fd1d64ad-9894-4025-96ce-eba773e51571 , eb unit-1 part-1

7/26/2019 fd1d64ad-9894-4025-96ce-eba773e51571 , eb unit-1 part-1

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Introduction to Electronic

Business and Electronic

Commerce


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History of E-Commerce

In 1990s electronic messaging

technologies became an integral part of

workflow or collaborative computing

systems( also called groupware)

Lotus notes is a prominent example of

such systems


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History of E-Commerce

In 1990s, the advent of the world wide web

on the internet represents a turning point

in electronic commerce by providing a

technology solution to the problem of

publishing.

the web made electronic commerce a

cheaper way of doing business andenabled more diverse business activities.


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Technology and commerce

In order to understand how technology can aid

commerce we need to understand traditional

commerce.

Once we have identified what activities areinvolved in traditional commerce, we can

consider how technology can improve them.

Note that technology does not always improve

commerce. Knowing when technology will NOT

help is also useful.


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Origins of commerce

The origins of traditional commerce predaterecorded history.

Commerce is based on the specialization of

skills. Instead of performing all services andproducing all goods independently, people relyon each other for the goods and services theyneed.

Example: My friend trades eggs to one of herneighbors in exchange for repairs to the fenceson her ranch.


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Traditional commerce

Although money has replaced bartering,the basic mechanics of commerce remainthe same: one member of society createssomething of value that another member

of society desires. Commerceis a negotiated exchange of

valuable objects or services between at

least two parties and includes all activitiesthat each of the parties undertakes tocomplete the transaction.


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Views of commerce

Commerce can be viewed from at least

two different perspectives:

The buyers viewpoint

The sellers viewpoint

Both perspectives will illustrate that

commerce involves a number of distinct

activities, called business processes.


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The buyers perspective

From the buyers perspective, commerceinvolves the following activities:

Identify a specific need

Search for products or services that will satisfy

the specific need Select a vendor

Negotiate a purchase transaction includingdelivery logistics, inspection, testing, andacceptance

Make payment

Perform/obtain maintenance if necessary


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The sellers perspective

From the sellers perspective, commerceinvolves the following activities:

Conduct market research to identify customerneeds

Create a product or service to meet thoseneeds

Advertise and promote the product or service

Negotiate a sales transaction including deliverylogistics, inspection, testing, and acceptance

Ship goods and invoice the customer

Receive and process customer payments

Provide after sales support and maintenance


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Business processes

Business processes are the activitiesinvolved in conducting commerce.

Examples include: Transferring funds

Placing orders

Sending invoices Shipping goods to customers


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E-Commerce

We will define e-commerceas the use ofelectronic data transmission to implement or

enhance any business activity.

Example: A buyer sends an electronic purchase

order to a seller. The seller then sends an

electronic invoice back to the buyer.

When used appropriately, electronic

transmission can save both time and money.


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E-Commerce Definition

The transformation of key business processes

through the use of internet technologies- IBM

E-commerce is buying and selling activities overdigital mediaR Kalakota (1999)

E-commerce is about doing businesselectronically- European commission (1997)


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Myths you should know

There is still a confusion on what e-commerce can or cannot do. Following arethe myths to be addressed:

Sett ing up a websi te is easy:True, except it

is not easy to ensure performance. There aretechnology, networking infrastructure, anddesign criteria to be considered.

E-Commerce means no more massmarket ing: The web is first commercialchannel that enables cost effective one-to-onemarketing on a large scale, but a businessmust still market its web presence.


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E-Commerce means a new economy: Thereis no new economy but there is something

new in the real economy.

E-Commerce is revo lut ionary: Internet

technology has created a new way to shop,most rules of retailing still apply. Unfortunately

many Internet retailers (i-tailers) spend

disproportionate amount on the revolutionary

tasks of Web site construction and marketing

and to little on customer support and

fulfilment.


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Al l products can be so ld on l ine us ing

ident ical business model : Different products

require different selling techniques and

customer support. Therefore differentbusiness models depending on product.


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Bu i ld i t and they wi l l come: websites have

to be promoted just like any other business.

The midd leman is out : Intermediaries of the

traditional organization delivers product to theretailer from the manufacturer or the

wholesaler.


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Impact of e-commerce

E-commerce is changing the way

traditional commerce is conducted:

Technology can help throughout the

process including promotion, searching,

selecting, negotiating, delivery, and

support.

The value chain is being reconfigured.


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Appropriateness

It is important to identify which businessprocesses can be streamlined using e-commercetechnologies.

It is equally important to realize that someprocesses make effective use of traditionalcommerce and cant be improved upon using

technology.

Technology is not a panacea. Using it when it isnot necessary or helpful can be a costly mistake.


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Well-suited for e-commerce

Business processes that are well-suited forelectronic commerce: Sale/purchase of new books and CDs

Online delivery of software

Advertising and promotion of travel services

Online tracking of shipments

The business processes that are especially well-

suited to e-commerce include commodity items,that is, a product or service that has becomestandardized.


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Best for traditional commerce

Business processes that are well-suited to

traditional commerce:

Sale/purchase of high fashion clothing

Sale/purchase of perishable food products Sale of expensive jewelry and antiques

In general, products that buyers prefer to touch,

smell, or otherwise closely examine are difficult

to sell using e-commerce.


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Questionable cases

Would e-commerce or traditional commerce

work best for the following activities?

Sale/purchase of rare books Browsing through new books

Sale/purchase of shoes

Sale/purchase of collectibles (trading cards, plates,

etc.)


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Combinations of both

Some business processes can be handled wellusing a combination of electronic and traditionalmethods:

Sale/purchase of automobiles

Online banking Sale/purchase of investment/insurance products

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