Essentials of E-Business & E-Commerce Pokhara University : BBA, BBA-BI, BBA-TT & BCIS Tribhuvan University : BBA & BScCSIT
Contents Unit 1 Introduction Background... 1 Introduction to E-Business... 2 Global Business... 2 The Importance of Going Global... 3 Methods of Entry into Global Markets... 4 Concept of e-business... 4 Nature and Uses of E-Business System... 7 Scope and Components of E-Business... 10 Impact of E-Business Technology... 12 E-business Challenges... 13 The History and Development of e-business... 15 Electronic Data Recording... 15 Internet... 15 Communication... 15 Digital Products... 16 Existence of Ecommerce and E-business... 16 Garners Hype Cycle for Digital Commerce... 17 Disruptive and Continuous Innovation Technology... 19 Advantages of E-business... 20 Introduction to E-business Models... 21 E-Business IT Risks... 23 Legal Risks... 24 Managing Risk... 26 Transition from Traditional Business to E-Business... 27 Forces Driving Transformation to E-business... 28 Information and Data Handling in E-business... 30 Contributors for E-business Success... 31 Facilitators for Business Processes... 33 E-business and E-commerce... 33 E-business verses E-commerce... 35 Key Differences Between e-commerce and e-business... 36 Role of E-commerce in E-business-Issues and Prospects... 37 Contribution of E-business Technologies to Economic Growth and Productivity... 38 Contribution of e-business to Competitiveness... 39 Future of Ecommerce and E-business... 41 Introduction to E-Commerce... 41 Overview of Traditional Commerce... 41
Introduction to E-commerce... 42 Define Ecommerce on Different Perspective... 44 Functions of E-commerce... 46 E-commerce Applications... 47 A Brief History of Electronic Commerce... 47 Recent Trends in E-commerce... 48 E-Commerce Vs Traditional Commerce... 50 Impact of E-Commerce on Business and Consumers... 51 Benefits of E-commerce... 51 Limitation of E-commerce... 53 E-Commerce Terminologies and Fundamentals... 54 The Digital Enterprise... 54 Digital Economy... 54 Digital Divide in Business... 55 Brick to Click Mortar System... 55 E-tailing... 56 Procurement... 57 Spam... 58 Search Engines and the Internet... 58 Spamdexing... 58 Mobile Commerce... 59 Concept... 59 Components of M-Commerce... 59 Application of M-Commerce... 60 Why M-Commerce?... 61 Advantages and Disadvantages of MCommerce... 61 Difference between m-commerce and e-commerce... 62 Technology used on the Mobile Commerce... 63 Wireless Application Protocol (WAP)... 64 Web Clipping on a PDA... 65 Mobile Data Communications... 65 Some Popular Terms used on M-Commerce... 66 SIM (Subscriber Identity Module)... 66 R-UIM (Removable User Identity Module)... 66 3G (3 rd generation)... 67 4G Fourth Generation... 67 CDMA (Code-Division Multiple Access)... 67 MMS (Multimedia Message Service)... 67 SMS (Short Message Service)... 68 GPS (Global Positioning System)... 68 T-Commerce... 68 E- Commerce Framework... 69 Elements of E-Commerce Applications... 70 Information Delivery Servers... 70 Information Delivery/Transport and Ecommerce Application... 71 Consumer Access Devices... 71
The Network Infrastructure for Ecommerce... 72 Recent Trends in E-Commerce... 72 Workshop... 74 References... 76 Unit 2 A Business Model E-products and E-services... 78 Introduction to E-business Models... 78 E-products and E-services Business Model... 80 Types of Business Model... 81 E-Business Model Based on the Relationship of Business Parties... 81 Business to consumer (B2C) Model... 82 Meaning of B2C... 83 How does B2C works?... 85 B2C Models... 86 Online Services... 87 Capabilities and Functionalities of B2C Model... 87 Challenges in Implementing B2C Initiative... 88 Business to Business (B2B) Model... 89 Definition of B2B Commerce... 90 Types of B2B Markets... 90 Types of emarkets... 92 The ehub Concept... 92 Capabilities and Functionalities of emarkets... 93 Challenges in Implementing B2B Initiative... 94 Consumer to consumer (C2C) Model... 97 Consumer to Business (C2B)... 99 What is e Governance?... 101 An E-governance Model... 102 The Four Phases... 103 Online Services provided through E governance... 104 E-business Type based on the Relationship of Transaction Type... 105 Brokerage Model... 105 Aggregator Model... 108 Advertising Model... 108 Infomediary Model... 110 Merchant Model... 112 Manufacturer Model... 113 Affiliate Model... 113 Community Model... 113 Subscription Model... 114 Utility Model... 114 Value Chain Model... 115 Workshop... 117 References... 118
