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EMERGING MODES
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LEARNING OBJECTIVES
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Let us do some shopping, Rita woke up Rekha, her friend from the homevillage who had come to Delhi during the vacations. At this hour well past
midnight, said Rekha rubbing her eyes, Who would be sitting with his shop
open for you? Oh! Perhaps I could not convey it properly. W e are not going
anywhere! I am talking about online shopping over the internet! told Rita.
Oh yes! I have heard of online shopping, but have never done any, Rekha
said, What would they be selling over the inter net, how will they deliver,
What about payment and why is it that internet has not yet become as
popular in the villages? As Rekha was grappling with these questions, Rita
had already logged on to one of Indias largest online shopping mall.
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5.1 I NTRODUCTION
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5.2.1 Scope of e-Business
B2B
transactions
B2C
Transactions
Firm
Suppliers
S1
Purchase
S2
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Customers
Marketing
R&D
Finance
HR
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Cn
C2C
Sn
Figure 5.1
C1
C2
Production
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Intra-firm
B transactions
Firm as a link between Network of Suppliers and Customers
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History of e-commerce
e-commerce began before personal computers were prevalent and has grown
into a multi-billion dollar industry, but where did it come from? By looking at the
evolution of e-commerce, it will be easier to judge its trends for the future.
Year
Event
1984
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1994
1995
1998
1999
2000
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American Standard Code for Information Interchange (ASCII): A widely used and
internationally recognised coding system to represent characters in a standard way.
ASCII is commonly used for storage within computer systems, and for exchange between
them.
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Browser: The generic term for software programs that retrieve, display, and print
information on World Wide Web. The most popular browsers are Microsoft Internet Explor er,
Netscape Navigator and Mosaic. Mosaic was the first browser to introduce graphics.
Previously, users were only allowed to view the text of web pages.
***
Secure Socket Layer (SSL): SSL was designed by Netscape for use in electronic commerce
for transactions involving confidential information such as credit card numbers. Secure
Socket Layer uses a system of public and private key authentication combined with other
schemes to verify electronic signatures. The ability to conduct secure and confidential
transactions over the internet is critical to the success of electronic commerce. Public key is
the password that the sender uses to encrypt the data and the private key is used by the
receiver of a message to decrypt the data.
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ATM speeds up withdrawal of Money
e-commerce greatly facilitates and speeds up the entire B2C process. Withdrawal
of ones own money from banks was, for example, a tedious process in the past.
One had to go through a series of procedural formalities before he or she was
able to get the payment. After the introduction of ATMs, all that is fast becoming
history now. The first thing that occurs is that the customer is able to withdraw
his money, and the rest of the back-end processes take place later.
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Acumin Corp. (US) Customises vitamin pills specified by using the Internet.
Customers fill in lifestyle and health questionnaire.
Dell (US)
Green Mountain
Energy Resources
(US)
Levi Jeans
(Original Spin)
(US)
N.V. Nutsbedrijf
Westland
(Newzealand)
National Bicycle
(Japan)
Simon and
Schuster (US)
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Skyway (US)
SmithKline
Beecham (US)
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Does it
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eBays Trust and Safety team is responsible for keeping the marketplace a safe,
well-lit place for people ar ound the world to trade with one other.
Actively working to enable members to trade safely, eBay fosters trust between
members through the development and enforcement of rules and policies, the
creation of reputation-building programs, and the prevention of fraud.
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eBay also works behind-the-scenes to prevent fraud and, in the event a problem
occurs, eBay proactively works with law enforcement and government agencies
throughout the world to enforce its policies. Rooted in the values of the marketplace,
eBays policies are aimed at offering a level playing field, encouraging open, honest,
and accountable transactions, and creating economic opportunities for everyone.
To help the community trade safely and build trust with one another, eBay of fers
the following tools, programs, and resources:
eBay Feedback
eBay feedback is each users reputation on eBay. Through positive, negative, and
neutral ratings and comments, each eBay member has a Feedback score. All
sellers display this score in the Seller Information box of the item listing page.
eBay Feedback fosters trust between people by acting as both an incentive to do
the right thing and as a mark of distinction for those who conduct transactions
with respect, honesty, and fairness.
Buyer Protection
Users who see the PayPal Buyer Protection shield buy with confidence knowing
that their purchase is covered up to $500 at no additional cost. For users who are
not using PayPal as their payment system, there is also the eBay Standard
Purchase Protection Program which provides up to $200 coverage (minus a $25
processing cost) for either items that are not received or items that are not as
described in the listing.
Spoof (Fraudulent) Web Site Protection
The eBay Toolbar with Account Guard enables eBay members to protect their
accounts by indicating when they are on an eBay or PayPal site and warning
them when they are on a potentially fraudulent, or spoof, Web site. In addition,
eBay helps users prevent and combat fraud by conducting online tutorials on
spoof email and educating members on how to report issues to spoof@ebay.com.
