E-Commerce 1 E-commerce Describe

E-Commerce 1

E-commerce • • • Describe E-Commerce Identify benefits and risks of E-Commerce Describe E-Commerce business models Describe E-Commerce Security and Encryption Describe EDI (Electronic Data Interchange) Describe trends and projections for E-Commerce Describe issues related to E-Commerce Describe order and payment processing Describe E-Commerce solution options 2

What is E-Commerce? n n The integration of communications, data management, and security technologies to allow individuals and organizations to exchange information related to the sale of goods and services. Major functions of E-Commerce include: • the buying of goods, • the selling of goods, and • performance of financial transactions on the Internet. 3

E-Commerce Issues n n n Intellectual Property Security Fraud Taxation International Commerce 4

e-Business solutions Customers ERP, CRM, Database Internet / WWW Mobile Users Web EDI Intranet Internal Users Suppliers, public 5

E-Commerce Advantages for Businesses n n Reduced Costs Increased Customer Satisfaction More Effective Data Management Potentially Higher Sales 6

E-Commerce Advantages for Consumers n n n Convenience Easier Comparison Shopping Wider Selection of Goods 7

E-Commerce Risks for Businesses n n Need for a robust, reliable web site Fraudulent transactions Customer reluctance to purchase online Increased competition 8

E-Commerce Risks for Consumers n n Possible Security Issues Possible Privacy Issues Purchasing from photos & descriptions Possible difficulty with returns 9

The importance 10

E-Commerce Business Models n n B 2 C – Business-to-Consumer B 2 B – Business-to-Business C 2 C – Consumer-to-Consumer B 2 G – Business-to-Government 11

Electronic Data Interchange (EDI) n n n EDI is the transfer of data between different companies using networks. This facilitates the exchange of standard business documents including purchase orders and invoices. EDI is not new; it has been in existence since the 1960 s. Organizations that exchange EDI transmissions are called trading partners. Newer technologies such as XML and Web Services are replacing traditional EDI by allowing trading partners virtually unlimited opportunities to customize their information exchange over the Internet. 12

Questions 1. 2. Describe three advantages of ecommerce for an entrepreneur just starting a business. Describe three risks that businesses face when engaging in e-commerce. 13

Order & Payment Processing n E-Commerce Payment Models: • Cash • Check • Credit • Smart Card • Micropayments 14

Credit Card Order Processing Flow

E-Commerce Storefront Solutions n Instant Online Storefront • Yahoo!, Bigstep, Earthstores, Free. Merchant n Off-The-Shelf Shopping Cart Software • Miva Merchant, Mercantec n Custom Built Solution • IBM's Web. Sphere Commerce Suite, Microsoft's Commerce Server • Visual Studio. NET, Macromedia Dreamweaver MX, IBM’s Web. Sphere Commerce Studio n Semi-Custom Built Solutions on a Budget n n n E-Commerce add-ons for Front. Page and Dreamweaver Paypal order processing Free shopping cart scripts 16

Questions 1. 2. List three payment models commonly used on the Web. Which one is the most popular, why? Have you purchased online? If so, think of the last item that you purchased. 1. Why did you purchase it online instead of at a store? 2. Did you check to see if the transaction was secure? Why or why not? 3. How will your shopping habits be different in the future? 3. Describe three types of e-commerce solutions available. Which provides the easiest entry to e-commerce? Explain. 17

Application Service Provider n What is ASP? • • • Application Service Provider (not the ASP from microsoft) A company offers individuals or enterprises to host their applications or services on this ASP company. (low budgets for small companies, outsourcing for large companies) 18

Hosting Solutions n Mid-High Volume: Amazon n Other: • Servelink. com, Cyber. Sharks. net, Hostek. com, Liquid. Web. com, Tikios. com(windows-based) 19

Terminology n n n Dedicated line – A point-to-point, hard wire connection between two service locations. Leased line – A telecommunications line dedicated to a particular customer along predetermined routers. Outsourcing – The transfer of components or large segments of an internal IT infrastructure, staff, processes or applications to an external resource such as Application service provider (ASP). 20

Example e-Business n n n n Storefront model Auction model Portal Model Dynamic Pricing Models B 2 B Exchanges B 2 B Service Providers e-Learning 21

Storefront Model n n The storefront model combines transaction processing, security, online payment which allows merchants to sell their products to the customers on the Web. Many famous storefront model companies are Business-to-Consumer (B 2 C) companies. • www. amazon. com • www. ticketmaster. com n Sell tickets 22

Storefront Model n n Allow companies to conduct business 24 by-7 (all-day, everyday). One of the most commonly used model is “shopping cart” • An order-processing technology that allows user to accumulate the shopping list and continue shopping. • Supported by product catalog, merchant server and database technology. • www. gap. com • www. icare. com. hk (international) 23

Shopping Example Shopping cart Go shopping 24

Shopping Carts n Templates for shopping carts in dreamweaver at ecommercetemplates. com (you host solution) n n n Many other providers (http: //www. fortune 3. com) Managed Solutions Make your own 25

