E-Commerce

Unit-2 EC Framework, Models and Components

E-commerce Framework
E-commerce applications are built on existing internet infrastructures. The framework elements are:
Common business services: facilitates the buying and selling process. Messaging & Information processing: a means of sending and retrieving information. Multimedia content and network publishing: creates a product & means to communicate about it Information Superhighway (foundation): physical connection everywhere to travel e-commerce traffic
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E-commerce framework
Two entities to support all e-commerce applications and infrastructure:
Public policy: govern such issues as universal access, privacy, & information pricing Technical standards: dictate the nature of information publishing, user interfaces & transport in the interest of compatibility across the entire network
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Essential e-commerce process architecture

Access Control and Security

E-commerce processes must establish mutual trust and secure access between the parties in an e-commerce transaction By authenticating users, authorizing access, and enforcing security features

Profiling and Personalizing

Gather data on you and your website behavior and choices Build electronic profiles of your characteristics and preferences Profiles are used to recognize you and provide you with a personalized view of the contents of the site with product recommendations and personalized advertising One-to-one marketing strategy

Search Management
Search processes that helps customers find the specific product or service they want to evaluate or buy

Content and Catalog Management

Content Management software that helps ecommerce companies develop, generate, deliver, update, and archive text data and multimedia information at e-commerce websites Catalog Management software that helps generate and manage catalog content

May support customer self-service and masscustomization of products, e.g., Dell Computer configuration management

Workflow Management
Software that helps employees electronically collaborate to accomplish structured work tasks within knowledgebased business processes Ensure proper transactions, decisions, and work activities are performed and the correct data and documents are delivered to the right employee, customer, or supplier

Catalog/content management and workflow example

Event Notification
Most e-commerce applications are eventdriven Respond to events such as customers first website access, payment, delivery Event notification software monitors ecommerce processes Records all relevant events including problem situations Notifies all involved stakeholders

Collaboration and Trading

Processes that support the vital collaboration arrangements and trading services Needed by customers, suppliers, and other stakeholders Online communities of interest
E-mail, chat, and discussion groups Enhance customer service and build customer loyalty

e-Commerce Success Factors

Selection and Value
Attractive product selections, competitive prices, satisfaction guarantees, and customer support after the sale

Performance and Service

Fast, easy navigation, shopping, and purchasing, and prompt shipping and delivery

Look and Feel

Attractive web storefront, website shipping areas, multimedia product catalog pages, and shopping features

e-Commerce Success Factors

Advertising and Incentives
Targeted web page advertising and e-mail promotions, discounts and special offers, including advertising at affiliate sites

e-Commerce Success Factors

Personal Attention
Personal web pages, personalized product recommendations, Web advertising and e-mail notices, and interactive support for all customers

Community Relationships
Virtual communities of customers, suppliers, company representatives, and others via newsgroups, chat rooms, and links to related sites

Security and Reliability

Security of customer information and website transactions, trustworthy product information, and reliable order fulfillment

Web Store Requirements

Developing a Web Store

Build website
Use simple website design tools Predesigned templates Build your own website or use outside contractor

Market website to attract visitors and transform them into loyal customers

Serving Customers
Serve customers by creating user profiles, personal Web pages and promotions that help develop a one-to-one relationship Transact with customers by providing an attractive, friendly, and efficient Web store Support customers with
Self-help menus, tutorials, FAQs E-mail correspondence with customer service representatives

Managing a Web Store

Manage both the business and the website
Record and analyze traffic, inventory and sales Link to accounting system

Operate twenty-four hours a day, seven days a week Protect transactions and customer records, use firewalls, and repel hacker attacks

E-Commerce Business Models

Push vs Pull Models
Push Model examples google adsense Pull Model examples etailing

Common E-Commerce business Models

Typical E-Commerce Business Models

Online direct marketing Electronic tendering systems
tendering (reverse auction) Model in which a buyer requests would-be sellers to submit bids; the lowest bidder wins name-your-own-price model Model in which a buyer sets the price he or she is willing to pay and invites sellers to supply the good or service at that price

 Find the best price

affiliate marketing An arrangement whereby a marketing partner (a business, an organization, or even an individual) refers consumers to the selling companys Web site viral marketing Word-of-mouth marketing in which customers promote a product or service to friends or other people

 group purchasing
Quantity purchasing that enables groups of purchasers to obtain a discount price on the products purchased

e-co-ops
Another name for online group purchasing organizations

 Online auctions Product and service customization

customization Creation of a product or service according to the buyers specifications

Electronic marketplaces and exchanges Information brokers

 Bartering Deep discounting Value-chain integrators

Value chain is a string of companies working together to satisfy market demands. The value chain typically consists of one or a few primary value (product or service) suppliers and many other suppliers that add on to the value that is ultimately presented to the buying public. Eg: The businesses who buy personal computer software may spend far more on the add-on software than on the essential operating system that is the de facto standard for running the software. To the extent that companies standardize on Windows, Microsoft is said to control a value chain.

