eliminating the hassle of dealing with providers one by one, question by question. Arguably, theknot.com operates this model best, aggregating a range of relevant wedding-related content at the macro-level, then drilling down to ratings and recommendations of local service providers by zip code. Good-bye Yellow Book (are they still around?) 2. Enable both virtual and physical communities. This is the Weight Watchers business model, rated by users as the most successful diet website. It lets the user choose how they want to viagra usa engage, and provides a range of online-only or in-person options based on personal preference. If you have ever been to a Weight Watchers meeting, then you know the power that comes from this physical brand touch point (what company wouldnt want their users to call themselves lifetime members of their services?) 3. Use the data. Identifying a revenue-generating data play is likely the hardest way to monetize an information-based service, but could have the highest payout. Johnson & Johnsons BabyCenter.com, the #1 website for moms (they reach 70% of all moms in the US) developed a Marketing Solutions Center that consults to their advertisers and other companies looking for ways to target moms online. Similarly,VibrantNation.com, the leading forum for Boomer women, translates the data it receives from its forums into a b2b marketing service.
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A Web service needs to be created and its interface must be defined A Web service needs to be published to one or more intranet or Internet repositories for potential users to locate A Web service needs to be located to be invoked by potential users A Web service needs to be invoked to be of any benefit A Web service may need to be unpublished when it is no longer available or needed
Web services interactions
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WEB SERVICES ARCHITECHTURE
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26 MATCHMAKING SERVICES :
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INFORMATION-SELLING ON THE WEB :
Information selling on the web is in the form of e-books including digital audio and video. Most people use the Internet to do research, gather business intelligence, find fun things to do, indulge their hobbies or as a medium for the exchange of information via e-mail. The idea behind this new business model is to leverage this insatiable hunger for information on the web by creating and selling digital information for profit. What are Information Products? For the purpose of this article information products can be classified into three: 1. eBooks - eBooks are electronic books you can read on your computer or your MP4 player or print out if you prefer hard copies. eBooks are instantly delivered electronically via a simple download from the Internet to the customer. 2. Audio - You can record your information using freely available software and a microphone. Audio CDs are now being delivered instantly via digital download to the customer. 3. Video - They say a picture is worth a thousand words, a video is even more powerful. Contrary to popular belief creating a video product is not difficult. Digital video cameras and the necessary software are readily available. Most video cameras now come with full instructions and the software to get this done. A well-planned video presentation may be what is needed to reach your audience.
Why Information Products?
There are several reasons why this business model has become very attractive to many aspiring entrepreneurs:
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1. Low cost entry. The cost for entry is small, you can create your products, build a website, pay your hosting fees plus acquire the tools to start an effective e-mail campaign for under $500. There is probably no other business with this much potential that you can start for so little money. 2. Easy to Create. Once you have gone through the process of creating your first product, the process becomes second nature to you. You can create as many products as you wish to enable you build multiple sources of income. The technology to do this is available in the form of e-Book creation software. These specialized software will help you automate the entire process including packaging and distribution. 3. Unlimited Inventory. Once you have created a successful product, it becomes an asset that you own and control. There are no more production costs and the inventory is unlimited. You do not need to purchase additional inventory because you now own a product that cannot be depleted. Your job is to continue to market and promote your product for as long as there is demand for it. 4. No shipping and handling required. Your product is delivered automatically without any human intervention. No lost packages, no stamps and no delivery costs. The computer handles all chores and tracks the delivery of your product to your customers. 5. Immediate Payment: No receivables, thank you. Product is delivered automatically once payment is made. 6. You can work from home no long commutes necessary.