notes on e-commerce

7/29/2019 notes on e-commerce

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Architectural Framework forElectronic Commerce

1) Application services

2) Brokerage and Data services, Data or transactionmanagement

3) Interface and Support Layers4) Secure Messaging, Security, and Electronic Document

Interchange

5) Middleware and Structured document interchange

6) Network infrastructure and basic communicationsservices


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6)Network Infrastructure

E-commerce framework is being built on the WWWarchitecture.

Wireline - coaxial, fiber optic

Wireless


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5) Middleware Services

needed to solve all the interface, translation,transformation, and interpretation problems

the ultimate mediator between diverse softwareprograms that enables them talk to one another

As computing is shifting from application centric to datacentric, middleware services should focus on: transparency

transaction security and management - authentication andauthorization

distributed object management and services. Objects aredefined as the combination of data and instructions acting on thedata.


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4) Secure Messaging, Security, andElectronic Document Interchange

Messaging can be defined as: the software that sits between the network infrastructure and

the clients or e-commerce applications.

a framework for the total implementation of portableapplications

They offer solutions for communicating nonformatted(unstructured) data, letters, memos, reports, as well

as formatted (structured) data such as invoices, PO.With messaging tools, people can communicate andwork together more effectively, no matter where theyare located.


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3) Interface and Support Services

Interfaces for e-commerce applications such asinteractive catalogs, the customized interface toconsumer applications such as home shopping.

Support directory services, functions necessary for

information search and access, which operate behindthe scenes and attempt to organize the enormousamount of information and transactions generated tofacilitate e-commerce.

The difference - interactive catalogs deal with people,directory support services interact directly with softwareapplication.


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2) Information Brokerage andManagement

It provides service integration through the notion ofinformation brokerage, the development of which isnecessitated by the increasing information resourcefragmentation.Information brokerage is intermediary who providesservice integration between customers andinformation providers, given some constraint such as

a low price, fast service, or profit maximization for aclient

It also addresses the issue of adding value to theinformation that is retrieved. E.g. FX companyprovides not only the latest currency exchange rate,

but also hedging and risk management etc.


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(1) E-Commerce Applicationservices:

Distinct Categories of e-CommerceBusiness to Consumer(B2C)

Business to business(B2B)Consumer to Consumer(C2C)

Consumer to Business (C2B)

Intraorganizational e-commerce


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Four Categories of e-Commerce

B2BB2B C2BC2B

B2CB2C C2CC2C

Business Consumers

Business originating from . . .

Business

Consumers

And sellingto . . .


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Convergence of e-Commerce Categories

Publishers order paper

supplies from papercompanies

Amazon orders from

publishers

Publishers order paper

supplies from paper

companies

Amazon orders from

publishers

Consumers aggregate

to bulk purchase from

Amazon

Consumers aggregate

to bulk purchase from

Amazon

Consumers buythousands of Harry

Potter books from

Amazon

Consumers buythousands of Harry

Potter books from

Amazon

Consumers resell

copies on eBay

Consumers resell

copies on eBay

Business Consumers

Business originating from . . .

Business

Consumers

And sellingto . . .


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Procurement, distribution and logistics

Manufacturingand production

Engineeringand research

Accounting,finance and

management

Advertising Sales Customer service

Customers

Consumer-oriented

e-commerce

Global Supplier

Classic EDI

Private

Commerce

Internal

publishing

Different types of

e-commerce applications


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Business-to-consumer (b2c) Transactions

It refers to exchanges between business andconsumers, like the ones managed by Amazon.com,YahooWe call this category marketplace transaction.

The activities tracked are consumer search,frequently asked questions and service and support.Customers learn about products differently throughelectronic publishingBuy them differently using electronic cash and secure

payment systemshave them delivered differentlyloyalty may also be different


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Consumer-Oriented (b2c) E-Commerce

Consumer-oriented application can be broadlyclassified into

entertainment, such as movies on demand,

multiuser games, on-line discussions financial services, such as home banking, financialservices, financial news

information, such as on-line databases

essential services, such as home shopping,electronic catalogs, telemedicine

education and training, such as interactiveeducation, multiuser games, video conferencing,on-line databases


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Operational rule of consumer-oriented e-commerce is simple:

whenever the physical transfer of information is replacedwith digital transmission, a winner might emerge if

the cost is comparable or less

use is more convenient or faster the ability to underwrite technology investments,

along with a vision to understand the demands ofthese new media


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Product/service search and

discovery in the information space

Comparison shopping and product

selection based on various attributes

Negotiation of terms, e.g., price,

delivery times

Placement of order

Authorization of payment

Receipt of product

Customer service and support (if not

satisfied in X days, return product)

Prepurchasepreparation

Purchase

consummation

Postpurchase

interaction

Steps taken by customers in product/service purchasing

Mercantile Process Models from the Consumers Perspective


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A successful on-line shopping environments

should address these questions:How much time are buyers allocating and spending ontheir purchasing decisions with respect to variousproducts?

What factors account for the differences in consumerdecision time?

What technology can be used or designed to reducedecision time?

What is the right shopping environment that keepscustomers happy and wanting to return?


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Customer inquiry and order

planning generation

Cost estimation and pricing of

product services

Order receipt and entry

Order selection and prioritization

Order scheduling

Order fulfillment and delivery

Order billing and account/payment

management

Presales

interaction

Product/service

production and

delivery

Postsales

interaction

Order management cycle in e-commerce

Customer service and support

Mercantile Process Models from the Merchants Perspective


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Business-to-business (b2b) Transactions

We call this category market-link transaction.Also known as Interorganization e-commerce.It refers to the full spectrum of e-commerce that can occurbetween two organizations.This includes purchasing and procurement, suppliermanagement, inventory management, channel management,sales activities, payment management &service and support.Businesses, governments, and other organizations depend oncomputer-to-computer communication as a fast, economical,and a dependable way to conduct business transactions.