Value-chain service providers Supply chain improvers

Multimedia Content for E-commerce Applications

Multimedia content can be considered both fuel and traffic for e-commerce applications. The technical definition of multimedia is the use of digital data in more than one format, such as the combination of text, audio, video, and graphics in a computer file/document. Multimedia mimics the natural way people communicate. Its purpose is to combine the interactivity of a userfriendly interface with multiple forms of content. Success of ecommerce applications depends upon the variety and innovativeness of multimedia content and packaging. However, access to multimedia content depends on the hardware capabilities of the customer.

EC and Media Convergence

Convergence is the melding of electronics, television, publishing, telecommunications, and computers for the purpose of facilitating new forms of information base commerce Multimedia convergence applies to the conversion of text, voice, data, image, graphics, and full-motion video into digital content Cross media convergence: Integration of various industries- entertainment, publication, and communication media based on multimedia content

Driving technological factors for convergence

Convergence of content Convergence of transmission Convergence of information access devices

 Convergence of content
Translates all types of information content- books, business documents, videos, movies, music- into digital information. Once converted into digital form, that information can easily be processed, searched, stored, enhanced, converted, compressed, transmitted, so on, in ways that are conveniently matched to todays information processing systems

 Convergence of transmission
Compresses and stores digitized information so it can travel through existing phone and cable wiring or some sort of network infrastructure. Here we can see a convergence of communication equipment that provides the pipeline to transmit voice, data, image, and video- all without rewiring the neighborhood.

 Convergence of information access devices

Ubiquitous telephone, with internal fax machines, modems, video monitors, computers, that are capable of receiving e-mail, video, or any content.

Market factors for convergence

Availability of low-cost, high-performance media
The widespread availability of increasingly low-cost, highperformance enabling component technologies, including storage, display devices, communication systems and operating systems among others.

Entrepreneurship
Entrepreneurs who are feeding on anticipated end-user demand for new applications- both products and servicesthat may rely on the aforementioned enabling technologies.

Regulatory actions enforcing end of monopoly

Aggressive regulatory competition in monopoly actions that are introducing

E-commerce Consumer Applications

In the long run, the e-commerce application winners will be those that can change the way consumers think and the way they do business. The most successful marketplaces are expected to be those that cater to consumers loneliness, boredom, education, and career. Evaluating the consumer preference is the main uncertainty facing application designers. What mix of voice, data video, information, geographic coverage, mobility and interactivity will consumers demand?, How much time and money they will be willing to spend to use these networks?, Etc The answers to these questions lie in consumer research. More Detail: Read page no. 22-30 of text book
See Pages 253-260 as well

E-commerce Organization Applications

Just as consumer appeal is not certain, it is not clear which ecommerce applications corporations will use internally. Corporations adapt technology to save money and improve the bottom lines. Here, the major question is: How can electronic markets be utilized to further such organizational goals as better internal coordination, faster problem solving, and improved decision making? The business tradition is changing rapidly as customers and businesses seek the flexibility to change trading partners, platforms, carriers, and networks at will.

E-commerce Organization Applications

Marketing and E-commerce: Ecommerce is forcing the companies to rethink the existing ways of doing target marketing (isolating and focusing on a segment of the population), relationship marketing (building and sustaining a long-term relationship with existing and potential customers), and even event marketing (setting up a virtual booth where interested people come and visit). Interactive marketing is accomplished in e-markets via interactive multimedia catalogs that give same look and feel as a shopping channel.

E-commerce Organization Applications

Supply Chain Management: SCM also called extending, which means integrating the internal and external partners on the supply ad process chains to get raw materials to the manufacturer and finished products to the consumer. Here, the idea is to implement these strategies using a common network infrastructure such as the information superhighway as the enabling technology. SCM includes following functions; Supplier management: The goal is to reduce the number of suppliers and get them to become partners in business in win/win relationship. The benefits are seen to reduce purchase order processing costs, increased numbers of purchase orders processed by fewer employees and reduced order processing cycle times.