Unit 3 E-business Technology Introduction... 120 Features of E-Business Technology... 121 E-business Technology Infrastructure Components... 121 E-business Hardware Technology... 123 Consumer Access Devices... 123 Information Repository Devices... 124 Information Security System Devices... 128 E-business Software Applications Technology... 129 ERP Software... 129 Operating System Software... 130 Web Browsers Software... 131 Web Design and Development Software... 131 Internet-access Software Applications... 131 Web 2.0... 131 Blogs and Blogging... 132 Electronic Mail or e-mail... 132 Feeds... 132 IPTV (Internet TV)... 132 Voice Over IP (VoIP)... 132 Widgets... 133 Atomization... 133 Internet and World Wide Web Technology... 135 The World Wide Web... 135 Hypertext... 135 Hypertext Transfer Protocol... 136 The Web Browser... 136 Internet Search Engines... 136 Uniform Resource Locator... 136 Hypertext Mark-up Language... 137 Multimedia... 137 Java, Applets, JavaScript and Interactivity... 137 Database Management Technology... 138 Customer Data... 138 Product Data... 138 Sales Data... 139 Marketing Data... 139 Types of Database Management System used in E-business... 139 Distributed Databases... 139 Centralized Database System... 140 Hypermedia Database... 140 Online Payment Technology... 142 IT/IS Evaluation and e-business... 143 The Social Consequences of E-business Technologies... 145
The Impact of E-business Technologies on Social Relationship and Communities... 147 Workshop... 151 References... 153 Unit 4 E-business and Network Security E-Business threats and Security Technology... 154 Threats from Malicious Code... 155 Other Forms of Security Break... 155 Network Security... 157 The Main Threats to the Networking System... 157 Client Server Network Security... 158 Emerging Client Server Security Threats... 159 Threats to Local Computing (Software Agents and Malicious Code Threat)... 160 Threats to Servers... 160 Firewalls... 161 Types of Firewalls... 162 Data and Message Security... 164 Data Security... 165 Message Security... 165 Encryption as the Basis for Data and Message Security... 167 Encryption and Decryption... 168 Types of Cryptographic Algorithms... 168 Digital Signatures... 169 Certificates and Authentication... 171 Digital Signature and Certificate of Authority Practices in Nepal... 176 Encrypted Documents and Electronic Mail... 177 Privacy Enhanced Mail Standard... 178 Secure Socket Layer (SSL)... 178 SSL between Application Protocols and TCP/IP... 179 VPN (Virtual Private Network)... 180 Workshop... 182 References... 183 Unit 5 E-contracting & Electronic Data Interchange Introduction... 185 Electronic Contract... 186 Stages of E-Contracting Process... 186 Contracting Process on the basis of Business Phases... 186 Contracting Process on the basis of Legal Phases... 187 Generic Services for E-contracting... 189 Information... 191 The Electronic Negotiation Process... 191
