ICE-M1151: E-Commerce System Dr. Md. Hasnat Kabir

Transcription

1 ICE-M1151: E-Commerce System Dr. Md. Hasnat Kabir References Electronic Commerce, from Vision to Fulfillment by Elias M. Awad 1

2 What is e-commerce Selling goods and services on the retail level with anyone, anytime and anywhere via Internet. Brings the universal access of the Internet to the core business processes. E-Commerce assists in Generating demand for products and services. Improving order management, financial transactions and logistics. Successful e-commerce should result in reduction of transaction costs and streamlining of business 2

3 There are several ways of looking at e- commerce: 1.From communication perspective: it is the ability to deliver products, services, information or payments via networks like the internet. 2. From an interface view: e-commerce means information & transaction exchanges. e.g. B2B (business - to business), B2C (business to consumer), C2C (Consumer to consumer) 3

4 3.As a business process: e-commerce means activities that support commerce electronically by networked connections. eg- business processes like manufacturing, inventory & business to business processes like supply chain management are managed by the same networks as business-to-consumer processes. 4.From an online perspective: e-commerce is an electronic environment that allows sellers to buy and sell products, services and information on the internet. The product may be like cars or services like news and consulting. 4

5 5. As a structure: e-commerce deals with various media: data, text, Web pages, Internet telephony, and Internet desktop video. 6.As a market: e-commerce is a worldwide network. A local store can open a Web storefront and find the world at its doorstepcustomers, suppliers, competitors and payment services of course, and advertising presence is essential. 5

6 Examples of e-commerce Credit card authorisation Online travel reservations Global wire funds transfer Point of Sale (POS) transactions Electronic banking Fund raising Auctioneering 6

7 What is e-business Conduct of business on the internet, in supplychain planning, tracking, fulfillment, invoicing and payment. It include buying and selling as well as serving customers and collaborating with business partners. Create value by forming new relationships between and among businesses and processes. 7

8 E-Business Goals Reach new markets Create new products and services Build customer loyalty Enrich human capital Make optimum use of existing and emerging technologies Achieve market leadership and competitive advantage 8

9 E-commerce is not e-business. Why?? 9

10 E-COMMERCE HAS BROKEN THE TRADITIIONAL WAY OF DOING BUSINESS: 1. Companies share information with competitors 2. Suppliers share information with buyers 3. Corporate procurement is no longer determined solely on price 4. Financial transaction occur with the involvement of banks. 10

11 E-Commerce Myths 1. Setting up a web site is easy But ensuring its availability and performance is difficult. 2. E-commerce means no more mass marketing Businesses still have to advertise their presence on the web. 3. E-commerce means a new economy There is no New economy, but there is something new in the real economy. 4. E-commerce is revolutionary Proportionate attention needs to be paid to aspects related to 24/7 warehousing, delivery, customer support, etc. 11

12 E-Commerce Myths (Contd.) 5. E-commerce is a commercial fad that crashed in All products can be sold online Some can only be advertised. 7. Build it and they will come Web sites have to be promoted just like any other business. 8.The middleman is out Online reselling, headhunting, directory services etc. is the emerging trend in e-commerce. 9. Size is not important for online firms Cyber customers are known to have preferred e- commerce with large brand names. 12

13 Advantages of E-Commerce Lower relative cost Proportionate investment allows startup companies to compete with market leaders. Economic Operations Administration of e-commerce infrastructure can be relatively more economical than that of a off-line business. Higher Margin For the same scale of business, processing overheads reduce considerably. 13

14 Advantages of E-Commerce (Contd.) Better customer service Responsive and accurate online customer service. Convenient market search No need to physically move from store to store to make price and promotions comparisons. Productivity gains Lesser resource allocation Value added resources Teamwork Higher overall interactivity between consumers and businesses. 14

15 Advantages of E-Commerce (Contd.) Knowledge markets Convenient research environment Information sharing, convenience and control 24/7 operations possible with minimum physical interactions. Contemporary business models Large scale barter trade Payments in kind vs. cash Product customizations Convenient market research allows development of customizable products or products with wider consumer base. 15

16 Limitations of E-Commerce Security Spamming, spying, file corruption, and misuse. Cyber consumers need secure transaction and site protection. System and data integrity Security against viruses, hackers and attackers. Major challenges include defense against disruptions and unauthorized changes in data. E-commerce is not free Small businesses still have to compete with the reputation of market leaders. 16