Shopping Cart SW n Sometimes will also include Product pages –that are created from statically entered in product information (not stored in databases) 26

Comparisons of Shopping Cart SW n n Search online to see what is popular Check out wiki page (http: //en. wikipedia. org/wiki/Comparison_of_shopping_cart_software) 27

Free Shopping Cart SW n Do a search Check out www. free-carts. com n PHP: http: //www. opencart. com/ n • This does cart + product pages • Install on a Web Server • As part of install of SW must specify a My. SQL database and give the admin name and a password to it. • Finish install of Open. Cart SW – will include creation the database tables to support Open. Cart • Using Interface of opencart: Setup categories of products, product info with images, etc. n Java: http: //www. jadasite. com/ 28

Shopping Cart Payment Processing Services n n n Google Checkout Pay. Pall Amazonpayments Others: (search yourself)- 2 checkout. com, authorize. net, itransact, cyberbit, and more Direct Credit Card 29

Storefront Model n n Another model is “online shopping mall” which provides a wide selection of products and services. Customers can purchase items from many stores in a single transaction. • Offer speed and add convenience • www. mall. com • www. shopnow. com • www. e-buy. com. hk 30

Shopping Mall Example Different shops 31

Auction Model n n n Internet User can login to the online auction sites, either bidder or seller. Sellers post their items and wait for the buyers to bid. Auction sites get commission on every successful auction. • • • n E. g. most profitable: www. ebay. com International: auction. timway. com http: //auctions. yahoo. com/ Reverse Auction model • Allow buyer to set the price, www. epurchasingagent. com 32

http: //ebay. com/ Auction Model Example 33

Portal Model n Allow visitors to find everything within the website. • Horizontal Portal Wide-ranged of topics n E. g. www. yahoo. com n • Vertical Portal Offer specific information on a single area of interest. n E. g. www. webmd. com (medical information) n 34

Dynamic Pricing Model n Name-your-price Business Model • Customers choose their price for the products or services (www. priceline. com). n Comparison Pricing Model • Customers poll some merchants and find the lowest prices (www. bottomdollar. com) n Demand-Sensitive Pricing Model • Enables customers to get better services and prices. (www. mobshop. com) n Bartering Model • Exchange items (www. ubarter. com) 35

Pricing model example 36

Group Pricing Model n Customers get group pricing if enough purchase the offer (www. groupon. com). 37

B 2 B Exchanges n n n Define as buying, selling, partnering, bartering or trading conducted between two or more business (B 2 B). Allow Business to buy, sell, auction, barter and distribute products and services. Examples: • • www. ework. com (Exchange employee) www. itoi. com (Industry to Industry) www. biz 2 biz. com (Business to Business) www. icgcommerce. com, www. tradeaccess. com 38

B 2 B examples 39

B 2 B Service Providers n n n B 2 B service providers make the B 2 B transactions easier. These e-Businesses help other businesses improve their policies, procedures, services and general operations. Solutions include supply chain management, logistics, procurement. www. ariba. com www. freemarkets. com www. liveperson. com 40

Chat online? n Why? To solve your E-business problem via the Internet. 41

Loan Online n n A growing segment of E-commerce. Loan online at a lower rate than other traditional channels. E-loan – www. eloan. com E-credit – www. ecredit. com • Clients – HP, Intel, other businesses n Loan direct – www. loansdirect. com 42

Recruitment on the Web n n n Effectively job searching on the Web. Improve the recruitment for both employer and seeker. Search International Jobs (www. monster. com) Focus on computer industry (www. dice. com) www. guru. com www. jobdb. com 43

Online News Services n n n Web is playing an important role in the publishing and news industries. The Wall Street Journal (www. wsj. com) Articles by leading investment analysts (www. barrons. com) Latest sports news (www. espn. com) Comprehensive news site (www. drudgereport. com) 44

Recruitment / News 45

Online Travel Services n n n Customers can bypass the travel agents. Allow discount and low fare rate online. air-tickets, hostel, and car-rentals. “Last minutes” tickets offer low price. www. cheaptickets. com, www. kayak. com, orbitz. com, expedia. com, …. www. travelocity. com 46

Online Entertainment n n Multimedia rich websites provide Audio and Video, popular music and videos are available online for free. Internet Movie Database • www. imdb. com n www. icast. com, netflix. com, blockbuster. com, … 47

e-Learning n n n n e-Learning is growing rapidly as the number of Internet users increases. Universities and other training companies offer HQ distance education over the Web. www. click 2 learn. com www. saba. com www. online. uillinois. edu wwwtools. cityu. edu. hk www. polyu. edu. hk/elearning E-books – www. xlibris. com 48

M-Commerce n n n What is Mobile Commerce? Mobile commerce is the term applied to online financial transactions shopping or the electronic transfer of funds - using a mobile device. Mobile commerce transactions are being enhanced by developments in the world of mobile communication. 49

