E-Commerce Notes

E-Commerce

Introduction to E-Commerce

• E-Commerce vs E-Business
• Advantages and Limitations
• E-Commerce Framework
• Impact of E-Commerce
• Role of E-Business and their challenges

Foundations of Electronic Commerce

Definitions and Content of Field

• Electronic Commerce (EC) involves business transactions via telecommunications networks, especially the Internet.
• EC describes buying and selling products, services, and information via computer networks, including the Internet.
• The infrastructure for EC is a networked computing environment in business, home, and government.
• E-Business is a broad definition of EC, including customer service and intrabusiness tasks, frequently used interchangeably with EC.
• A global networked environment is known as the Internet.
• A counterpart within organizations is called an intranet.
• An extranet extends intranets so that they can be accessed by business partners.

Pure Vs. Partial Electronic Commerce

• Three dimensions:
  • Product (service) sold [physical / digital]
  • The process [physical / digital]
  • The delivery agent (or intermediary) [physical / digital]
• Traditional commerce: all dimensions are physical.
• Pure EC: all dimensions are digital.
• Partial EC: all other possibilities include a mix of digital and physical dimensions.

The Electronic Commerce Field

• Implementation depends on four major areas: people, public policy, technical standards and protocols, and other organizations.
• EC management coordinates applications, infrastructures, and pillars, including Internet marketing and advertisement.

E-Commerce vs E-Business

Electronic Markets

• A market is a network of interactions and relationships where information, products, services, and payments are exchanged.
• The market handles all necessary transactions.
• An electronic market is a place where shoppers and sellers meet electronically.
• In electronic markets, sellers and buyers negotiate, submit bids, agree on an order, and finish the execution on- or off-line.

Interorganization Information Systems

• An interorganizational information system (IOS) involves information flow among two or more organizations.
• Its major objective is efficient routine transaction processing, such as transmitting orders, bills, and payments using EDI or extranets.
• Scope: An IOS is a unified system encompassing two or several business partners.
• A typical IOS includes a company and its suppliers and/or customers.

Electronic Commerce is Interdisciplinary

• Marketing
• Computer sciences
• Consumer behavior and psychology
• Finance
• Economic
• Production/Logistic
• Management information systems
• Accounting and auditing
• Management
• Business law and ethics

The Benefits of Electronic Commerce

Benefits to Organizations

• Expands the marketplace to national and international markets
• Decreases 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 advantage to its implementers

Benefits to Customers

• 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.

Benefits to Society

• Enables more individuals 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
• Facilitates delivery of public services at a reduced cost, increases effectiveness, and/or improves quality

The Limitations of Electronic Commerce

Technical Limitations

• Lack of sufficient system’s security, reliability, standards, and communication protocols
• Insufficient telecommunication bandwidth
• The software development tools are still evolving and changing rapidly
• Difficulties in integrating the Internet and electronic commerce software with some existing applications and databases
• The need for special Web servers and other infrastructures, in addition to the network servers (additional cost)
• Possible problems of interoperability, meaning that some EC software does not fit with some hardware, or is incompatible with some operating systems or other components

Non-Technical Limitations

• Lack of touch and feel online
• Many unresolved legal issues
• Rapidly evolving and changing EC
• Lack of support services
• Insufficiently large enough number of sellers and buyers
• Breakdown of human relationships
• Expensive and/or inconvenient accessibility to the Internet

Everything Will Be Changed

• Improving Direct Marketing
• Product promotion
• New sales channels
• Direct savings
• Time-to-market (reduced cycle time)
• Customer service
• Brand or corporate image

Transforming Organizations

• Work will change
• Technology learning
• Organizational learning
• Redefining Organization
• New product capabilities
• New business models

Other Changes in the Workplace

E-Commerce Framework

• The software used for developing or building an eCommerce website.
• Provide an overall structure for e-commerce related applications.

Features

• Quality search
• CMS (Content Mgt System)
• Multi Channel Functionality
• Mobile supported
• Third Party system & plug-in
• Business Intelligence

Types of Ecommerce Frameworks

• Open Source
• Headless
• SAAS

Open-Source eCommerce Framework

• Allow users to access and modify the source code of their own software instance.
• Provides a high level of customization options.
• No cost involved.

Pros

• Limitless customization
• Active community for designers and developers

Cons

• You are solely responsible for the software and security patch update installations.
• Reliability on developers for customization.
• Hidden costs involved.
• Softwares are usually complex.

SaaS eCommerce Framework

• Software as a Service
• User prefers to subscribe to the software that is hosted, managed, and improved by the vendor.
• Includes technical support.
• Reducing the need of hiring an in-house team of designers and developers.

Pros

• TCO (total cost of ownership) is less
• Quick access to marketplaces

Cons

• Limited access to customization features and options

Headless eCommerce Framework

• Decouples front and back ends
• Retailers can choose their own presentation layer.
• Gives the opportunity to take a multi-vendor approach

Pros

• Flexibility to choose front-end from DXP (digital experience platforms) to PWAs, etc.
• Allows undergoing development without impacting the front-end

Cons

• TCO is expectedly higher than SaaS and Open-source frameworks.
• Need developer expertise due to complex architecture

To determine the best eCommerce framework

• One must be clear on:
• eCommerce Business Model
• Website Requirements

Impact of E-Commerce

• Stimulates the economy by increasing productivity
• Encouraging innovation
• Can significantly boost the country’s economy
• ex; a 1% productivity increase in Asia’s services sector would lead to $12$ billion in welfare gains, $0.4$% GDP growth, a $0.4$% increase in wages, and $12$ billion in growth
• Facilitates access to foreign markets, promotes economic growth, and improves exports and production
• Has more market share and fewer barriers to entry
• Encourages entrepreneurship and competition among businesses of all sizes.

Role of E-Business and their challenges

• Securing e-business services against increasingly sophisticated cyberthreats;
• Scaling services fast enough to meet demand without jeopardizing performance;
• Evolving technologies fast enough to keep pace with changing market dynamics;
• Finding and training skilled workers to keep pace with advanced technologies; and
• Keeping pace with e-business capabilities that, by their electronic nature, are always on.