17 Limitations of E-Commerce (Contd.) Consumer search is neither cost effective nor efficient Consumers may need quality guarantees and assistance in search, adding to the eventual cost of the product or service. Fulfillment problems Business may grow rapidly and the infrastructure may not be able scale with the growth. Customer relations problems E-business requires customer loyalty to survive. 17

18 Limitations of E-Commerce (Contd.) Products people wont buy online For some products people like to road-test the product before making a purchase. Corporate vulnerability Corporations do web-farming to extract business intelligence from online marketing information of their competitors. Lack of blueprint for handling e-commerce Traditional corporate structures and procedures inhibit progress in e-commerce. Most corporations have significant shortage of e- literate executives. 18

19 Limitations of E-Commerce (Contd.) High-risk of Internet Startup Most Internet startups fail because of, Lack of sound business strategy, Disproportionate investment of time and resources, Inappropriate merchandise. 19

20 Value Chains in E-Commerce Organization of activities of a business so that each activity adds value to the total operation of the business. Competitive advantage is achieved when an organization links activities in its value chain more cost effectively and efficiently than its competitors. Activities should be linked such that valueadded (output) of one activity contributes to the input of another activity. 20

21 Activities of an organization can be divided into Primary activities: Activities that support primary activities and each other by providing purchased inputs, technology, human resources and other firm functions. Support activities: Activities involved in the physical creation of a product or service and its sale, transfer to the buyer and after sale assistance. 21

22 Primary Activities of value chain: 1. Inbound logistics: these are procurement activities vendor selection, comparative shopping, negotiating supply contracts and justin-time arrival of goods. 2. Operations: This is the actual conversion of raw materials received into finished products. In includes machining, packaging, assembly, equipment maintenance, testing, printing and facility operations. 22

23 3. Outbound logistics: This activity represents the actual storing, distributing and shipping of the final product. 4. Marketing and sales: It deals with the ultimate customer. It includes advertising, product promotion, sales management, identifying the product s customer base, and distribution channels. 5. Service: it focuses on after-sales service to the customer. It includes testing, maintenance, repairs, warranty work, and replacement parts. 23

24 Support Activities of value chain: 1. Corporate infrastructure: This activity is the backbone of the business unit. It includes general management, accounting, finance, planning, legal services, and quality management. 2. Human resources: This is the unique activity of matching the right people to the job. It involves recruitment, relation, career path development, compensation, training and development. 24

25 Technology development: This activity adds value in the way it improves the product and the business process in the primary activities. Procurement: This activity focuses on the purchasing function and how well it ensures the availability of quality raw material for production. 25

26 Figure: A generic e-commerce model 26

27 E-Commerce Integration Trend in e-commerce: Integration of the entire lifecycle From the time the consumer purchases on the website to the time the product is actually received. Therefore, it is a path of various links (departments) in the chain to work together for a common objective profitability and customer satisfaction. 27

28 The lifecycle focuses around three major e- commerce applications, Business to consumer (B2C) Performed on the Internet Business to business (B2B) Performed on the Internet and Extranet Business within business Performed on the Intranet. 28

29 Figure: Key elements of Internet, extranet and intranet e-commerce 29

30 Different types of e-commerce Business-to-business (B2B) Business-to-Consumer (B2C) Business-to-government (B2G) Consumer-to-consumer (C2C) Government to consumer (G2C) Government-to-business (G2B) ?next_slideshow=1 30

31 What is B2B e-commerce? B2B e-commerce is simply defined as e-commerce between companies. About 80% of e-commerce is of this type. Examples: Intel selling microprocessor to Dell Heinz selling ketchup to Mc-Donalds 31

32 What is B2C e-commerce? 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 32

33 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. 33

34 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 I selling a car to my neighbor. 34

35 G2C E-commerce This Model is also a part of e-governance. The objective of this model is to provide good and effective services to each citizen. The Government provides the following facilities to the citizens through website. Information of all government departments, Different welfare schemes, Different application forms to be used by the citizens. 35

36 G2B E-commerce Government-to-business (G2B) is a business model that refers to government providing services or information to business organization. Government uses B2G model website to approach business organizations. Such websites support auctions, tenders and application submission functionalities. 36

37 Supply Chain Management Integrating the networking and communication infrastructure between businesses and suppliers to ensure having the right product, in the right place, at the right time, at the right price, in the right condition. An integral part of the B2B framework. Transforms the way companies deal with suppliers, partners and customers to improve efficiency and profitability. 37

38 Beginnings of the Internet The internet is the infrastructure that links thousands of networks together. No one knows exactly how many computers are connected to the Internet. It is a information super highway that makes the information stored on thousands of computers worldwide for people everywhere. Transmit messages among servers using satellites, fiber-optic, cables, microwaves and other technologies. 38