Master. Card & M-Commerce 50

Build an e-Commerce site n Register a Domain name • Search for domain names (Inter. NIC) • What is the criteria of selecting a good name? n Find a Web Host • Select the suitable ISP n Web Developers • • • Hire a web designer Cut cost and work with the designer If your site is easy to use, the customers will stay longer and come more frequent. 51

Web Hosting n It is a very important step in e. Commerce. • Good uptime? • Good technical support? • Fast connection to the Net? • Staffs are knowledgeable about e. Commerce? • Compatibility with other e-Commerce providers? 52

Attract and keep customers n e-Business Advertising • Banner Advertising n Recently, losing their effectiveness • Buying and Selling advertising You can become a host, or an advertiser n www. valueclick. com n • Webcasting and Interactive Advertising n Use streaming media to broadcast information on the web. 53

Enterprise Resources Planning (ERP) n An industrial term defines as the activities supported by application software that helps company to manage the important parts of the business. • Product planning, parts purchasing, maintaining inventories, contacting suppliers, customer servicing. n Integrated with database (such as Oracle) to provide other features, business process analysis, employee training, … 54

ERP example I have questions about billing, product availability, shipping and customer service. Finance: How can I help you Fulfillment: Yes, Sir? Inventory: Which item? Customer Service: We’re ready to hel 55

Customer Relationship Management (CRM) n n All the customer services provided by the company form the CRM includes • Call handling (in/out calls from customers and service representatives)…Nuance • Sales tracking (tracing and recording the sales made) • Transaction support (the technology used for transactions) • Improve customer satisfaction and maximize the profits 56

Electronic Data Interchange (EDI) n n Standard format to exchange business data. EDI message is a string of data that represents “price”, “product number”, “product name”, etc. EDI message can be encrypted. EDI is one form of E-commerce, also include email, fax. 57

n http: //www. disa. org / Electronic Data Interchange (EDI) 58

Get Paid n How to you pay on the website? • Credit card transactions • Cybercash: www. cybercash. com • Pay. Pal: www. paypal. com • Google Checkout • E-Wallets allows you to keep track your transactions, www. visa. com/pd/ewallet/main. html • Digital Cash: store your money electrically n www. ecash. com 59

Manage the E-commerce business n n n Have a good communication between the business production line (including the customer services team), and the IT development line. “Online transaction history log” and “Historical investment performance reports” also helps to decide and plan for the product and service trend. Migration of the traditional trading client to the new e-business. 60

Secure the site n n Customers fear for their online privacy. Make sure all transactions on your ecommerce site are protected. Security is provided by different kind of cryptography (encryption, digital signatures, digital certificates) Sometimes, you may provide your personal information for: member-only discounts, giveaway, sweepstakes, coupons. Beware! 61

Online shopping risks n A list of safeguards to keep in mind. • Shop with trusted merchants. • Read the site’s delivery, return, and privacy policies. • Only enter your details with the URL that begins with https: // and either a locked padlock or an unbroken key icon. • Be careful not to hit the ORDER NOW button more than once. • Never send credit card information via e-mail. • Keep a record of your transactions until shipped. 62

Application Service Provider n What is an Application Service Provider? • Deliver and manage applications or computer services via the Internet. • Provide a cost-effective solution from an outside supplier. (maintenance, upgrades and customization) • It can be a commercial entity, a not-forprofit organization or government related. 63

ASP other names n n n On-demand software or software as a service (Saa. S). TYPES: A specialist or functional ASP delivers a single application, such as credit card payment processing or timesheet services; A vertical market ASP makes software for a particular (vertical) market –i. e. medical transcriptions/records; An enterprise ASP delivers wide set of solutions; A local ASP delivers small business services within a limited area. 64

Using ASP Benefits n Speed to market • ASP has the latest equipment, applications, ready to provide market access. n Operational freedom • The customer can focus on their core business. n Improved performance • ASP provides vast experience on different issues. n Financial flexibility • Reduced fixed cost and overall expenditures. n Reduced risk • Customers can test a new technology with minimal impact to their existing system. 65

ASP Advantages 66

What kind of application can be delivered? n Citrix, Graph. On and SCO • The applications run on a central server managed by the ASP, but not the applications on the end-user desktop or company’s server. • Portal means a gateway (starting point), for a WWW site, it is the starting site for user to browse. 67

Portal Software

Choosing ASP Shared Server with Application Isolation Systems Server Farm (Each company with its own server) Customer Cost Low High Initial Customer Investment Low High Maintainance cost Low Moderate Server Architecture Compl ex Moderate Simple Security Risk High Low Moderate 69

Summary n n e-Commerce is defined as a company has an online presence. We have discussed different types of e-Commerce models. Discuss the important issues on developing e-Business. ASP provides very good supports to the e-Commerce development. 70

References n n www. ecommercetimes. com www. ecommerce-guide. com 71