E-Commerce Summary

E-Commerce Overview

E-commerce involves business transactions through telecommunications networks, especially the Internet. It includes buying, selling, and marketing products, services, and information via computer networks. E-business encompasses a broader scope, including customer service and internal tasks, often used interchangeably with e-commerce.

Key Components

  • Internet: Global networked environment.
  • Intranet: Internal organizational network.
  • Extranet: Extends intranets to business partners.

Types of Electronic Commerce

  • Pure EC: All dimensions (product, process, delivery agent) are digital.
  • Partial EC: Mix of digital and physical dimensions.
  • Traditional commerce: All dimensions are physical.

Implementation Factors

  • People
  • Public policy
  • Technical standards and protocols
  • Organizations

E-Commerce vs. E-Business

FeatureE-CommerceE-Business
ScopeNarrow: Online buying and selling only.Broad: Includes e-commerce, internal processes, and customer interactions.
ComponentsOnline shopping, transactions.E-commerce, supply chain management, CRM, digital marketing.
PurposeFacilitates transactions.Facilitates business operations and management.
ExampleAmazon (selling goods).Amazon (includes logistics, marketing, CRM).

Electronic Markets

An electronic market is where buyers and sellers meet electronically to negotiate, bid, and agree on orders. Transactions can be completed online or offline.

Interorganizational Information Systems (IOS)

IOS involves information flow among organizations to efficiently process transactions like orders and payments using EDI or extranets. It typically includes a company and its suppliers/customers.

Interdisciplinary Nature

E-Commerce draws from:

  • Marketing
  • Computer science
  • Consumer behavior and psychology
  • Finance and economics
  • Production/Logistics
  • Information systems management
  • Accounting and auditing
  • Business law and ethics

Benefits to Organizations

  • Expands marketplace to national and international levels
  • Reduces costs for creating, processing, and distributing information
  • Allows reduced inventories through “pull” supply chain management
  • Enables customization of products and services

Benefits to Customers

  • Enables 24/7 shopping from any location
  • Provides more choices and less expensive products
  • Allows quick product delivery, especially for digitized products
  • Offers detailed information quickly
  • Facilitates participation in virtual auctions
  • Enables interaction and exchange of ideas in electronic communities

Benefits to Society

  • Enables remote work, reducing traffic and pollution
  • Offers lower prices, benefiting the poor
  • Extends availability of products/services to Third World countries and rural areas
  • Facilitates delivery of public services at reduced costs

Technical Limitations

  • Lack of sufficient security, reliability, and standards
  • Insufficient telecommunication bandwidth
  • Rapidly evolving software development tools
  • Difficulties in integrating with existing applications and databases
  • Need for special web servers and infrastructure
  • Possible interoperability problems

Non-Technical Limitations

  • Lack of “touch and feel” online
  • Unresolved legal issues
  • Rapidly evolving nature of EC
  • Lack of support services
  • Insufficient number of sellers and buyers
  • Breakdown of human relationships
  • Expensive/inconvenient internet access

Organizational Transformation

  • Improved direct marketing and product promotion
  • New sales channels and direct savings
  • Reduced time-to-market
  • Enhanced customer service
  • Improved brand or corporate image
  • Work and organizational learning
  • New product capabilities and business models

E-Commerce Framework

Software used for developing e-commerce websites, providing an overall structure for e-commerce applications

Features

  • Quality search
  • Content Management System (CMS)
  • Multi-channel functionality
  • Mobile support
  • Third-party system & plug-in integration
  • Business Intelligence

Types of Frameworks

  • Open Source
  • SaaS (Software as a Service)
  • Headless

Open-Source

Allows users to access and modify source code, providing high customization at no initial cost. However, users are responsible for security updates and may incur hidden costs.

  • Pros:
    • Limitless customization
    • Active community support
  • Cons:
    • Responsibility for software and security updates
    • Reliance on developers
    • Hidden costs
    • Complexity

SaaS

Users subscribe to vendor-hosted software, including technical support, reducing the need for an in-house team.

  • Pros:
    • Lower total cost of ownership (TCO)
    • Quick access to marketplaces
  • Cons:
    • Limited customization

Headless

Decouples front and back ends, allowing retailers to choose their presentation layer. Offers flexibility but requires developer expertise and has a higher TCO.

  • Pros:
    • Flexibility in choosing front-end (DXP, PWAs)
    • Development without front-end impact
  • Cons:
    • Higher TCO
    • Need for developer expertise

Determining the Best Framework

  • E-Commerce Business Model
  • Website Requirements

Impact of E-Commerce

E-commerce stimulates the economy by increasing productivity, encouraging innovation, and boosting economic growth. For example, a 1% productivity increase in Asia’s services sector could lead to 12 billion in welfare gains and a 0.4% GDP growth.

Role of E-Business and Challenges

  • Securing services against cyberthreats
  • Scaling services to meet demand
  • Evolving technologies to keep pace with market dynamics
  • Finding and training skilled workers
  • Keeping pace with ever-evolving capabilities