B-to-B transactions include the use of EDI and electronic mailfor purchasing goods and services, buying information andconsulting services, submitting requests for proposals, andreceiving proposals.


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b2b and EDI

EDI developed in 1960s as a means of acceleratingthe movement of documents pertaining to shipmentsand transportation.

In mid-1980s, the technique was used in mayindustries - automotive, retail, international trade etc.

It is still growing now and is set to become thestandard by which organizations will communicate

formally with each other in e-commerceMight be replaced by XML in the future


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Some Definition of Electronic DataInterchange (EDI)

the transmission, in a standard syntax, of unambiguousinformation of business or strategic significance betweencomputers of independent organizations.

the interchange of standard formatted data between

computer application systems of trading partners withminimal manual intervention.

the electronic transfer, from computer to computer, ofcommercial and administrative data using an agreedstandard to structure an EDI message.

the electronic transfer from one computer to another ofcomputer processable data using an agreed standard tostructure the data.


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EDI in Action

EDI takes what has been a manually prepared form or aform from a business application, translates that datainto a standard electronic format, and transmit it.

At the receiving end, the standard format is

untranslated into a format that can be read by therecipients application.

Hence, output from one application becomes input toanother through the computer-to-computer exchange ofinformation.

Result is elimination of delays and errors inherent inpaper-based transaction.


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Finance

department

Sales

department

Manufacturing

department

Paper-based

mailroom

Shipping

department

Seller

Finance

department

Paper-based

mailroom

Receiving

department

Purchasing

department

Inventory and

warehousing

Purchase request

initiated in theorganization

Buyer

BillPayment

Order

delivery

Order

confirmation

Information flow without EDI

Product delivery


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Finance

department

Sales

department

Manufacturing

department

EDI-capable

computer

Shipping

department

Seller

Finance

department

EDI-capable

computer

Receiving

department

Purchasing

department

Inventory and

warehousing

Purchase request

initiated in theorganization

Buyer

Billing

detailsPayment

Automated- Order

confirmation

Information flow with EDI

Product delivery

Purchase-order

delivery


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Tangible Benefits of EDI

EDI can be a cost- and time-saving system because: automatic transfer of information from computer to computer

reduce errors

EDI produce acknowledgement of receipt of data - invoice isnot necessary, and thus save efforts and reduce cost

for companies dealing with thousands of suppliersand tens of thousands of purchase order a year, thesaving from EDI are significant. e.g. RJR Nabisco cutthe processing of purchase order from about $100 to93 cents

saving accrue from the following improvements: reduced paper-based systems

improved problem resolution and customer service

expanded customer/supplier base


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Inter-organisational electroniccommerce (b2b)

Supplier management

Electronic applications enhance businesspartnerships by reducing purchase order (PO)

processing costs and cycle times, and byincreasing the number of POs processed withfewer people.


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Inter-organisational electronic commerce (b2b)

Inventory management Electronic applications helps to reduce inventory levels,

improve inventory turns, and eliminate out-of-stock problems.

EC can shorten the order-shop-bill cycle and can also track

their documents to ensure that they were received.

Distribution management

Electronic applications facilitates the transmission ofshipping documents such as bills of lading, purchase orders,advanced ship notices, and claims and enable betterresource management by ensuring the documentsthemselves contain more accurate data.


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Inter-organisational electronic commerce (b2b)

Channel management Electronic applications can quickly disseminate information

about changing operational conditions to trading partners.Technical, product, and pricing information that once

required repeated telephone calls and countless labor hourscan now be posted to electronic bulletin board.

Payment management

Electronic applications link companies with suppliers and

distributors so that payments can be sent and receivedelectronically.

Electronic payment reduces human error, increases thespeed at which companies compute invoices, and lower

transaction costs.


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Consumer to Consumer(C2C)

exchanges involve transactions betweenand among consumers. These can includethird party involvement, as in the case of

the auction website Ebay.

Examples: other examples?


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Consumer-to-Business (c2b)

c2bis when consumers band togetherto present themselves as a buyer ingroup.

Example: www.speakout.com
http://www.speakout.com/http://www.speakout.com/


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Intraorganizational Transactions

We call this category market-driven transactions

A company becomes market driven by dispersing throughout the firm information about its

customers and competitors

spreading strategic and tactical decision making so that allunits can participate

continuously monitoring their customer commitment bymaking improved customer satisfaction an ongoing objective

Three major components of market-driventransactions are: customer orientation through product and service

customization

cross-functional coordination through enterprise integration

advertising, marketing, and customer service


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Intra-organisational electronic commerce

Workgroup communications These applications enable managers to communicate with

employees using e-mail, videoconferencing, and bulletinboards.

The purpose is to improve the internal communicationeffectiveness especially for international companies.

Electronic publishing

Electronic publishing applications enable companies to

organize publication, and disseminate human resourcesmanuals, product specifications, meeting minutes andcompany announcements.

The benefits are clear: reduction of printing cost and speed

up internal communication.


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Intra-organisational electroniccommerce

Sales Force productivity

These applications improve the informationflow between the production and sales forces.

Internal parties can get the most updatedmarket intelligence information which can beused to formulate the most effective companystrategy.


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Internal Information Systems

better utilization of corporate information in operationaland analytical decision is important

corporate data provide the building blocks to form theinformation and knowledge that underlie the operations

of all enterprises

corporate information is created, managed, and stored inmany forms and places, and its value is contingent onthe ability of workers to access, manipulate, change and

distribute it

notes on e-commerce

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