E-commerce Organization Applications

Inventory management: The goal is to shorten the order-shipbill cycle. When majority of partners are electronically linked, information faxed or mailed in the past can now be sent instantly. Documents can be tracked to ensure they were received, thus improving auditing capabilities. Distribution management: The goal is to move documents related to shipping (purchase orders, claims, ship notices). Paper work that typically took several days to cycle in past can no be sent in moments with more accuracy, thus allowing improved resource planning. Channel management: The goal is to quickly disseminate information about changing operational conditions to trading partners. In other words, technical, product, and pricing information can now be posted to bulletin boards, thus allowing instant access.

E-commerce Organization Applications

Payment management: The goal is to link the company and the suppliers and distributers so that payments can be sent and received electronically. Financial management: The goal is to enable global companies to manage their money in various foreign exchange accounts. Companies must works with financial institutions to boost their ability to deal on a global basis. Sales Force Productivity: The goal is to improve the communication and flow of information among the sales, customer, and production functions. Linking the sales force with regional and corporate offices establishes greater access to market intelligence and competitor information that can be funneled into better customer service and service quality.

E-commerce Organization Applications

In summary, the marketing and supply chain management process increasingly depend on electronic markets because of global sourcing of products and services to reduce costs, short product life cycle and increasingly flexible manufacturing systems resulting in a variety of customizable products. More Detail: Read page no. 30-40 of text book

Ecommerce Architecture
E-commerce is based on client/ server architecture
Client processes requesting service from server processes First used in 1980s, the model improves to be e-commerce usability, flexibility, interoperability and scalability.

In e-commerce the client is defined as the requestor of a service and a server is the provider of the service
Browser is the client and the customer, the computer that sends the HTML files is the server The server can also be a computer program that provides services to other computer programs

A web server is the computer program that serves requested HTML pages or files.
Uses client/server model and http(hypertext transfer protocol) Every computer on the internet that contains a web site must have a web server program.
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Client/Server Architecture
Web servers are included as part of a larger package of internet and intranet related programs for serving e-mail, downloading requests for FTP files and building and publishing web pages. Typically the e-commerce customer is the client and the business is the server. In the client/ server model single machine can be both client and the server The client/ server model utilises a database server in which RDBMS user queries can be answered directly by the server

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Client/Server Architecture
The client/ server architecture reduces network traffic by providing a query response to the user rather than transferring total files. The client/ server model improves multi-user updating through a graphical user interface (GUI) front end to the shared database. In client/ server architectures client and server typically communicate through statements made in structured query language (SQL).

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Two-Tier Architectures
The user system interface is usually located in the users desktop environment and the DBM services are usually in a server that is a more powerful machine that services many clients.
Client Server User Interface (Business Rules) (Business Rules) Data Access

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Two-Tier Architectures
It runs the client processes separately from the server processes, usually on a different computer:
The client processes provide an interface for the customer, and gather and present data usually on the customers computer. This part of the application is the presentation layer The server processes provide an interface with the data store of the business. This part of the application is the data layer The business logic that validates data, monitors security and permissions, and performs other business rules can be housed on either the client or the server, or split between the two.
Fundamental units of work required to complete the business process Business rules can be automated by an application program.
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Two-Tier Architectures
Typically used in e-commerce
Internet retrieval, desicion support

Used in distributed computing when there are fewer than 100 people simultaneously interacting on a LAN. Implementation of processing management services using vendor proprietary db procedures restricts flexibility and choice of RDBMS for applications.
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Three-Tier Architectures
Also called as multi-tier architecture A middle tier is added between the client environment and the DBM server environment Variety of ways to implement: Transaction processing (TP) monitors Message servers Application servers
Web client Web server Database server

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A Simple E-commerce Web Database Construction Model

Web Browser Client Desktop

HTTP URL HTML formatted

Data (e.g. HTML table)

Web Server Software

HTML

Web Server Helper

Middleware

Database Front-end Back-end

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Developing Ecommerce System

Development of Ecommerce system includes establishing the proper client/server system so as to fulfill the specific need. Developing the system includes creating the client side and server side modules. Client side modules will provide the look and feel that user can interact with the system like frontends. The server side modules consists creating backend like databases and connectivity with them. Generally, developing the ecommerce system itself comprises web development and web design issues. 54