39 Internet INTERNET 39

40 Information Transfer on the Internet Information to be transmitted over the Internet is segmented into packet. Each packet is transmitted independently of the others even if they belong to the same message. Packetisation of information to be communicated provided efficiency and flexibility. Packets were communicated from the source to the destination using a protocol. A protocol is a set of rules used by computers in communicating messages across a network 40

41 Making of WWW The WWW is a virtual space where the information transmits electronically across the world through the computer network using the hypertext. Hypertext: it is the text that contains keywords to connect to other documents. Such keywords, called links, are selected by the designer of the Web site. Hypertext for the Web can be generated with a language called HyperText Markup Language. 41

42 World Wide Web Technically, it is a cluster of software, protocols, and standards. It is an organization of files designed around a group of Internet servers programmed to handle requests from browser software on user terminals. Now web documents can link to other media on the Internet, such as images, video, audio and animated graphics. Browsers can invoke handler software for each different type of media. 42

43 Hierarchical Structure of Internet High Speed Backbone Networks Network Access Point NAP NAP Regional Nets Regional Nets Regional Nets Regional ISPs Regional ISPs Regional ISPs Local Nets Local Nets User User User User User User User User 43

44 Web Search Elements Browser A browser is a piece of software that allows to navigate the Web. Example: Chrome, Internet Explorer, Netscape, Opera etc. Technically, a browser is a Web client program that uses Hypertext Transfer Protocol (HTTP) to make requests to Web server throughout the Internet on behalf of the browser user. There are two types of browsers: 1. Text-only mode such as Lynx. 2. Graphic mode. 44

45 Search engines Search Engine A web site or a database with tools to generate that database and search its contents. Example: Google.com, Yahoo.com There are other definitions: A software program that collects and indexed Internet resources and provides a keyword. A Web-based system for searching the information available on the Web. An automated system that relies on a software agent 45

46 Two other components of a Web search engine. Web robots Collection parts of search engines that roam web sites, retrieve messages and sort, index and then download them one by one. Spiders A software tool that prowls the Web looking for new sites where specific information is likely to reside. 46

47 Internet Service Providers (ISPs) Companies that link users to the Internet. ISP offers a variety of services: 1. Linking consumers and businesses to the Internet. 2. Monitoring and maintaining customer web sites. 3. Providing network management and system integration 4. Providing backbone access services for other ISPs 5. Offering payment systems for online purchases 47

48 HTTP Web Fundamental Hyper-Text Transfer Protocol Allows transfer of requests for web pages from clients and the retrieved web pages from servers to clients for display. URL Uniform Resource Locator A name that represents the address of a specific web site. URL is divided into two parts Protocol, e.g., http, ftp, file. Resource, i.e., name of server and the file on the server. 48

49 Web Security Protocols There are two main security protocols. Secure Sockets Layer (SSL) A protocol for transmitting information in a secure manner over the Internet. S-HTTP Secure HTTP An extension of HTTP that provides various security features such as client server authentication. Also allows web clients and servers to specify privacy capabilities. 49

50 Definition of Network What is a network? A network is a connection between at least two computers for the purpose of sharing resources. All networks are based on the concept of sharing. Types of networks: Two types of networks: 1. Peer-to-peer network 2. Client/server network 50

51 Peer-to-peer network Computers in peer-to-peer networks are linked together as equals, with no centralized server or control. Any computer can share its resources with any other computer on the same network in any way and whenever it chooses to do so. A peer-to-peer setup connects fewer than 10 computers. Increasing number becomes impractical worse the performance. 51

52 Figure

53 Table

54 Client/server networks A server is simply a special-purpose computer and software designed for one function to address a client s request. A client is any computer or workstation connected to the server within a network. Main advantage of client/server network is centralized control over network resource. All programs or applications reside on the server. - is a multiuser environment. 54

55 Figure

56 Table

57 Packets and Protocols Packets: a sequence of bits that carries identifying information for transmitting the data as well as the data itself. A single packet contains a header to keep track of the actual data it carries. Size bytes. 57

58 Protocols: Protocols are pieces of software that run on every node or computer and allow every pair of computers to communicate directly. A rule that governs how communication should be conducted between two parties, two computers or a source and a destination. 58

59 Design considerations Consider several factors: Location where will the network be installed? Capacity What is the optimum traffic capacity of the network? Distance limitation What is the distance of the farthest PC to the server? Cost What is the estimated cost of the proposed network installation? Potential growth - How easily and how well can the network be expanded? Security How secure is the proposed network? 59