E-COMMERCE

&
E-BUSINESS

Graded
Assignment-I

Submitted to:

Submitted by:

Prof. Ankita Soni

Dipak kumar sah

Associate Professor

BBA 4th Sem

Q1. What is E- Commerce? Explain its importance in current scenario.

E-commerce is short for electronic commerce. It is similar to traditional commerce system which involves
the activities of selling and buying, but it perform these operations using any electronic medium like, TV,
fax, radio or internet. Today internet has captured all the e-trade demand with its comparatively greater
features, so here we will consider only internet as an e-commerce source.
Following are the benefits of e-commerce in current scenario which is given below:
Benefits to Organization

Expends the marketplace to national and international markets.

Decrease the cost of creating, processing, distributing, storing and retrieving paper-based
information.
Allows reduced inventories and overhead by facilitating "pull" type supply chain management.
The pull type processing allows for customization of products and services which provides
competitive advantages to its implementers.
Reduce the time between the outlay of capital and the receipt of products and services.
Support Business Processes Reengineering (BPR) efforts.
Lowers telecommunication cost the internet is much cheaper than Value Added Networks (VANs).

Benefits to Society

Enables more individual 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 the poor ones.
Enables people in Third World countries and rural areas to enjoy products and services which
otherwise are not available to them.
Facilities delivery of public services at reduced cost, increases effectiveness, and/or improves
quality.

Benefits to Consumer

Enables customers to shop or do other transactions 24 hours a day, all year round from almost any
location.
Provides customers with more choices.
Provides customers with less expensive products and services by allowing them to shop in many
places and conduct quick comparisons.
Allows quick delivery of products and services in some cases, especially with digitized products.
Customers can receive relevant and detailed information in seconds; rather than in days or weeks.
Makes it possible to participate in virtual auctions.
Allows customers to interact with other customers in electronic communities and exchange ideas as
well as compare experiences.
Electronic commerce facilitates competition, which results in substantial discounts.

Q2. Name various business applications of E- Commerce.

There are two basic categories of e-commerce on the basis which various applications are:
1) Business-to-Business (B2B)
E-commerce plays an important role in enhancing and transforming relationships between and among
businesses.
Some B2B applications are:
Supplier Management: Electronic applications in this area aid in expediting business partnerships through
the reduction of purchase order (PO) processing costs and cycle times, and by maximizing the number of
POs processed with fewer people.
Inventory Management: Electronic applications make the order-ship bill cycle shorter. For instance, if most
of a business's partners are linked electronically, any information sent by mail can be transmitted instantly.
Businesses can easily keep track of their documents to make sure that they were received. Such a system
improves auditing capabilities, and helps reduce inventory levels, improve inventory turns, and eliminate
out-of-stock occurrences.
Distribution Management: Electronic-based applications make the transmission of shipping documents a lot
easier and faster. Shipping documents include bills of lading, purchase orders, advance ship notices, and
manifest claims. E-commerce also enables more efficient resource management by certifying that
documents contain more accurate data.
Channel Management: E-commerce allows for speedier dissemination of information regarding changes in
operational conditions to trading partners. Technical, product and pricing information can be posted with
much ease on electronic bulletin boards.
Payment Management: An electronic payment system allows for a more efficient payment management
system by minimizing clerical errors, increasing the speed of computing invoices, and reducing transaction
fees and costs.

2) Business-to-Consumer (B2C)
Business-to-Consumer e-commerce involves customers gathering information, purchasing, and receiving
products over an electronic network.
The consumer uses electronic commerce in the following economic transactions:
Purchasing products and information: Electronic applications make it possible for consumers to look up
online information about existing and new products/services.
Personal finance management: In this field, electronic applications aid the consumers in managing
investments and personal finances through the use of online banking tools. Chow.net is a good example of
B2C electronic commerce application, particularly of purchasing products online.

Q3. Explain the process of E- payment system.

Following are the process of e-payment systems:

Registration: This phase involves the registration of the payer and the payee with the issuer and acquirer
respectively. Most electronic payments designed require registration of payers and payees with their
corresponding banks so there is a link between their identities and their accounts held at the bank.
Invoicing: In this phase, the payee obtains an invoice for payment from the payee. This is accomplished by
either browsing and selecting products for purchase from the merchants (payees) website in case of
purchases made through the internet or obtaining an electronic invoice using other electronic communication
medium like e-mail. This phase typically is performed in an unsecured environment and normally excluded
while designing payment protocols. The importance of this phase is that, it sets the mandatory and optional
data variables that should be included in a payment protocol.
Payment selection and processing: In this phase the payer selects type of payment, (card based, e-cash, echeque, etc.,) based on the type of payment the payee accepts. Based on the selection, the payer then sends
the relevant payment details like account number, unique identifiers of the payer to the payee along with
accepted amount based on the invoice. Certain protocols might also require the payer to obtain preauthorized
token (like bank drafts) from the issuer before the payer sending the payment information to the payee.
Payment authorization and confirmation: In this phase, the acquirer on receiving payment details from
the payee authorizes the payment and issues a receipt containing the success or failure of the payment to the
payee. The payee based on the message may also issue a receipt of payment to the payer.

Q4. State the significance of OSI model in networking.

The OSI reference model is the primary model for network communications. The early development of
LANs, MANs, and WANs was confused in many ways. The early 1980 saw great increases in the number
and sizes of networks. As companies realized that they could save money and gain productivity by using
networking technology, they added networks and expanded existing networks as rapidly as new network
technologies and products were introduced. To assist in this process, the OSI Reference Model separates the
network communication process into seven simple layers.
Following are the significance of OSI model:
Reduces complexity:
It breaks network communication process into smaller and simpler components, thus aiding component
development, design, and troubleshooting.
Standardizes interfaces:
It standardizes network components to allow multiple vendor development and support.
Facilitates modular engineering:
It allows different types of network hardware and software to communicate with each other.
Interoperability between Vendors:
It allows multiple-vendor development through standardization of network components. Defines the process
for connecting two layers together, promoting interoperability between vendors It Allows vendors to
compartmentalize their design efforts to fit a modular design, which eases implementations and simplifies
troubleshooting.
Ensures interoperable technology:
It prevents changes in one layer from affecting the other layers, allowing for quicker development.
Accelerates evolution:
It provides for effective updates and improvements to individual components without affecting other
components or having to rewrite the entire protocol.
Simplifies teaching and learning:
It breaks network communication into smaller components to make learning easier. Provides a teaching tool
to help network administrators understand the communication process used between networking
components.