E-contract Archiving... 192 Enforcement... 193 Reconciliation... 193 E-Contract Framework... 193 Contract Subject... 194 Content and Structure... 194 Type of Agreement... 194 Contract Parties... 195 Processes... 195 Technology... 195 Essentials of an Electronic Contract... 196 Business Value of E-contracting... 197 Financial Values... 197 Strategic Values... 198 Stakeholder Values... 198 Risks... 199 Types of E-Contracting... 199 E-Contract Paradigm... 201 The E-contracting 4W Framework... 202 Structure of E-contracting... 203 Security in E-Contracting... 206 Security Goals... 206 Security Mechanism... 207 Digital Signatures... 208 Legal Rights of the Information Society... 209 Introduction to Electronic Data Interchange (EDI)... 210 What is EDI?... 210 Problems with the Traditional Information Interchange... 211 Difference in Paper based Business and EDI based Business... 212 How does EDI Solve the Problems... 213 Technical Requirements for EDI... 215 EDI Standards... 215 EDI Architecture... 218 Action Plan for Implementing EDI... 218 How does EDI work... 219 Value Aided Network (VANs) and EDI... 220 Comparing EDI and the Internet... 220 EDI and Electronic Commerce... 221 EDI and Email... 221 EDI over the Internet... 222 Costs in EDI Implementation... 223 Implementation of EDI... 224 The Future of EDI... 225 Applications of EDI... 226 EDI Application on Business... 227 International trade and EDI... 227
Financial EDI... 228 Financial EDI standard... 228 Health Care and Insurance EDI... 228 Manufacturing / Retail Procurement using EDI... 229 Quick Response and EDI... 229 Legal Issues... 229 Security Issues in EDI... 230 What is Middleware?... 230 Workshop... 233 Unit 6 Electronic Payment System Conventional Payment Mechanisms... 234 Limitations of Traditional Payment Systems in the Context of Online Payments 235 Electronic Payment System... 236 Advantages and Disadvantages of Electronic Payment System... 237 Electronic Payment Process... 238 Characteristics of Payment System... 239 Types of Electronic Payment System... 239 Electronic Funds Transfer at Point of Sale (EFT/POS)... 240 Bank Networks... 240 Direct Data Entry Transactions... 241 Online Electronic Payment System... 242 Electronic Cash... 242 Electronic Cheque... 249 Electronic Credit Cards... 251 Smart Cards... 253 SET (Secure Electronic Transaction)... 254 SET Services... 255 SET Participants... 255 Requirements for a Payment System... 255 Security Requirements... 255 Privacy Requirements... 256 Implementation Requirements... 257 Other Requirements... 257 Risk in E Payment System... 258 Designing Electronic Payment Systems... 259 Mobile Payment (M-Payment)... 261 Comparison between the credit card, e-cash, echeque and smart cards 262 Digital Wallet... 263 Features... 264 Advantages of digital wallet... 265 Limitations of digital wallet... 265 E-payment System in Nepalese Banks... 265 Cash Payment... 266 Cheque/Bank Draft Payment... 266
Telegraphic Transfer (TT) Payment... 266 Cards Payment... 266 Internet (Online)... 266 Mobile Payments... 267 SWIFT... 267 Remittance... 267 Inter-bank... 267 Automated Clearing House... 267 Payment Instruction/Standing Order/Debit-Credit Authority... 268 Postal/Money Order... 268 Barter System... 268 Opportunities and Challenges of E-payment in Nepal... 268 Infrastructure and Networks... 268 Financial and Economical... 269 Socio- Cultural... 269 Society for Worldwide Interbank Financial Telecommunication (SWIFT) 270 Workshop... 271 References... 272 Unit 7 Digital Marketing Concept... 274 Advantages of Digital Marketing... 275 Disadvantages of Digital Marketing... 276 Comparisons between the Digital and the Traditional Marketing... 277 Digital-Marketing Plan... 277 The Effects of e-business Technologies on Marketing Strategy... 278 Customer Retention and e-crm... 279 Stages of ecrm... 280 Marketing Applications of CRM... 281 Types of ECRM... 281 Benefits of E-CRM... 281 Measuring the Extent of Digital Marketing Activity... 282 Traffic Metrics... 283 Conversion Metrics... 283 Revenue Metrics... 284 Online and Offline Marketing... 285 Online Marketing... 285 Offline Marketing... 286 Switching from Offline to Online Marketing... 286 Digital Marketing Tools... 288 Internet Marketing... 289 The Origins of Internet Marketing... 290 Internet Marketing Today... 290 The Future of Internet Marketing... 291 Future Trends of Internet Marketing... 292