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Box A
Some e-Business Applications
e-Procurement: It involves internet-based sales transactions between business
firms, including both, reverse auctions that facilitate online trade between a
single business purchaser and many sellers, and, digital marketplaces that
facilitate online trading between multiple buyers and sellers.
e-Bidding/e-Auction: Most shopping sites have Quote your price whereby you
can bid for the goods and services (such as airline tickets!). It also includes
e-tendering whereby one may submit tender quotations online.
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Table 5.1
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Basis of distinction
Traditional business
e-business
Difficult
Simple
Physical presence
Required
Not required
Locational requirements
None
Cost of setting up
High
Low as no requirement of
physical facilities
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Operating cost
Direct
Non-hierarchical,
allowing direct vertical,
horizontal and diagonal
communication
Long
Instantaneous
Horizontal/flat due to
directness of command
and communication.
Simultaneous
(concurrence) different
processes. Business
process cycle is,
therefore, shorter
Much more
Less
Much more
Less
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Shrinking
Much, as IT sector is
among the topmost
priorities of the
gover nment
Technically and
professionally qualified
personnel needed
T ransaction risk
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Legal recognition of digital signatures (Section 5): Where any law provides
that information or any other matter shall be authenticated by affixing the
signature or any document shall be signed or bear the signature of any person,
hence notwithstanding anything contained in such law, such requirement shall
be deemed to have been satisfied, if such information or matter is authenticated
by means of digital signature affixed in such a manner as may be prescribed by
the Central Government.
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Even if telecommunication systems were in place, most of the worlds poor would
still be excluded from the information revolution because of illiteracy and a lack
of basic computer skills. In Benin, for example, more than 60 per cent of
the population is illiterate. The other 40 per cent are similarly out of luck.
Four -fifths of the Websites are in English, a language understood by only one in
10 people on the planet.
Source: http://www.news.bbc.co.uk/.../special_report/1999/10/
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Table 5.2
Name
Number
of kiosks
Bhoomi
e-chaupal
30
3500
War na
Akshaya
Tara Haat
information
Drishtee
72
617
18
Activity
Government of Karnataka
ITC
Land title
Procurement
Cane Factory
e-literacy
e-training, market
Digital Partners
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Milk Coops
CIC (NE)
90
5000
30
National Dairy
Development Board
Milk Collection
NIC
Internet Access
Source: IIM, Workshop on Scaling up ICT for Poverty Alleviation in India, Ahmedabad,
February 26-27, 2004.
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5.6 S E C U R I T Y A N D S A F E T Y O F
e -TRANSACTIONS : e-B USINESS
RISKS
Online transactions, unlike arms
length transactions in physical
exchange, are prone to a number of
risks. Risk refers to the probability of
any mishappening that can result
into financial, reputational or
psychological losses to the parties
involved in a transaction. Because of
greater probability of such risks in
the case of online transactions,
security and safety issues becomes
the most crucial concern in
e-business. One may broadly discuss
these issues under three headings:
transaction risks, data storage
and transmission risks, and
threat to intellectual property and
privacy risks.
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Exhibit 5.1
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Notes: 1. Typing of URL address in the address window of the browser leads one to the addressees
home page, in this case indiatimes.com. From there one can move on to Shopping. Home page
means the introductory or menu page of a website. A home page usually contains the sites name
and a directory of its contents. All other pages on a server are usually accessible by following links
from the home page. 2. URL, i.e., Uniform Resource Locator refers to a world wide web address
that specifies a specific site, page, graphic, or document on the internet. It is www.indiatimes.com
in the present case.
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Figure 5.3
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Source: www.cygnusindia.com
Figure 5.4
Scope of Outsourcing
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Figure 5.5
Anatomy of Outsourcing
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Key Terms
e-Business
Virus
e-Commerce
Browser
Online trading
e-Trading
e-Procurement
e-Bidding
e-Cash
Call Centres
Verticals
Horizontals
Sweat-shopping
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SUMMARY
The world of business is changing. e-business and outsourcing are the two
most obvious expressions of this change. The trigger for the change owes
its origin to both internal and external forces. Internally, it is the business
firms own quest for improvement and efficiency that has propelled it into
e-business and outsourcing. Externally, the ever mounting competitive
pressures and ever demanding customers have been the force behind the
change.
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Apart from becoming digital, the firms are also resorting to a departure
from the erstwhile do it all by yourself mindset. They are increasingly
contracting out manufacturing, R and D as well as of business processes
irrespective of whether these are IT enabled or not. India is riding high on
the global outsourcing business and has gained considerably in terms
of employment generation, capability building and contribution to exports
and GDP.
Together, the two trends of e-business and outsourcing are reshaping the
way business is and will be conducted. Interestingly, both e-business and
outsourcing are continuing to evolve, and that is why these are referred to
as the emerging modes of business.
EXERCISES
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T ick mark (9) the most appropriate answer to the following questions
1. e-commerce does not include
a.
b.
c.
d.
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2. Outsourcing
a.
b.
c.
d.
Includes off-shoring
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b.
Cheques
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e-Cash
Online bidding
b.
Online procurement
Online trading
d.
Contract R&D
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Projects/Assignments
1. Compare and contrast the products and their prices available on the
internet and in retail shops. Is the quality, customer satisfaction and
other factors the same?
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