E-Commerce

Areas

• Definitions

• Needs

• Technical Infrastructure

• History

• Benefits

• Limitations

• Security

Definitions

• New way of conducting business – electronically using networks and the Internet

• Networked communications is the infrastructure• Kalakota and Whinston (1997) define EC from

these perspectives:– Communications perspective– Business process perspective– Service Perspective– Online perspective

Definitions

• Communications perspective– Delivery of information/products/services over

telephone lines, computer networks or any other electronic means

• Business process perspective– Application of technology toward the automation

of business transactions and work flow

Definitions

• Service Perspective– Tool that addresses the desire of firms, consumers, and

management to cut service costs

– While improving the quality of goods and increasing the speed of delivery

• Online perspective– Provides the capability of buying and selling products

and information

– On the internet and other online services

Definitions

• Turban (2002) adds

• Collaborations Perspective– The framework for inter and and

intraorganisational collaboration

• Community Perspective– Provides a gathering place for community

members to learn, transact, and collaborate

E Commerce

• IT has become the major facilitator of business• Networked Computing - Business transactions

take place via telecommunication networks– Business-to-customer (B2C)

– Business-to-business (B2B)

– Consumer-to-business (C2B)

• Most popular platforms– Internet/Intranet/extranet

Internet, Intranet and Extranet

• Internet– Public and global communication network that

provides connectivity to anyone over a LAN or ISP

– Public network that is connected and routed over gateways

– Most common platform for B2C EC

– Lack of control that may result in an unruly proliferation of information

– Need effective and efficient search engines to navigate

Intranet• Intranet

– Corporate LAN or WAN– Uses internet technologies (TCP/IP)– Secured behind firewall (access control server)– Links various servers, clients, databases and application programs– Most common platform for corporate internal management– Used to enhance the communication and collaboration among

authorised• Employees• Customers• Suppliers• Business partners

Extranet• Extranet (extended intranet)

– Links intranets in different locations– Link using the internet– Improvement of security of connection portions of the internet

required– Done using cryptology and authorisation algorithms (tunneling

technology)– The internet with tunneling technology is known as virtual private

network (VPN)– Most common platform for B2B EC– Provide connectivity between an organisation and business partners,

materials suppliers, financial services, government and customers– Allows companies to collaborate, share and exchange information

Needs for E Commerce

• Supporting information• Organisational infrastructure

– People– Policy– Technical standards and protocols– Network infrastructure– Interfacing infrastructure

• Systems• Applications

Systems

• Electronic data interchange (EDI)

• Extranets

• Electronic Funds transfer (EFT)

• Electronic Payment Systems

• Electronic forms

• Integrating messaging

• Shared Databases

Applications

• More than just a website– Home banking– Online shopping– Buying stocks– Finding a job– Conducting an auction– Collaborating electronically

History

• Early 1970s– Limited to large corporations

• 1990’s– Rapid growth of internet– Dependibility of networks– Development of protocols/software/specifications– Rapid expansion in EC – telecommunication applications

• Late 1990’s– Innovative applications– Advertisement to auctions to virtual reality experiences– Dramatic increase in business web presence

Benefits to Organisations

• Expands the marketplace

• Decrease cost of distributing information

• Can provide competitive advantage

• Initiates business process reengineering

• Improved image, customer service.

Benefits to Consumers

• Shop/other transactions 24 hours a day form any location

• Provides more choice• Frequently provides less expensive products• Receive information in seconds• Participate in virtual auctions• Interact with other communities in electronic

communities• Facilitates competition, which results in substantial

discounts

Benefits to Society

• Enables individuals to work from home– Less traffic, lower air pollution

• Less affluent people can buy more and increase their standard of living

• Enables Third World countries/rural areas to enjoy products and services (college degrees)

• Anything else?

Limitations - Technical

• Lack of system security, reliability, standards• Insufficient telecommunication bandwidth• Software development tools evolving and

changing rapidly• Difficult to integrate internet and EC software

with some existing applications and databases• Some EC software might not fit with some

hardware, or may be incompatible with some operating systems

Limitations - nontechnical

• Cost and Justification• Lack of trust and user resistance• Other Limiting factors

– Legal issues– Evolving– Profitibility– Human relationships– Expensive.

Internet Security

• Often sites as the major barrier to EC• National Computer Security Association (NCSA) has

identified 4 cornerstones of secure EC

• Authenticity– is the sender who they claim to be– TCP/IP uses password -Passwords can be intercepted– IP addresses can also be screened to prevent unauthorised

access– IP Spoofing – hacker can send a message that appears to

come from a particular domain

Internet Security• Privacy

– Breaches of privacy can occur both during and after transmission– Transaction log– Cookies

• Integrity– Have the contents of a message been mofified during transmission– Data packets are susceptible to capture and modification while en

route– Example: a hacker might modify the address where the contents

of a web form will be submitted. The user might fill in a credit card number on a form, click Submit and unknowingly transmit the information to the hackers server.

Internet Security

• Nonrepudiation– Can the sender of a message deny that they actually sent a

message?– The key here is a “signature” that makes it difficult to dispute

• In short, securing an EC site requires that the cornerstones be secured– Privicy of data and messages must be protected– Identities must be verified and verifiable– Unauthorised access must be controlled

• Ensuring security of an EC site is extremely complex task