Online Equivalents of Traditional Techniques... 293 Email Marketing... 293 Advantages of Email Marketing... 294 Drawbacks of Email Marketing... 294 Online Advertising and Pay per Click... 295 New versus Old Media... 295 Advantages of Online Advertising... 296 Pay Per Click (PPC)... 296 Search Engine Optimization... 297 Search Engines... 298 Benefits of Search Engine Optimization (SEO)... 299 Social Media and Viral Marketing... 299 A brief history of social networking... 300 Types of Social Media... 303 Aggregators... 304 Social Sharing... 304 Collaborative Creation... 304 Converging Media... 305 Why do people use it?... 305 Communicating on Social Media... 306 Rules for Social Media Communication... 306 Social Networking Personalities... 307 Viral Marketing... 307 Organic versus Controlled Viral Marketing... 308 Alternate Reality Games... 308 Astroturfing... 308 Steps of a Viral Campaign... 309 Benefits... 310 Risks and challenges... 310 Mobile Marketing... 310 Introduction... 310 A brief history of mobile devices and marketing... 310 Benefits of Mobile Marketing... 312 Mobile Marketing Techniques... 312 Workshop... 314 References... 316 Unit 8 E-business and Operation Management E-business and Operations Management Principles... 317 Electronic Logistic Management... 319 How e-logistics Differ from Traditional Logistics... 321 E-Supply Chain Management... 321 Purchasing and Procurement... 322 Procurement... 322 Steps in the Procurement Process... 322
Purchasing... 323 Objectives of the Purchasing... 323 Steps in the Purchasing Process... 324 Difference between Purchase and Procurement... 325 E-Procurement... 326 E-procurement Model-Market Solution... 328 Buy-side e-procurement... 328 Sell-side e-procurement... 329 Marketplaces Model... 330 Auctions and Reverse Auctions e-procurement Model... 331 Auctions... 331 Reverse Auctions... 332 Independent Portal Model and Online Trading Communities... 334 Procurement Model Selection... 334 Overview of e-procurement Process... 335 E-tendering... 336 E-Cataloguing... 337 E-ordering and E-invoicing... 337 E-marketplaces... 338 Marketplace Deliverables... 338 Catalogue Management... 339 Market for eprocurement Service Provider... 340 Security Issues and Legal Affairs... 342 Security Issues... 342 E-Procurent Initiations in Nepal... 342 E-Procurement: Vision of Nepal Government... 343 E-Procurement: Strategy... 344 E-Procurement: Objectives... 344 E-Procurement Practices in Nepal... 345 Legal Framework... 347 Budgetary Provision... 348 Accounting and Auditing Principle... 349 Procedure and Practice... 349 Workshop... 351 References... 352 Unit 9 Online Distribution Background... 354 Components of a Distribution System... 355 Factors Affecting for Selection of Distribution Channel... 356 Environmental Factors... 357 Market Factors... 357 Product Factors... 358 Manufacturer Factors... 358 Intermediaries... 358
Distribution Channel Design... 358 Types of Distribution Logistics... 360 Online Distribution... 361 Conventional Offline Distribution... 362 Hybrid Distribution... 364 Reasons for implementing certain hybrid distributional systems... 366 Electronic Software Distribution (ESD)... 367 Architecture for Software Distribution... 367 ESD Functions and Services... 368 Protection through Digital Watermarks... 369 Workshop... 370 References... 371 Unit 10 E-environment and Business Plan Business Environment... 373 Internal Environment Factors... 373 External Marketing Environment... 374 Micro Environmental Factors... 374 Macro Environmental Factors... 374 Electronic Business Environment (e-environment)... 376 SLEPT Analysis... 377 Economic and Competitive Factors... 379 Technological Innovation and Technology Assessment... 379 Approaches to Identifying Emerging Technology... 382 Business Plan... 384 Workshop... 401 Project Work... 402 References... 402 Syllabus... 403 Questions Collection... 409